Measuring Marketing and Merchandising Effectiveness

When a customer books through the hotel call center or website, the hotel operates more like a retailer. When they book through an Online Travel Agency or Travel Agent, the relationship is somewhat removed and is more like a consumer goods company providing a product to customers through a retail channel. Both types of channels offer different degrees of merchandising and marketing options – specifically the opportunity to present the consumer with additional options and value adds that may increase the hotel’s share of wallet.

Hotels must treat each room as a product on the store shelf, being deliberate and strategic about how the room is presented within their merchandising strategy. Not all rooms are created equal – sometimes you can get a premium price, and sometimes you cannot. Price doesn’t stop at the rooms because some guests take advantage of premiums. Spend time analyzing your value-add products and services. Tourists might be interested in food and beverage packages, excursions such as jet ski rentals, tours, golf, or spa services.

This requires a more critical analysis of merchandising and marketing effectiveness, to engage the consumer. If the manner in which you present products to your customers overwhelms them, then that will hurt sales. It would be better to limit the choices to a reasonable list that is more relevant to each guest. How do you know what to offer? That’s where Predictive Analytics come in. Use the data to make recommendations for relevant products to each potential guest. Doing so will allow you to see improved merchandising and an uplift in revenue.

Marketing and merchandising effectiveness begins by measuring the real impact of the offers and products that a hotel is putting out there.

The problem is that many companies aren’t good at measuring the effectiveness of their merchandizing decisions and marketing campaigns. Historical booking, folio, and web traffic data contain vital information that informs those measurements, and it is readily available. This data can be mined to determine the effectiveness of a particular marketing campaign and the effectiveness of web merchandising/assortment decisions. In addition, this analysis is preferred for testing how their customers will respond to offers. It’s better to know what a customer has done – making actual purchase decisions – than what a customer says they will do.

Companies on the cutting edge of these Revenue Management strategies have built entire systems dedicated to measuring marketing campaigns and merchandising effectiveness. These systems also predict what strategies will work best, triggering offers to customers most likely to respond to them and ultimately increasing revenue growth.

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