While this article was written prior to the COVID-19 pandemic, it will bear more relevance than ever as we rely on our sales-and-marketing teams to make good decisions today regarding the business they’re putting on the books for future. These efforts will dictate how readily we will recover.
“We are working on some great leads for August and we feel really good about the pipeline. Our pipeline has a 25% increase in roomnights over last year. Last week we did a presentation to meeting planners, and next month we are planning sales calls with the brand to Washington D.C. The team is focused and is dialing for dollars.”
Sound familiar? These types of updates leave us with a waning hope that in fact we will make August’s budget. We want to believe what the team is doing is effective. But how can we be sure, especially when history tells us otherwise?
Today’s marketplace is going to require a new mindset and new approach. What’s worked in the past doesn’t necessarily work today.
Sales-and-marketing teams and revenue leaders need to shift their approach to become more strategic and proactive.
This first part of a two-article series focuses on strategy.
What we see
Teams asked to present a strategy often are focused on the “story” instead. This includes the systemic issues of why they are, where they are and what attributed to the current state. It is generally followed by an action plan or tactics that are random acts of activity that illustrate what they are “doing” or output, rather than impact.
There is an essence of a SMART (Specific, Measurable, Actionable, Relevant, and Timely) strategy. However, it often isn’t aligned to financial outcomes and feels like a to-do list.
|
SMART goals were all the rage years ago and were originally designed for time management rather than a relation to impact or a growth mindset. It took hold within operations as it tied directly into standard operating procedures and checklists. Today we see a need to have measures or goals that look for impact vs. output, particularly within sales, revenue management and marketing.
Strategy needs to align with the overall financial goal, but many reflect only a list of things teams are doing.
What the best do differently
1. They know their most profitable segments and customers: Online travel agencies’ growing cost of acquisition is of great concern. In many cases, group business can be just as costly if not more. Best-in-class organizations know their most profitable customers and focus on optimizing those segments first.
2. They have strategy that aligns with overall financial segment goals: No story, just strategy. The best focus on how they are going to break down and execute against the segment goal. What companies, organizations and travelers are the focus accounts that could yield what the financial segment goals outline?
3. They look at segments rather than the meta-segments of group and transient: Group and transient strategy is meaningless. There can be up to 20 different types of travelers that make up the meta-segment transient. What the best do differently is to know what segments are not only the most profitable, but also have the opportunity to optimize to increase performance. To reach or grow a segment, teams must understand what it is they are hunting and the best place to find that metaphoric animal. If Sunday night business is the goal, the teams understand what segments present the opportunity to book the Sunday night traveler.
4. Their tactics are focused on impact vs. output: Tactics are specifically chosen to have an impact that directly relates to the strategy.
Useful questions to test strategy:
- Does the team know what segments align with what the hotel needs to increase performance within their market or budget?
- What is the corresponding strategy for those segments? Are they able to articulate if they are looking to have a rate or occupancy push for this segment? Does the segment strategy mirror what they outlined in what they have budgeted for that segment’s performance?
- What are the tactics that you have for those specific segments? Take away the tactics that are “selling” to the brand or selling to current guests. What are you left with? How many tactics are focused on a contact that is in the actual account, rather than a third-party intermediary?
Maxine Taylor is a member and prior president of the Hospitality Asset Managers Association (HAMA), and SVP of CHMWarnick, the leading provider of hotel asset management and owner advisory services. The company asset manages more than 70 hotels comprising approximately 29,000 rooms valued at roughly $15 billion, and currently advises on development projects valued at over $2 billion. CHMWarnick’s hotel owner advisory services include asset management, hotel planning and development, acquisition due diligence, owner-entity accounting, management/operator selection and negotiation, capital planning and disposition strategy. For more information, contact 978.522.7000 or visit www.CHMWarnick.com. For the latest company news, follow CHMWarnick on Twitter @CHMWarnick and LinkedIn.
The opinions expressed in this column do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Bloggers published on this site are given the freedom to express views that may be controversial, but our goal is to provoke thought and constructive discussion within our reader community. Please feel free to comment or contact an editor with any questions or concerns.