Profitability Strategy #2: Build Loyalty to Increase Repeat Guests

October 23, 2015 NAVIS

Guest loyalty has become synonymous with programs, but genuine guest allegiance does not arise from programs with their complex points systems and rules. True loyalty arises from a relationship; it is built by connection. The benefits of achieving true loyalty are many, but when it comes to profitability, in particular, loyal repeat guests are essential. Repeat guests are less costly to acquire and, research shows, less price sensitive.

Forbes’ Micah Solomon notes, “The closer you get to providing a superior, personal, customer experience, the more you can minimize price as a consideration, at least for the customers who care about such things” (Forbes).  Personalized service has become almost as common a phrase as loyalty program, but the value of tailor-made service cannot be underestimated. Nor is it as difficult to achieve as many vacation rental managers (VRM’s) have been led to believe.

Building loyalty begins with asking the right questions and providing authentic, accurate responses. The best opportunity to excel at this is on the voice channel, which is perhaps, why this channel generates more revenue than any other. Notably when it comes to repeat guests booking on the voice channel, the revenue is 29% greater than new guests booking via the voice channel (NAVIS).

Gathering information and creating a relationship are the beginning; however, loyalty is built brick by brick, and the follow up is where long-term devotion is cemented. Just as you would in a budding friendship, use what you know to reconnect at every opportunity. (Presumably all pertinent data gathered by agents is stored in a tool such as the NAVIS CRM where it can be drawn upon during future calls. Taken a step further, with Narrowcast calls may be re-routed to previous agents to continue to build that one-on-one relationship.)

Once the guest has departed, many VRM’s miss an opportunity to create personalized guest messaging that extends exceptional guest service. Tailor-made guest marketing can be established using a CRM to segment guest data. Vacation rental segments may be based on:

  • peak season
  • price-sensitive shoulder season
  • guests with specific recreation preferences (i.e., beach or ski)
  • high ADR guests
  • unit type and/or luxury level
  • anniversaries and birthdays

Lifecycle marketing campaigns can then be programmed to reach out at the ideal times throughout the year automatically, based on segmenting. Attesting to guests’ desires for personalized correspondence, the open rate for a LifeCycle email campaign averages 40.30%, among the highest in the leisure industry, and click-through rates are a healthy 6.24%.

The opportunity for vacation rentals to create lifelong guests is, in some ways, greater than it is for traditional lodging options. These travelers want to know their destination intimately. They want to explore and walk and feel like a local. The value of the rental is not so much in the rate attached but in the experience it offers. Putting a voice to that experience and following it up with recognition of their interests reaffirms the significance of the experience. Fortunately, it also has great worth for VRM’s. The repeat guest is the Holy Grail. According to Bain & Co, just a 5% increase in customer retention can increase profitability by as much as 75% (Social Media Examiner).


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