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Why teamwork is better than silos

12 July 2022
When the commercial team has started to think from the guest and customer perspective, the commercial team needs the right insights, knowledge, and skills for each stage in the guest funnel. The commercial team consists of individuals with different skill sets, not an extensive department keeping skills in marketing, sales, and revenue silos.
The primary responsibility of the commercial leader is to maximize revenue or, more precisely, the contribution to profit and costs. A commercial team with diverse skills will make the hotel more successful since the guest funnel needs expertise from all commercial disciplines in every stage of the guest funnel. So let's take a deeper look at what knowledge each of the steps involves.

Analyze demand

Traditionally, analyzing demand has been a task for the revenue manager and involved collecting and analyzing historical data and looking into the future to populate a demand calendar with seasons, events, and travel patterns. Studying customer behavior has been a task for marketing to understand better what and how to communicate with potential guests and customers. Salespeople have always had first-hand information about customers' purchase intentions. Every role sits on a vital part of the information, and the hotel will only realize the total value when the knowledge is combined. The commercial team needs a complete overview of the demand and therefore needs all this information in one place easily accessible for all team members.
Guest funnel

Focus on 3-5 segments

Hotels can divide every market into segments. The reason is that it is easier to handle a portion of the market at the time than the whole market. Unfortunately, most hotels ignore the potential to increase profits by segmenting the market and do not have the knowledge to create the segments that have the best fit for what the hotel can offer. It is a misconception that hotels should assign a market segment code in the PMS and then analyze those market segments. This method rarely works since no one asks the guests about which segment they belong to, and reservation agents and front desk staff are not good at guessing. Instead, hotels find market segments by combining many different variables, such as the reason for travel, feeder market, distribution channel, group size, season, etc. By searching and filtering the information in the hotel PMS (and other systems), hotels can easily find the critical market segments for long-term success.
Finding the 3-5 most important market segments is a task for the commercial team. Therefore, the search and filtering process needs input from each commercial team's expert roles to decide which 3-5 segments to focus on.

Find the high spenders

The next step is to find the high spenders within each segment. The hotel wants to acquire as many high spenders as possible, so the team needs to analyze spending per guest to understand better which products and services guests like to buy while staying at the hotel. Traditionally marketers have focused on attracting guests - just any guests and revenue managers have focused on heads in beds and maximizing room revenue. Salespeople have contracted rooms and, to some extent (driven by customer inquiries), food & beverage, and MICE. The new way of working is to maximize the revenue per guest. The team must release its creativity to design offerings that attract the guests in the first place but also ensure additional spending apart from the room. Again, the team has to present the hotel and its offerings in a way that will attract guests and increase their spending.

Get the guests to book

For most hotels, the direct channel is the least expensive way to acquire the guest. Creative ideas from marketing, sales, and revenue management would probably help to get more guests to book direct. However, the hotel will probably only succeed by having a healthy mix of distribution channels to capture the high-spending guests. With input from all team members, the hotel will set up an optimal distribution strategy.

Onboard the guest

The hotel industry never talks about onboarding the guest. This term is only used by software companies when talking about creating happy and long-term customers. Hotels should apply the same thinking. Once the guest has booked a room, hotels should start preparing to deliver the guest experience to maximize guest satisfaction and spending. During this face, marketing has a clear role in crafting the email messages that prepare the guest for the stay and sell additional products and services. Revenue managers can advise on rates for upgrades, and sales can advise on what the B2B customer likely will buy as add-on products and services.

Monitor and learn

No one will get this right the first time. Follow the process, monitor, and learn along the way. Adjust and experiment. Listen to input from all team members and refine the guest funnel process, the offerings to the guests, distribution channels, and the onboarding. Learn together and work as a team instead of hiding in silos and working in opposite directions.