Uploaded byAbsolutdata Analytics
When Less Is More: Focusing on the Persuadable Guest
The document discusses strategies for effectively marketing to persuadable guests in the hospitality industry, drawing lessons from Obama's 2012 campaign. It emphasizes the importance of not over-targeting and identifying persuadable customers to enhance promotional effectiveness. A three-phased approach is proposed, which includes understanding the persuadable audience, designing tailored offers, and implementing market tests, resulting in significant cost savings and increased revenue.
More Related Content
Similar to When Less Is More: Focusing on the Persuadable Guest
More from Absolutdata Analytics
When Less Is More: Focusing on the Persuadable Guest
- 1. When Less isMore: Focusing on the Persuadable Guest #org#chrs14 Anil Kaul Chief Executive Officer, AbsolutData @anil_kaul Guha Athreya Associate Director, Hospitality Solutions, AbsolutData @GuhaAthreya @Absolutdata #persuadable
- 2. What can welearn from the success of Obama’s 2012 Presidential Campaign? 2
- 3. Fact 1: Marketing@hotels is about….Offers, Deals & Discounts… 3
- 4. …this is alsotrue for other sectors of Travel & Hospitality… 4
- 5. Fact 2: Offersare rich and cost intensive 10% Discount for AAA Members 1 Double Points next Quarter 2 4th Night Free at Select Resorts 3 Free Room Upgrade 4 15% Discount Advance Purchase 5 Military Discount 6 Breakfast Included 7 $150 On-board Credit 8 $90 Discount on Suites 9 AARP Member Discount 10 5
- 6. 4th night free!!! (with3 paid nights) The Success of a Campaign is determined by Precision in Targeting Is this a good promotion? Benefit: • Lift in Response Rate = 13%-10% = 3% • Incremental Stays = 3% of 100k = 3k • Incremental Nights = 3k x 3 Nights = 9k Cost: • Non Incremental Stays = 13k-3k=10k • Free Nights = 10k x 1 Night = 10k Net Benefit is -1k Nights Now consider the economics 6 Test 100 k 13 k 13% Response Targeted 10 k 1 k 10% Response Hold Out Control
- 7. Over targeting hasmultiple disadvantages… Loss of Revenue Triggers Shopping Behavior Trains Loyal Customers to wait for Offers and Discounts Dilutes the Offers Increases Marketing Costs 7
- 8. What can welearn from the success of Obama’s 2012 Presidential Campaign? 8 1. Don’t Over Target 2. 3.
- 9. 9 Why do MarketersOver Target? WHY
- 10. Responsiveness NumberofProspects Unresponsive Responsive Negative ROILow-Med ROI High ROI Today, most marketers know who will respond to a given offer. That helps, but only to a point… 10
- 11. Responsiveness NumberofProspects Negative ROI Low-MedROI High ROI Unresponsive Responsive Persuadable Sure Fire Marketers can gain significantly by focusing on the Persuadable Guests and excluding the Sure Fires. 9
- 12. What can welearn from the success of Obama’s 2012 Presidential Campaign? 12 1. Don’t Over Target 2. Identify who is Persuadable 3.
- 13. 13 So, how dowe identify Persuadable Guests? How
- 14. To identify thePersuadable Guest, we must first understand the difference between Persuadable and Responsive Responsive Guest Buys when given an offer Buys when given an offer Buys when given an offerPersuadable Guest Buys Only when given an offer 11
- 15. There are ProvenAnalytical Methodologies to predict influence and identify Persuadable Guests – e.g. Uplift Modeling • PR(Offer) is high • Where PR is the Probability of Response Responsive Guest Buys when given an offer Buys when given an offer Buys when given an offerPersuadable Guest Buys Only when given an offer • PR(Offer) >> PR(No_Offer) 15
- 16. 16 This is notjust a targeting solution… What promotions worked in the past? 1 How can we make it better?2 Who should we target?3 Who can we persuade? 1 Where can we find them?2 What should we offer them?3 Old Backward Looking Process New Forward Looking Process Understanding the Persuadable Guest can completely turn around the way Promotions are Developed and Executed
- 17. What can welearn from the success of Obama’s 2012 Presidential Campaign? 17 1. Don’t Over Target 2. Identify who is Persuadable 3. Design your campaign around the Persuadable
- 18. Across many industries,the most successful campaigns have focused on Persuadable Customers 18
- 19. 3 Phased Approach Asuccess story in Hospitality 19 Phase 1: Identifying & Understanding the Persuadable Guests (for 1 Promotion) Phase 2: Designing offers and touch points around the Persuadable Guests Phase 3: Limited in-market tests followed by full scale roll out
- 20. Impact on OnePromotion in One Quarter A success story in Hospitality Saved $2MM by not targeting the Sure Fires Used a small part of the savings to give richer offers to the Persuadable Guests Generated an additional $4MM in incremental revenue with no increase in budgets 20
- 21.