Six Segmentation Mistakes that Will Cost Your Hotel Money
The data is clear: If you’re not segmenting your guest database and sending targeted emails rather than generic blast emails, your marketing is much less effective than it could be.
Of the hotels that do send targeted emails, most base their segmentation on available fields in their CRM, their guests’ purchase history, or other digital behaviors identified within their business. Those with marketing automation tools may also base their segmentation on a particular system, like a loyalty program or PMS, that factors in a few other dimensions as well.
But is your hotel getting the most out of segmentation, or are you leaving money on the table?
Here are six common mistakes to avoid if you want to get the most out of segmentation.
1. Not having clean data
Basing decisions on data that contains duplicates, data that’s outdated, or data that’s not normalized makes for inaccurate segmentation. Nothing’s more embarrassing than sending two different promotions to the same person at the same time! Even worse, having a high bounce rate on your emails can your email sender score and affect your deliverability.
Make sure your data is clean, accurate, and streamlined.
2. Defining segments by instinct without backing them up with data
Although segmenting on the basis of guest profiles or personas constructed based on assumptions is a good starting point, especially when you are just starting out, it is unwise to finalize your segmentation without first doing analysis.
For example, defining as profitable a segment that actually brings in the least amount of revenue is a mistake that only looking at actual numbers can show you is a mistake. Therefore, customer data must be analyzed when creating your segments.
If you are lacking data because you are just starting out or you’re running a small hotel, you should conduct tests prior to finalizing your segments. Your tests could include sending email marketing campaigns and looking at results, running limited digital marketing campaigns and seeing what kind of interest they generate, running A/B tests, and so on.
3. Analysis of your guest data is not based on the right goal
The guests in your various segments should be defined and targeted based on your hotel’s specific business goals. Each of those different segments should then be marketed to in accordance with your goals for them.
For example, if your hotel has openings for an upcoming weekend, you’ll want to target guests who are likely to book on short notice. It makes sense in this case to have a segment of guests who live within driving distance of the hotel.
4. You’ve based your guest segments on the small amount of data you have and nothing more
Your ideal segmentation may be based on variables and fields that you have not collected information on yet. For example, if you are trying to get guests who previously booked through an OTA to book directly with you next time, you are unlikely to have email addresses for those guests and should therefore collect them upon check in.
You should always be evaluating your ideal guest profile and your needs for segmentation, and making sure your data collection is getting the valuable information you need from customers.
5. Timing is critical when engaging with guests
It is wise to additionally segment an already defined segment based on their place in the guest journey. Guests should receive different emails in the post-booking/pre-stay period than they do during the stay and after they check out. This will help you get the right information in front of your guests at the right time, leading to a greater chance of upsells, on-property ancillary revenue, and repeat bookings.
6. Not evaluating performance
Failure to make decisions based on data can be costly. Some businesses compare segments to evaluate performance. However, a more valuable method is comparing the same segment of guests over a period of multiple campaigns to determine whether those campaigns are a match for that segment.
Doing that will allow you to track overall improvement in your marketing to that particular segment. If performance of that segment goes up, you can identify what you’re doing right and duplicate it. If it goes down, you can figure out what the problem is and fix it in future campaigns.
Overall, it’s a good idea to regularly review your segmentation practices to see whether you need to give them a facelift. When segmentation is done right, it boosts your marketing ROI and makes your efforts much more worthwhile.