Marketing

22 Nov

3 things that make repeat customers come back

Written by Stephen Barr

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Hotel businesses have become so accustomed to using OTAs for guest acquisition that they often rely on them to supply all their guests. 

One business owner recently told me that this method worked for him because it completely removed the hassle of thinking about acquiring customers directly. It was only when I pointed out that a majority of his returning customers were also coming via the OTAs and were costing him a fortune in unnecessary commission that the penny dropped. 

Too many hotel businesses seem to have forgotten how to acquire guests directly and as a marketer, it’s part of my job to help them realise that this isn’t a difficult task, it’s just hard work. 

The simple fact is this: any hotel business that has returning guests should get the bulk of that repeat business direct and not via an OTA.

I’ll go one step further and say that every single guest who makes a repeat purchase through an OTA costs the same amount as a brand new customer. Every penny of those repeat bookings benefits the OTA and not your business, which is made worse by the realisation that the additional cost isn’t necessary. 

This is madness because repeat business should also be more profitable than acquiring a first-time guest (and in most cases, much more profitable) but this can never be the case when it continually comes via an OTA. What’s worse is that you’re teaching your best guests to build relationships with OTAs instead of with you.

The good news is that making a change is much easier than you might think.

Let’s assume that the bulk of your first-time guests will always come via an OTA, along with the inevitable 20-30% (and rising) commission fees. Let’s accept, for now, that you’re not going to tackle that particular issue head on.

Let’s also assume that you are determined to maximise the number of direct repeat bookings from those first-time guests. How do you do it?

It’s called ‘building a relationship’. Like all relationships, you need to remember just three things:

  • It takes time
  • It starts with you
  • You have to deliver what you promise

Remember being in school and wishing that the girl you had a crush on would come over and start a conversation? Admit it—I wasn’t the only one hoping that the girl I had eyes on would make things easy for me...

Well guess what? Guests don’t make it easy either. In this case, at least they’re already in your hotel and—if they’ve just had a good experience—they may come back. If they like you enough, why wouldn’t they book direct next time? 

Here are some simple ideas to help get you started:

What about a money-off voucher for a second stay, only redeemable on the website? It’s not rocket science. If they don’t use it then they weren’t coming back anyway, so you’ve lost nothing. Even a substantial discount is bound to be less than the commission you’d have to pay the OTA for this guest, so you’ve nothing to lose and a relationship to gain.

Perhaps you could offer the same experience? One which includes the room they liked, and perks like a complimentary meal or organised transport. You just need to capture the relevant data, so it’s ready when your CRM team want to send personalised communications to your guest.

It’s important to reiterate that these things take time. First-time guests will take a while to come back for their second stay and only they are in control of when that might be. (Although often, this is highly predictable.) 

You can rest assured that if you’ve made the first move and you’ve done so with the offers that the data suggests are most relevant to the guest’s profile. And when they do come back? All you need to do is exactly what you did last time: deliver, each time. And the cycle continues.

A year later, you’ll find that your expensive first-time guest has most likely turned into someone who has stayed multiple times and is now a high lifetime value (£) guest. The amount you will have spent on the guest to entice them back direct on those subsequent occasions will have proved minuscule compared to the initial investment of acquiring them via an OTA.

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