Category Archives: Value

Smarter Marketing to Past Guests

Welcome back!
Photo Credit: Sarah Joy

One of the mistakes that I have seen many vacation rental companies make is assuming that anyone who has stayed with them before will stay with them again. Instead of regular communication to stay top of mind, they take a passive “If they had a good time they’ll come back” approach. The thing is, this doesn’t work. Not for the majority anyway. Maybe before online bookings and OTAs changed the game, but not now.

It’s just like dating. If you want to see them again you have to pursue the relationship. You can’t assume that because they had a good time the relationship is now defined. Customers are playing the field these days more than ever.

Not only are we constantly bombarded by tons of messages vying for our attention and dollars, OTA’s and listing sites spend millions of dollars a month to get those same guests to book through them. And they’re doing a really good job at it.

The good news is, you can take some of that ground back. While there are no hard and fast rules that ensure success, here are some guidelines on developing a successful strategy to bring your guests back to you.

1. Determine who your customer is. This may sound too obvious but it’s more nuanced than it appears. There is a particular demographic that tends to frequent vacation rentals in your area. Find out who they are and market to them.
Most reservations systems capture some kind of guest information that you can use to build out your customer profile. Is it mainly families? Outdoorsy types? Twenty-somethings? People with pets? Likely it’s a combination of several attributes.

You can cast a wider net but spend the majority of your efforts on your key demographic.

2. Target your offerings. With maybe the exception of holidays like Valentine’s Day and Christmas, a one size fits all approach doesn’t work all that well. Instead, cater offerings to different segments of your customer base. You can promote a relaxing or romantic “Weekend Getaway” for couples. A “Family Fun Week” for guests that have kids, or an “Adventure Weekend” for people without kids that includes kayaking, jet skiing, or rock climbing. 

Your reservation system likely won’t capture all of the data that you need, but you can make some educated guesses based on other demographics. For example, a younger (late 20s-early 30s) person that has never brought kids with them, and only stayed in a 1 bedroom condo/home is probably going to be more interested in an Adventure Weekend than say, the mid-40s couple that brought their kids and stayed in the 3 bedroom home with the pool last summer.

3. Cultivate a relationship with your customers throughout the year. Don’t just blast them with a generic “We’re still here!” message a couple times a year. Instead, focus on things like:

  • What information can you share about your area to get them thinking about the upcoming travel season?
  • What do they need to know in order to plan their stay and make the most of it?
  • Are there new attractions or events that would interest them? A restaurant that’s been getting national attention?
  • Are there things that they need to take into consideration when they travel? (Construction at the airport? Road work? An event that’s drawing tons of people? A new resort that’s causing congestion?) 

Become the expert on your area and share the important stuff with them.

Why would they be better off coming to your area and staying with you? Help them connect the dots. Blogs and social media can be great for this as well.

4. Play your booking curve. You’ll want to send out your ideas and offerings right before and right after the peak of your booking curve. The peak is that period of time that the highest percentage of bookings are made.

Let’s say for instance that July is your busiest time of year, and that the majority of those bookings are made 30-60 days out, in April and May. You’ll want to send your communication pieces in March, June, and August. This will spike interest during those slower times when you are less likely to get passive bookings (passive booking = when the guest takes the initiative) and can net you some additional dollars.

5. Have a compelling offer and call to action. Reminding guests that you exist isn’t enough. You need to prompt them to take action. Usually that means dangling some kind carrot in front of their nose. Maybe that’s a discounted rate. Perhaps it’s reducing the minimum night stay. Or a free night. Or two tickets to a local event. Maybe one free canoe rental. Or a round of golf. Whatever it is, make sure that it’s enticing to the audience it’s aimed at, and put a deadline on it. “Book by 6/20/15” or even “Hurry, space is limited and going fast!”

I realize that “discount” is a dirty word to many rental companies. Like it or not, the internet has taught us all to expect discounts. That’s just the way the game is played now. If you don’t have a compelling offer then chances are they’re going to take their business down the street. Whatever it ends by being, figure out what compels guests to book, and then offer that.

The other thing to consider is that, while you may end up discounting a bit to get the booking, you aren’t paying that % to an OTA or website that is going to do their best to make sure the guest comes back to them instead of you. Look at it as an investment in the relationship with the guest instead of a fee to the OTA. Plus you don’t end up eating the commission, you’ll split the rent with the owner.

One final thought regarding unit descriptions. Make sure that you write your descriptions to your target audience. Or at least the audience best suited for that unit. If it’s a house that’s outside the city, but guests like to go into the city for the day, then highlight the fact that it’s close to public transit and is only a 20 minute bus ride to downtown. If your guests rent cars make sure to call out that the unit has a garage, or that there is plenty of street parking. Highlight that it’s in walking distance to a grocery store, restaurants, or entertainment. Provide reasons to stay before they think of reasons not to.

All of these things take a little extra time and energy but they pay off down the road in a stronger relationship with your guests because you’re getting the right message to the right audience at the right time.

What are other ways that you have found build strong relationships with your guests? Put your thoughts in the Comments section. I would love to hear from you.

3 Powerful Ways Vacation Rental Companies Can Adapt to Changes in the Marketplace

Be prepared for change.
Be prepared for change.

If you don’t like change, you’re going to like irrelevance even less.” – Gen. Eric Shinseki

There is massive change underway concerning how vacation rentals are marketed, booked, and paid for online. We’re just in the beginning stages, but make no mistake, the industry is going through a massive shift again.

The fact is, like it or not, the genie isn’t going back into the bottle. Gone are the days when guests shopped out of a catalogue or brochure and booked their vacations several months, if not a year, in advance, and never tried to haggle over price.

Now guests compare prices, book at the last minute, and think they deserve a discount simply for shopping online. To complicate things even further, companies spend millions of dollars a month to convince guests to book their vacations through them, instead of picking up the phone and calling you. What’s more, the move is being made to allow guests to book your units without having to send an inquiry first.

The good news is, all is not lost. But it’s going to take some adaptation and that word no one likes, “change”.

Here are some things that you can do today to help ensure that your vacation rental business will be around for years to come.

Market to your past guests – I can’t encourage this enough. You are sitting on a goldmine in the form of your past guests and yet most vacation rental companies do not actively market to their past guests. This is the most important thing you can do that will offset people going to an OTA or listing site in order to book their next stay with you.

Contact them regularly (bi-monthly is fine) with compelling calls to action and offers. Just getting in front of them isn’t enough. Tell them why they should stay with you again instead of going somewhere else.

Target communications to specific segments of your customer base. Do you have homes that are perfect for families? Send an e-mail highlighting those units to past guests with kids and talk about all of the family friendly things that your area offers.

Have units that don’t seem to rent as well as the rest? Put together a “bargain” offering. Lower the minimum night stay for those units. Offer up to two tickets for a local event or show if they book one of the units by a certain date. There is a ton that you can do to keep your company top of mind with your past guests. Be creative and leverage your uniqueness.

Yield Management – If you don’t know what this is, you need to. In a nutshell, Yield Management is taking advantage of supply and demand. You can raise or lower your rates and minimum night stay in order to capture more revenue. More revenue = longevity and greater freedom.

Here’s one example of how you can leverage this. The majority of guests book holiday vacations (Christmas, New Year’s Eve, etc.) several months or more in advance. Determine how far in advance you get the majority of those bookings and charge a premium for booking during that period. Say you get the majority of your holiday bookings 8 months prior to arrival. Increase your rates 10%-15% for bookings that are made 8 months or more in advance.

On the flipside, determine the time period in which you get virtually no bookings for the holidays (usually a week or two before the date) and offer a reduced rate and/or reduced min night stay to capture additional revenue. The goal is to leave as little money on the table as possible.

Distribution – This has become the “necessary evil” for many vacation rental companies. Distribution channels like HomeAway, Airbnb, and TripAdvisor are here to stay. Like it or not, most travelers are going to start at these websites to book their next vacation. So having your units on these sites gets them in front of eyeballs that otherwise wouldn’t see them. The thing is, you don’t have to love this fact in order to benefit from it. Get the guest through distribution, and keep them coming back through direct marketing.

Here are a couple of guidelines for distribution:

  • Use what works. You don’t have to be on every site out there. Focus your inventory on the sites that drive the most bookings and ignore the rest. Even if what works is a little more expensive than what you’d prefer.
  • Make sure your units stand out. Take the time to get great photos. Write descriptions that help the guests see themselves in the unit and enjoying all that the location has to offer. Don’t assume that guests are going to connect the dots on why they should stay with you. Write photo captions. Highlight positive guest reviews and respond to negative ones. Don’t try to hide the fact that you got less than a 5 star review. The negative reviews give legitimacy to the positive.
  • Split the marketing costs with your owners. More and more sites are moving towards a commission based pricing structure and many vacation rental companies can’t afford to swallow the entire commission. It’s worth suggesting to your owners that in order to continue to participate on a particular website (which delivers $X a year for them) you can’t continue to eat the entire commission. All of the companies that I know that have done this haven’t regretted it. Some of their owners said “no”, but they’ve been surprised at the number that have said “yes”. Most people tend to be pretty reasonable and fair if you frame your request in a thoughtful, “win-win” sort of way.

Putting it all Together

Each one of these things is good to do but the key is to combine all of them into a cohesive strategy. What works best for you will depend on your location, type of guests, booking trends, and individual economics. It takes a little bit of time to find what works for you, but it is absolutely worth it in the long run.

If you need help getting started or aren’t sure how to figure out what will work best, I can help. Contact me and we’ll get started.

Value

Value

There is some really great and encouraging information in this recent article from TripAdvisor regarding the 2015 travel season. According to the article, more travelers are planning on staying in vacation rentals this year due to an abundance of information about them being available online in the form of reviews and photos.

Speaking of photos, having photo captions can greatly increase the number of inquiries a unit gets. Here is a really informative article about how to write great photo captions for your units.

Reviews are also extremely valuable to you. Not only do they give your prospective guests confidence in booking with you, they can also tell you where your blind spots are. I also know vacation rental managers who use reviews to get their owners to upgrade furniture, amenities, or the unit itself. If you aren’t reading your reviews to learn how you can better serve your guests, you are missing out a big opportunity.

One of the biggest things that jumped out at me in this article was how much value is a determining factor in a traveler’s decision.

For instance, 49% plan on booking a vacation rental after having read about or discovered the value and/or amenities that it offers over other forms of lodging. It goes on to say that 62% cited vacation rentals offering lower rates than hotels as their motivation for staying in a vacation rental in the future.

I think something that often gets overlooked, but is worth clarifying, is that value doesn’t necessarily mean the lowest price. It just means that the customer wants to feel like they got more for their dollar than they would have with a different option.

Let me share a quick story about value that I saw firsthand a few years back. Our local ice cream shop was under new ownership and the new owner was intent on making a profit like any good business person. What ended up happening though is that the servings became a lot smaller than they were under the previous owners, which upset many of the customers. I remember watching one disgruntled customer asking to talk to the owner, and then explaining how it was unacceptable that he paid $5 for the little bit of ice cream that he received. The new owner tried to explain that the previous owners were too generous with the serving size which reduced their profits to the point of having to sell the business. The angry customer didn’t care what the rationale was though. Then he said something that I’ll never forget. He was referring to the taco place across the street and he said, “When I take my family to eat over there, I get a free meal after I purchase 6 meals. That makes me feel good. I feel like I’m getting some value for my dollar.” (Emphasis mine)

What I learned that day was that how a customer feels about the transaction is waaaaaay more important than the actual details of said transaction. Let’s just look at the facts for a minute.
When this customer took his family of 4 to the taco place, he likely spent ~$10 per person, at least. A taco or burrito, plus a drink came out to roughly $10 after tax was included. From a strictly economic standpoint, this is a terrible deal for him. He has to spend $60 in order to get $10. Granted, you could argue that it was money he was going to spend anyway, but that doesn’t matter. What matters most is that he felt like he was getting value. Now I’m not suggesting that it’s ok to deceive customers and make them think that they are getting something for nothing. The point I’m trying to make is that how a customer feels about the transaction, based on their perception of the value they are receiving, is what matters most to them.

Here is some more interesting information from the article about value. The highest percentage (26%) cited a kitchen as the most important amenity. It then goes on to say that 72% cite this as their main cost savings measure. If travelers want to cut costs by preparing at least some of their own meals and eating in, one way to accommodate this and provide value would be to offer (for a small fee) a grocery package that could be purchased so that when they arrive some of the basics (milk, eggs, bread, peanut butter, etc.) are already there in the unit, thus saving them a trip to the store and allowing them to get right into their vacation. Or leaving a $10 Trader Joe’s gift card (or whichever local grocery store you like) along with a handwritten “Thanks for staying with us!” card on the kitchen counter for those guests that are spending more than $X with you. I guarantee that will make a positive impression, and that $10 you spend on the card has the potential to bring you way more in word of mouth referrals.

The last thing I thought was noteworthy is that nearly half (48%) cited free parking as a motivator for staying in a vacation rental.

Now these are all folks that “get it” when it comes to vacation rentals. But what about those that don’t get it yet? One of the best things that you can do is to educate your prospective guests on the value they are receiving by staying with you over the other alternatives. Help them understand through your website, correspondence, phone conversations, etc. that they get more square footage for their dollar with a vacation rental, not to mention more privacy, solo use of the amenities and features, etc. Adding details such as “A 5 minute walk to the beach” or “15 minutes from downtown” into your unit descriptions and photo captions will help the guest understand they aren’t losing anything by staying with you instead of a hotel. (Most hotels are closer to things like movie theaters, restaurants, stores, beaches, etc.) Call out “Free Parking” as a selling point in your unit descriptions and/or photo captions as well.

Remember, how a customer feels about the transaction, based on their perception of the value they are receiving, is what matters most to them. Calling out all of the ways that your unit(s) offer value to the customers can be a powerful motivator in getting them to stay with you and tell their friends and family about it.