02 Jun 2011 by ReviewPro in Online Reputation Management
Do you think buying a reputation management tool isn’t something you can afford? Perhaps it’s time to put the costs into perspective.
Before we look at how reputation management can make you more money and save you money, let’s understand the role of reviews in the buying cycle.
The reality is that online reviews have a clearer link to revenue than any other form of social media. This is because different phases of travel planning involve different types of information. While someone may be using Facebook or Flickr in the early stages of the planning process to decide on a destination, hotels reviews are typically consulted immediately before the accommodation purchase takes place. Because of the timing, reviews have a direct link to hotel sales.
If you want to demonstrate ROI and higher sales through social media activity, this is easiest to do by putting your investment in reputation management.
Make more money with a positive reputation
Jean Francois Mourier of RevPar Guru confirmed there is a direct link between a hotel’s online reputation and the rates a hotel can charge on their websites. The same thing is true on third-party distribution sites. According to Brian Ferguson, VP of Analytics at Expedia, a 1-point increase [on a 1-5 scale] in a review score equates to a 9% increase in average daily rate (ADR).
Reputation also affects your sales conversion rate. PhoCusWright research showed OTA shoppers who visit positive hotel review pages in OTAs are twice as likely to make a booking. According to Jennifer Davies of Expedia: “Good reviews of 4.0 or 5.0 generate more than double the conversion of a review of 1.0 – 2.9.”
Some of our innovative clients are going a step further in maximizing revenue by comparing reputation indexes with historical revenue data, allowing them to maximize rates moving forward.
In the end, hotels that neglect their online reputation often have to resort to slashing rates. Focusing on building your online reputation can help prevent you from being forced toward discounting.
Make more money by increasing your advertising effectiveness
With semantic analysis, you can improve marketing and advertising communications and create compelling promotional messages. Instead of guessing what people like about your hotels, you can use ReviewPro’s semantic analysis to understand the sentiment about each part of the guest experience. If the majority of positive reviews talk about how nice your rooms are, for instance, an advertising campaign created to promote the room design might be more effective than one that highlights a part of your hotel that guests don’t seem to appreciate as much.
It helps create advertising that focuses on your brands’ competitive advantages.
Make more money by increasing your search visibility
Optimizing your reputation will lead to more people finding you in search engines. A key development that has taken place over the past few months is that search engines have become much more social. Google and Bing are using data from Twitter, Facebook, and online reviews to determine how they rank websites in their results pages. (And placement is critical, with the first 3 results on a search page receiving 79% of the clicks.)
Invest in building your social media presence and cultivating as many online customer reviews as you can to increase your positioning and drive more website traffic.
Make more money by increasing guest loyalty
Online reviews provide hotels with the opportunity to build loyalty through listening to feedback, making changes based on it, and then communicating these changes back to customers. Recent research from the CMO council made the impact of loyalty on profitability very clear.
- Acquiring new customers can cost five times more than satisfying and retaining current customers.
- Loyal customers are 15 times more likely to increase spend than high-risk, intermittent customers.
- A two percent increase in customer retention has the same effect on profits as cutting costs by 10 percent.
Semantic analysis of online reviews also presents the opportunity to continually improve quality, leading to more satisfied guests and higher loyalty. We encourage you to read the case studies of Olivia Plaza Hotel and Sidorme to see how these hotels are improving quality this way.
Save money by increasing inbound demand
HubSpot research shows that inbound marketing costs 64% less per lead than traditional, outbound marketing. The amount you pay for each booking you receive could be much lower if they find out about you in social media and on review sites. Focusing on encouraging more positive online reviews can reduce the amount you have to spend on advertising and traditional marketing channels.
Save money on quality assurance and market research
Online guest reviews act as a 24/7 mystery shopper that allows you to view your hotel through the eyes of guests. Rather than hiring a traditional mystery shopper, analysis of online reviews can provide a much more comprehensive view of what your clients are experiencing.
Additionally, reviews and the social web can act as a virtual focus group to test new ideas. Anything from advertising concept testing to market research can be done by engaging with your social audience – but receiving these benefits requires you to have a tool in place to collect insights.
Save money by using time more efficiently
Directly involving managers in hotel reputation is important, but they typically have very little time – and their time is valuable. A top priority for hotel managers is not to spend time aggregating data: software can do that. Time should be spent serving guests and acting on the insights a reputation management tool can provide.
Reputation management technology can save hours of time each week for each executive involved in the program. Though saving time isn’t primary reason to use ReviewPro, this aspect alone quickly covers the investment amount.
Just one additional room night each month
Any one of the benefits above would more than pay for the price of ReviewPro. In the end, it comes down to the fact that if you just acquire or retain 1-2 additional room nights at a hotel per month, it will cover the cost of the product.
See these benefits of ReviewPro for yourself by requesting a demo today
