DEVELOPMENT
In a sector where getting found is uniquely important to success, I’m often surprised to see hospitality businesses held together with little more than marketing duct tape and twine. The belief that better quality products – on their own – are enough to drive better outcomes routinely leads operators to underinvest in both their communications strategy and the budgets that power it. Where managers used to find some success with DIY hospitality marketing strategies, most are now facing a stiffer challenge with implementing them – that is, the sheer size and complexity of a communications ecosystem that requires full-stack expertise, tools, and insights to leverage on a daily basis.
It’s left many operators in the space overwhelmed with the potential time and cost of building an omnichannel marketing strategy and unsure about the true return on investment. While most understand that brands who build a persona, communicate their offering, and foster word-of-mouth are more likely to both attract and retain customers, they just don’t have the bandwidth to manage it. Others, having never built marketing into their bottom line to begin with, end up in a loop of sporadic, short-term, and relatively ineffective outreach which inevitably fails to meet their long term objectives.
So, how can hospitality brands like restaurants, hotels, resorts, spas, et al leverage today’s marketing ecosystem to drive growth? What are the right-sized solutions that make the best use of their marketing budget? In this post, we pull back the covers on some of the most important issues for hospitality leaders who want to leverage the modern marketing ecosystem but are unsure of how to make it work for them.
A Crash Course in Omnichannel Marketing
Before diving in, let’s sync on how the marketing ecosystem has changed – more specifically, how that change will influence your approach to building a hospitality marketing program:
The omnichannel methodologies driving today’s most popular strategies are not suped up versions of the “do it yourself” methodology endemic to small businesses for the last fifty years. The fact that many leaders in the space refer to marketing as a single homogeneous skill set is indicative of a fundamental misunderstanding about important realities endemic to today’s marketing ecosystem. In reality, marketing now comprises four autonomous capabilities: Strategy, creative, technical, and operations – each having a broadly different subset of categories within them.
While you will meet “marketers” with occasional crossover skills, banking on an “all-purpose” unicorn to cover the whole of your marketing strategy is guaranteed to fail. To build omnichannel messaging, today’s most successful brands use an integrated marketing approach that binds each of these capabilities together via a qualified project manager. It follows that your marketing manager – whether an employee or an agency – is only as effective as the resources you give them. While the project manager may be able to play one or two of the roles in a small business setting, you’ll have to empower them with additional support to implement the rest or their impact is going to be limited.
In reality, marketing now comprises four autonomous capabilities: Strategy, creative, technical, and operations – each having a broadly different subset of categories within them.– RION HABER
If this all sounds expensive, it can be; the integrated strategies in use today were developed by enterprise players with the resources to go big. While you may not be able to match their investment one for one, understanding how the approach works can help you build a more functional marketing strategy with clearer expectations and deeper, more meaningful results.
What Should Hospitality Brands Spend on Marketing?
The first step to building a better hospitality marketing strategy is defining your budget. So, what should brands be spending on marketing? The short answer (excluding new locations, which should have their own “go-to-market” budget) is typically about 7% to 10% of total revenue. It should go without saying that different types of businesses in the space have broadly different circumstances, but this is an effective starting point. Any less and you run the risk of underpowering your marketing machine; any more and you tear into your bottom line. The only thing worse than spending too much on your marketing is spending too little to build the brand recall that defines its impact.
Do you need an entire full-stack team at your fingertips? Of course not. Like most growing hospitality businesses, you’re looking to hire a single expert who knows enough about the ecosystem to stay up to date, advise, and implement your marketing strategy. That may be as simple as a single part-time marketing manager or complex as a fully-integrated marketing services agency. Whatever the case, you need to build a marketing and communications budget both for the marketer and the resources they’ll need to do what you’re asking. In some cases that work may be layman’s knowledge; in others, they’ll need to reach out to other subject matter experts or leverage additional third-party ad platforms. In either case, marketing should be part of your cost of doing business.
What Type of Marketing Should Hospitality Brands Invest In?
What’s the secret sauce for hospitality businesses looking to get noticed? The short answer is that there isn’t one; your strategy should reflect your brand’s offering, business strategy, vertical, size, market, and of course, budget. A competent marketing manager should be able to think strategically and creatively to leverage the marketing ecosystem to get your brand noticed.
That said, there are some universal truths on both sides of the hospitality marketing coin:
Think About Investing Here
Focus on channels that allow you to execute these type of strategies
Think Local
As someone taking on hospitality marketing, your job is to think local. There are all sorts of strategies to accomplish this, but we tend to focus on organic platforms, like reputation management, seo, and referral marketing, strategic partnerships, loyalty programs, etc.
Drive Word-of-Mouth
Word-of-mouth, or “advocacy” is the single most important factor for growing hospitality brands to gain traction. It takes ingrained operations and consistent execution and brand experiences delivered over time to realize it. Influencer marketing and promoters are examples of engineered word-of-mouth, but can be tricky to make feel organic.
Leverage Multimedia
We’ve all heard the phrase “people eat with their eyes”. Investing in strong multimedia content powers your other marketing channels, from social to email, to channel marketing partnerships with nearby lodging and other destinations.
Approach These with Caution
Be careful not to spend too much time here without a firm strategy
Social Media
On the whole, social media can be a great way to communicate with your fans. But, because these platforms limit organic reach to drive advertising spend, unless you’re financially prepared to boost content it can also behave like a money pit. Define your goal for social and be honest about the platform’s capabilities.
Paid Media
Does paid media work? The clear answer is… sort of. Since hospitality tends to be intensely word-of-mouth driven, customers tend to view advertising with a suspicious eye and click through rates can plummet quickly if social proof isn’t a big part of your program. If you invest here, be sure to understand your audience buyer journey.
Sponsorships
Sponsorships can be a late-stage way to shape positive sentiment around your brand, but in our experience won’t draw any type of extended interest or engagement in your brand because they don’t reach customers at the right time in their buyer journey.
There are, of course, a wide variety of positive and negative touchpoints outside of these strategies – many of which need a more nuanced eye analyzing their appropriateness for your specific hospitality business.
How Can I Measure Return on Marketing Investment?
Since the first marketer launched the first marketing campaign, executives have been asking how they can draw a direct line between the dollars spent on marketing efforts and revenue earned from those efforts. Since that time, marketers have given the resounding answer… “It’s complicated”… That’s because, even in the most tightly controlled funnels, your customers rarely proceed in a straight line from awareness to conversion. It, more often, resembles a round of golf; you may, on rare occasions, hit a hole in one, but if that’s your only measure of success, you’re not going to be “successful” very often.
While you can use average acquisition costs (averaged over a standard period) as a starting point for understanding your success, attempting a one-to-one connection between a single dollar spent and earned are fraught with polluting factors. Instead (and sticking with our golf analogy), humans tend to shop like we play golf – in stages, moving from touchpoint to touchpoint until we take action. We should measure them in averages using the same touch points. For example, 80% of the target audience saw content, 40% showed interest, 20% performed a cart action, and 10% checked out. From there, it will become easier to spot what’s working and what’s not.
Moreover, when measuring the cost of one acquisition against the value of the products that that acquisition generates in their first sale, you’ll (depending on your average order value) almost always lose. That’s because marketing and advertising expenses are always front-loaded. Once a customer completes their first experience, it becomes a deeply symbiotic relationship between the promises marketing makes and the experience operations deliver. Done right, the latter amplifies the former, driving advocacy and dramatically lowering the cost of customer acquisition and retention. Done wrong, it can have the same effect in reverse, dramatically raising the cost of marketing.
Measurement Strategy Tips
- Define each touchpoint in your funnel and find creative ways of measuring
- Work in averages that help to mitigate statistical outliers
- Avoid ‘vanity metrics’ that don’t point to a business outcome without context
- Understand what outside factors could have played a role in your outcomes
- When you see ongoing correlations outreach activities and outcomes, build on them
How Can Hospitality Brands Get Marketing Help
Depending on the size and scope of your brand, there are a couple options for building your marketing program: Small single-unit operators often learn as they go or pay an existing employee a small stipend to manage inbound traffic. High volume and multi-unit operations tend to pool resources to afford a dedicated part- or full-time resource who can manage a larger hub-and-spoke program with a mix of in-house and outside resources. Larger chain and national hospitality brands tend to have a core internal team and leverage an ongoing agency-of-record relationship in which the brand can reach out for targeted support with special objectives. No matter their size and because the hospitality industry can be so susceptible to volatile market conditions, brands tend to keep their footprint low.
Aspiring marketing professionals can usually be found locally through Craig’s List, Poached, and others industry sites. You may have someone already in house that’s interested in taking on these responsibilities for you on a long term basis as well. More experienced marketing professionals and marketing leaders can be found through Monster or referral spaces like LinkedIn or even Tik-Tok. If you’re looking for an integrated marketing agency partner built to scale with you, Front of House can help. We work with emerging brands from high volume single unit chains to enterprise level global brands delivering strategic, creative, technical, and marketing operations expertise at scale.
