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Mr. Hechtkopf

Guest Service / Customer Experience Mgmt

How Hotels Can Improve Guest Loyalty Through SoLoMo Marketing and a Locals First Focus

By Bram Hechtkopf, Vice President of Business Development & Marketing, Kobie Marketing

To loyalty marketers who thought they knew what SoLoMo stands for: think again. Spelled out as Social, Local, Mobile, too often the 'Lo' in SoLoMo is thought of as a strictly location-based initiative. But thinking in those narrow terms fails to consider a vital and valuable subset of hotel guests: locals.

Think about it. How often do locals say, "Oh, I wish I could be a tourist in my own city?" Instead of being incentivized to walk through hotel doors via an engaging experience or rich loyalty program, locals fail to consider options that are nearby or right in front of them. Only on special occasions like birthdays, anniversaries or nights out at the theater do some locals buck this trend. Otherwise, a largely untapped market is being unfairly ignored.

A recent info-graphic released by The Location Based Marketing Association and Venuelabs speaks to this point. In a review of 265 cities, it was found that hotel brands are missing as much as 85% of local customer feedback. It also found that locals are 12 times more likely to give a brand positive feedback compared to non-locals. Meanwhile, another study by hotel software company Monscierge found that 73% of hotel guests want local recommendations.

So "local" and location-based marketing isn't simply about performing a search for "hotels in Nashville" or researching "Vietnamese restaurants near New York's Plaza Hotel."

It's also about people living in proximity to a hotel. And, for hotel loyalty marketers, tapping that lucrative 'Lo' segment.

But as hotels are working harder to engage guests and create new experiences (which include 4-star onsite dining, book readings, poetry nights, free in-lobby Wi-Fi, wine tastings and the "Starbuckification" of the lobby itself) they should also consider the truly local aspects of the marketing term SoLoMo. Perhaps we should also be asking how can hotels more effectively wed that local engagement to social and mobile marketing.

Engaging Locals Through the Five 'Es'

Nearly four years since the Great Recession began, one in four travelers still plans vacations close to home to save money. Especially in an uncertain economy where the "staycation" is alive and well, locals can be a hotel's most valuable asset.

And that begins with how they approach what I call the "Five Es," or:

  • Enterprise
  • Experience and Engagement
  • Economics
  • Enabling Technology
  • Execution

Enterprise speaks to the business at hand (hotels in this case), experience and engagement relates to the brand relationship customers seek, economics concerns the cost of generating such loyalty, enabling relates to the mechanics and technology that runs the loyalty program and execution refers to its real-time deployment and operational effectiveness.

Localizing Loyalty Outreach

For a variety of reasons, locals are a great test market to measure how successfully each of the five 'Es' is being implemented:

  • The hotel in question can easily turn mobile outreach for promotions and on-property events into physical action because locals can conveniently reach nearby establishments. For instance, if a mobile app sends push notifications for discount drink specials the following Tuesday, residents can quickly make the trip.
  • Likewise, engagement should be easier as hotel brands can better appeal to local pride, improving guest outlook. That means hotels can partner with restaurants, sports teams and retail and entertainment outlets for specific events, attracting local interest.
  • There's also an intrinsic sense that many locals want their area hotels to succeed. The Venuelabs study also found that consumers are 35% more likely to discuss a local brand positively - a fact hotels can use to great advantage. Such neighborhood staples attract out-of-towners, increase foot traffic and have a generally positive influence.
  • Speaking of discussing brands positively, if guests are already feeling passionate or optimistic about a stay or visit, hotels can encourage them to share their positive experiences on social media, making the enablement and execution of a loyalty program easier than it would be if non-residents were the primary focus.
  • Locals often travel fewer than 50 miles to a hotel. This means that, as guests, they're likely to spend on hotel amenities what they saved on flight and other travel expenses. Costs lower not only for locals but for hotels too, as all aspects of loyalty outreach are less expensive, operating (at least initially) on a localized scale.

Locals also serve another important benefit. While their proximity and pride are pluses that can't be replicated, their smartphone usage patterns can. That means the metrics and analytics gained from engaging locals via mobile and social can be quickly adapted to guests at large.

In this way, local guests are like beneficial test subjects. SoLoMo's linchpin, the smartphone (uniting social media and location-based marketing together in one device) has become one of the world's most ubiquitous technologies. According to Expedia at the second annual Cornell Hospitality Research Summit, more Internet traffic is recorded over mobile devices than over desktops or laptops, two-thirds of Americans sleep with their smartphone within arm's reach and mobile bookings (a vital measure of mobile outreach's ROI) are expected to double from $16 million to $32 million by 2016.

Examples of Localized Engagement

Encouragingly, some hotels are starting to better engage local patrons with positive results. The recently-opened Capella hotel, in Washington D.C.'s Georgetown neighborhood, began the local engagement process from the ground up. Capella went out of its way to keep area residents informed on the design and aesthetic impact the new hotel would have on the neighborhood. The hotel offers locals access to exclusive Washington Ballet performances, classes and even behind-the-scene tours. In another example, the still-under-development Hard Rock Hotel & Casino New England, in West Springfield, Massachusetts, is using social media to keep locals abreast of the latest progress and designs plans.

Upon completion, the property will include a 350-room hotel and a 100,000-square foot casino with 100 table games and 2,500 slot machines as well as a Hard Rock Café. Ensuring this large, complex project fits West Springfield's overall aesthetic will be very important. Also, returning to our 50-mile threshold, West Springfield, although a small city of 28,000, may prove critical. Located at the crossroads of south-central New England (and an immediate bedroom community of Springfield proper), West Springfield is within short driving distance of: the southwestern Boston suburbs, greater Hartford, Albany, New York, southern Vermont and the extreme northeastern suburbs of New York City. If a project like this sours, the impact will be felt across a large region, affecting not only "hyper locals," who live in West Springfield, but regional locals too.

That said, Hard Rock New England would further benefit by employing tactics used by the Omni Fort Worth Hotel, in Fort Worth, Texas. Rather than just inviting locals to comment on their experience or on the property in general, the Omni offers local residents reduced rates and Texas-themed events. It also has relationships with an area museum and a famous Texas luxury boot maker. Even the property's on-site restaurant, Cast Iron, (one of four) was created with locals in mind and evokes frontier living while emphasizing native foods.

And Boston's Liberty Hotel goes one step beyond Capella, Omni and Hard Rock New England by offering free events five days a week for downtown Boston residents. While none of these examples explicitly reference mobile, you can be certain they all have Facebook pages, Twitter feeds and that friends and family are texting and tweeting about their experiences. Given time, some of these brands might go the route of Marriott's Renaissance Hotels, which launched the Navigator Program last year. In conjunction with Twitter and Instagram, the hotel built a database generated by locals listing the best places for eating, shopping and entertainment. After just six months the campaign saw the hotel's number of Facebook 'likes' rise to 303,000 from 40,000 (a 658% increase) while Twitter followers grew to 28,000 from 5,000, a 460% increase.

Here, too, the current program has much potential for further growth. Rather than simply soliciting local reviews, future programs could easily add loyalty and gamification elements to such outreach. What if locals could earn a free night's stay provided their reviews were the highest-ranked for a given week?

Homegrown Hospitality

Considering that more than 90% of global smartphone users search for content on their mobile devices and that 61% research local content, it's clear mobile engagement is a vital way for hoteliers to attract, engage and retain their guests. Yet infographics like the one produced by Venuelabs underscore how a critical component for hotel outreach - locals - is being overlooked. Even as the economy continues to improve and staycations lose their luster, engaging locals through loyalty program perks and unique offerings that only residents can enjoy is a great way to build brand commitment while serving as a launching pad for more expansive out-of-town loyalty outreach. And, by starting small, incorporating the 5 Es into your hotel's loyalty framework should be easier and more efficient.

So, as the summer travel season starts to heat up, now is the time to make sure the 'Lo' in your hotel's SoLoMo efforts is fully maximized and switched into high gear.

Bram Hechtkopf is Vice President of Business Development & Marketing for Kobie Marketing - a fully-integrated, customer loyalty marketing and customer retention agency, providing innovative solutions to customer loyalty and retention challenges. Mr. Hechtkopf consults with current and prospective clients on new business opportunities, helping to develop customer retention and loyalty marketing strategies and solutions that drive increased retention and spend. Following in the footsteps of his father, Kobie’s founder, Mr. Hechtkopf is eager to continue Kobie’s vision of technology and data analytics as enablers of leading-edge marketing executions for world-class customer loyalty initiatives. Mr. Hechtkopf has consulted with a wide array of leading brands including AMC Entertainment, TGI Friday’s, BJ’s Restaurants, Verizon, Bank of America, RBC, Flagstar Bank, JPMC, Sagicor, Coca Cola, Cox Enterprises, Ruby Tuesday, Hawaiian Airlines, and Royal Caribbean Cruise Lines. Learn more about Kobie Marketing at www.kobie.com Mr. Hechtkopf can be contacted at 727-822-5353 or bram.hechtkopf@kobie.com Extended Bio...

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OCTOBER: Revenue Management: Technology and Big Data

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