Companies need to change strategies as the economy changes from good times to bad.  This message was brought home when I read a White Paper from my friends at Peppers & Rogers Group.  The paper had a great chart highlighting the shifts companies need to make

As the economy expands businesses should focus more on acquiring new customers.  And as it moves into a downturn, where it is today, companies should be focusing more on servicing and growing their existing customers.

With budgets tight and research showing it costs 6-10 times more to attract a new customer than retain an existing one hospitality marketing professionals need to focus more on their current customer base – making them feel like VIP’s and inviting them back.

Hotels most successful at re-attracting past guests share common marketing philosophies.  They:

  • Focus on capturing correct/complete contact data at registration
  • Keep that information up-to-date with regular NCOA
  • Understand the lifetime value of each guest
  • Follow a strategic vs. a tactical approach to marketing
  • Embrace Customer Relationship Marketing (CRM)
  • Actively promote both offline and online word-of-mouth advertising
  • Understand and employ direct marketing best practices

You’ll find plenty of customer retention ideas on the Hospitality Marketing Blog.  I’m sure other readers would love to hear your ideas.  Please feel free to share – add a comment.

Safe travels – Madigan Pratt

AUTHOR: Madigan Pratt
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  • Madigan, I like that chart from Peppers & Rogers about growing and then harvesting during business cycles. However, I think hotels need to be careful about cutting back too much at the expense of innovating. Otherwise, they’ll emerge from this recession with an outdated company.

    That was a big theme at this year’s ITB conference:
    http://www.hotelmarketingstrategies.com/top-10-insights-from-phocuswrightitb-2009/

    March 17, 2009
  • Madigan, I like that chart from Peppers & Rogers about growing and then harvesting during business cycles. However, I think hotels need to be careful about cutting back too much at the expense of innovating. Otherwise, they’ll emerge from this recession with an outdated company.

    That was a big theme at this year’s ITB conference:
    http://www.hotelmarketingstrategies.com/top-10-insights-from-phocuswrightitb-2009/

    March 17, 2009
  • Madigan Pratt

    Josiah – Good point. I don’t think Peppers & Rogers is suggesting companies move 100% in either direction depending on the economy. Instead I think they are saying companies need to adjust their emphasis.

    For example, hotels always need to acquire and retain profitable customers, but in a downturn they should be placing more emphasis on customer retention. It’s easier and less expensive to get past guests to return than attract new ones. Hotels still need advertising (but maybe less or shift more to online) and PR which does serve to attract new customers.
    – Madigan

    March 18, 2009
  • Madigan Pratt

    Josiah – Good point. I don’t think Peppers & Rogers is suggesting companies move 100% in either direction depending on the economy. Instead I think they are saying companies need to adjust their emphasis.

    For example, hotels always need to acquire and retain profitable customers, but in a downturn they should be placing more emphasis on customer retention. It’s easier and less expensive to get past guests to return than attract new ones. Hotels still need advertising (but maybe less or shift more to online) and PR which does serve to attract new customers.
    – Madigan

    March 18, 2009

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