The formula for success is simple. Find and acquire customers. Get them to send inquiries and win as many of these deals as possible. Finally, track the production from each customer to ensure that they deliver what they have promised. These are the four Critical Success Factors (CSFs) in which results are vital to the hotel’s success.
Assess the current status
Start by assessing where you are now. How many customers do you have? How many inquiries do you get? How many do you win? How much are all customers buying? Next, analyze where you have the highest potential to take action to increase the revenue. For example, if you have many customers and receive many inquiries but have a low win rate and a low customer production, you need to analyze why the win rate is low. If everything looks good, you should calculate the potential impact for each of the four areas. How much is the potential revenue impact of increasing the number of customers, inquiries, win rate, or production rate? Focus on actions with the most significant impact.
Formulas to calculate the impact
Depending on your current status, you need to calculate the potential impact of improving the KPIs for the four critical success factors. You will also understand how much resources you can allocate to improve the KPI. You still need a reasonable return on your investment. Based on the figures above, you will calculate the impact of a change in the four critical success factors. Here are some formulas to measure the revenue impact.
- One additional customer: Average contract value * realization rate
- Another won inquiry: Average inquiry value * win rate
- One extra win rate percentage point: 1 % of the estimated value of all inquiries
- One additional realization rate percentage point: 1 % of the estimated value of all contracts
Set and track targets
The final step is to set targets for each of the KPIs and allocate resources to ensure that you achieve the goal. Then, once you have communicated where the hotel stands now and where you want it to be in the future, it is time to start the execution and continuously track the progress towards the goals, so you can take corrective action before it is too late.
Now, you want to speed up the process to reach the goal faster. The only way to do this is to provide the sales team with easy-to-use systems and tools to make them more productive.
Download the whitepaper
The whitepaper contains more information about the four KPIs, the formulas to calculate the impact, and practical templates where you can calculate the effect for your hotel.