In a world powered by data, misinformation can be more detrimental than no insights at all. Alongside the many metrics intended to measure performance, guest retention is one of the most valuable for hoteliers to monitor, with statistics showing that a 5% increase in customer retention can result in profits boosting by 25% to 95%, and how a hotel strengthens its guest loyalty can be make or break for a business.
Guest retention not only measures how successful a hotel is at acquiring new guests but also how successful they are at satisfying existing guests and encouraging return visits.
Below, we dispel a few common misconceptions surrounding guest retention with facts to reveal the truth behind those myths and uncover what could be impacting your bottom line.
● A marketing strategy alone isn’t enough
Yes, a marketing strategy is powerful and effective not only to build upon your brand’s awareness but to attract new guests. However, where many hoteliers fail is their focus lies heavily on acquiring new guests but falls short when a customer retention strategy doesn’t coincide with the marketing strategy.
When it comes to marketing, it’s key to fully understand your audience and analyse what your competitors are doing. The power of data science and predictive personalisation can help you to ensure you deliver a curated brand experience at every stage of your guests’ journey, both old and new.
In an earlier blog, we discussed how you can create a personalised customer journey using technology and smart content.
● Satisfaction means loyalty
Hoteliers need to nurture relationships with their guests during and after their stay. Why? Because the cost of acquisition for an existing guest is much lower than a new booking, as well as statistics show that existing customers are 50% more like to try new products/services and spend 31% more than returning customers. But, just because a guest has stayed with you before doesn’t mean they will stay again. Past guests begin a new customer journey post visit, one that needs to be acknowledged in your strategy.
With the conversion rate of a returning customer sitting between 60-70% versus a prospect only between 5-20%, having a focus on maintaining relationships post visits is vital. With the use of AI Technology hoteliers can understand their guests’ journey, nurture their current database and allowing them to provide tailored marketing to craft guest experiences that give a competitive advantage against OTAs and increase direct bookings.
Your loyal guests should never be taken for granted, as soon as you take your eye off the ball and stop active marketing efforts to retain these customers, you run the risk of losing guests. Even the most loyal of guests need reminding you are still there.
● Retention and recovery are the same
While great customer service is a given to maintaining customer loyalty, your guest retention should not be left solely in their department.
Retention shouldn’t be dealt with when the customer is nearly out of the door, but before, during and after their stay. But, what’s the difference between customer service and customer experience? In brief, customer service is largely reactive, where interactions are almost always initiated by the customer. Customer experience is proactive, where you’re always anticipating the customer’s next move before they even know it themselves, offering something new and exciting to keep them engaged with your business.
According to Mckinsey, 73% of customers point to experience as an important factor in their purchasing decisions. A good customer experience and journey leave guests feeling heard and appreciated, it minimises friction and the risk of losing business and maintains a human element and a strong lasting impression of your hotel.
While the outcome for both customer retention and recovery is the same – maintaining loyalty. Your attitude and approach to each need to be different. With an effective retention strategy, one that’s personalised and tailored to your audience, you can and will mitigate the requirement for guest recovery.