Digital Marketing 101

From direct mailings to e-mails, phone calls to mobile apps, pamphlets to web pages, the world has obviously gone digital. And for marketers, it’s a reality they’ve had to embrace and encourage. Maybe your company has a nice website, but are you maximizing on all the potential digital marketing holds? CEM talked to The Rainmaker Group and Cendyn to find out just how important digital marketing is—and what you need to be doing to stay ahead of the curve.

Digital What?
First, a beginner’s definition of digital marketing. According to Cendyn President Charles Deyo, digital marketing is anything that’s online, or uses the Internet. “It takes on a lot of different forms,” he explains. “Digital marketing can be anything that is a tactical initiative deployed in the online space. That can be anything from an e-mail campaign to a website, Facebook page, Twitter campaign, to display advertising—it really runs the gamut of anything in the online space.”

The reason you should care is because your customers do. “These days, the behavior of the consumer has changed radically with the presence of online marketing initiatives,” Deyo says. “If you’re not in the digital marketing world, you’re absent from a lot of opportunities to convert prospects into buyers. In this day and age, you cannot be without a digital marketing presence.”

Benefits
No doubt, there are many benefits to being online. Most important is that with the Internet comes better metrics. These will boost your understanding of which initiatives are resonating with consumers and which aren’t. For example, if someone does an availability check on your property, you now know that they have an interest. They may not have converted, or booked, but that potential is there. And with some well-thought out marketing initiatives, they are an important potential customer.

Tammy Farley, principal at The Rainmaker Group, says the biggest change with digital marketing is a higher level of targeted interaction with customers. Say you notice a slow period is coming up and you want to increase bookings. Rather than posting a discounted rate on Travelocity or Expedia, you can instead send out an e-mail blast ad and target a very discreet group of customers—without the whole world getting that offer. “I think targeted e-mail promotions are a much more effective rifle bullet approach than a shotgun blast. This type of promotion distributed to a select group can result in rooms filled with the most valuable guest segment,” she comments.

Deyo also boasts the ability to track and provide a more tailored solution for finding customers that meet the behaviors you’re looking for. “Conventional marketing techniques are more complementary to what we’re doing in the online space,” he says. “An integrated campaign, meaning a direct mail piece followed up with an e-mail campaign integrated with display advertising, will actually get 30 to 40 percent more lift than if we had done just any one of those channels independently, so we use this strategy to drive a better return on investment.”

Attribution and the Three Buckets
“One big shift in strategy is the ability to quantify what we’re doing, which allows us to better understand what tactical initiatives we should use,” Deyo says. “The other thing we’re tracking more effectively is what we call ‘attribution.’ ”

“Attribution” means all the factors that lead up to the desired customer response, be it booking a room or playing the slots—i.e., ultimately spending money at your property. “If we understand all the attribution points, or the touch points that go into someone actually converting, it can be very powerful in how we build campaigns and strategies,” Deyo explains.
He also explains that, as marketers, Cendyn likes to look at those touch points as three buckets—the starter touch point, the influence touch point, and the closer touch point. “As an example, I might have a social media campaign to introduce the idea of going to a specific property (starter touch point), but it doesn’t mean they went from a social media page and actually booked a room,” he notes. “They started the process there, then might have seen a display ad on a site they were on, so that influenced their consideration and their intent to purchase. Then later maybe they did a search or came back to the hotel site and actually booked. We have all three of those touch points in that example that contributed to the attribution of the conversion. That’s the level of sophistication we have now that we’ve never had in the past.”

Social Media and Mobile Marketing
The newest trend on the block for digital marketers is social media. Many major companies these days have a Twitter account, a Facebook page and/or a LinkedIn group. And if you don’t, you are missing out on a very important and powerful medium. “Facebook has more hits and impressions than Google,” Deyo explains. “When you see stats like that, you understand the power of social media.”

But, as Farley states, “Mobile has the potential to re-revolutionize the way companies are marketing.”

Deyo definitely agrees, and shares some stats to back it up: 1 in 4 homes does not have a landline telephone while more than 90 percent of the U.S. population has a mobile device. “These days, all mobile devices in most cases have the ability to access the Internet,” he adds. “When you start looking at things like social media, which is more of an interactive element of the Internet, and you start bringing that into the mobile/PDA world, that’s a major shift in what we’re going to see going forward.”

Just think, a customer with a Facebook account may check the website once a day. But when he gets a mobile phone enabled with Internet, he begins checking his page several times a day—meaning that you have the ability to reach that same customer several more times in that day, too.

But Farley advises to not jump on the mobile bandwagon without doing your homework. “I think it is one of those things everybody feels like we have to be doing right now because we can’t miss the opportunity,” she comments. “It is essential you execute your mobile strategy intelligently.”

What Farley has seen many of her clients do are basic things on the hotel side, such as check-in and check-out and the ability to book a room on a mobile device. A more sophisticated option is the ability to notice if you have more supply than demand on any given night, and then give a select customer already on property an offer to stay one more night before they leave. “You’ve got this ability now to target locationally in a way you never could before, and this fills rooms,” she says.

One more thing you can’t forget is to make sure your website or app is mobile phone-friendly across all platforms. You don’t want only your customers with an iPhone to get an offer. You want those with Blackberrys, Androids and other smartphones getting offers, too. And will your Internet solution look correct on a mobile device? “Operators need to have applications and plug-ins that work through a specific PDA that deliver give that rich functionality guests value,” Deyo notes. “In the event they do not download your application, you need to make sure your website and other digital marketing channels look correct, and the functionality has to work on the PDA.”

Common Mistakes
With all the potential that digital marketing holds, and considering its relatively short existence, there’s bound to be some missteps. Farley says: “The worst mistake I think you can make is to stimulate demand, have a customer call to book a room and then find out that you’re full. Often, a lack of interaction organizationally between departments can result in a lack of awareness of when the marketing faucet should be turned on or off. In the past, the measure of how well marketing did its job was based on how much mail they sent out—and not necessarily what impact it had.”

For Deyo, the biggest mistake that hotels and agencies make is in attribution. “It’s a new concept for many marketers,” he says. “Attribution has been difficult to track in the past. If you count every touch point that a potential customer has made through this conversion process, it can be hundreds of millions of records that must be processed.”

He says that 87 percent to 90 percent of all agencies and marketers use last-click metrics. “If you think about our ability to fine tune an integrated strategy and optimize as effectively as possible for conversion, you must consider more than last-click metrics,” he notes. “I have to look at all the touch points that added value and attributed to the conversion process. Not considering these attribution factors is one of the biggest mistakes in digital marketing today.”

Best Practices
What are some of the best things you can be doing as a digital marketer?

“I think it is vitally important to understand the value of 1-to-1 marketing,” Farley says. “Don’t send me an offer that might be good for my neighbor but not for me. Send me something that’s extremely relevant to me based on my own buy preferences.” It all comes down to knowing your customers and marketing specifically to each customer’s preferences.
Deyo advises to make sure you have as much visibility as possible and always try to increase it. “We refer to it as eye-share,” he says. “Ultimately, if I’m analyzing the data and making adjustments in my strategy, I am constantly getting new data because of those adjustments. This continuous improvement cycle will increase ROI over time.”

But when it comes to keeping new customers through digital marketing, it’s all about experience. Farley notes: “Particularly in the big gaming markets like Atlantic City and Las Vegas, you’ve got to figure out how you keep new customers interested in your property. You have to put things on property to attract that customer and then market them well. One way is to send reserved guests a series of very relevant, targeted messages in advance of their stay telling them all there is to do on property during their stay. It’s sort of a virtual concierge function. Then, you must deliver to meet their expectations.”

Loyalty Programs
One of the best ways to get information about your most valuable customers is with loyalty programs. A loyalty card, when used correctly, gives an operator targeted insight into guests’ preferences and buying behaviors, so when that customer returns, the property can provide offers for their specific preferences. “From the guests’ perspective, there needs to be value to them from using a loyalty program,” Farley comments.

The concept of forecasting is something Rainmaker truly believes in—and works to help marketers understand. “The data that comes as a result of these loyalty programs is pivotal to the effectiveness of systems like ours,” she says. “In the past, hotels forecasted by broad market segments—business, leisure, group and convention. The ability to break those market segments down into more granular bucket is facilitated by loyalty programs.

“We can say on any given Friday night at a busy Las Vegas Strip property, there might be 50 people who have value of $1,000 and above, and there might be 100 people with value from $50 to $100. We know this based on past performance, so we can create a forecast that says here is what your demand is, not by broad brush segments, but by very specific value segments. We can now keep availability open for the most valuable guests on any given night. What we also do is look how far out specific guest segments book, and it’s pretty intuitive. We give our clients visibility far enough out make trade-off decisions about what value range of customers are coming and who to save space for.”

Success!
Rainmaker witnessed several success stories from companies benefiting from employing forecasting. One in particular is Harrah’s and the success of revenue management, attributed to the Total Rewards program. “They have such great data about their customers and in such big numbers that it’s easy to make accurate forecasts,” Farley says.

Another is Boyd Gaming. In the past, Boyd found itself comping many room nights with no associated play. Today, with better forecasting, it is able to reduce no-play comps. The other thing Boyd saw was the amount of revenue from its cash-customer business went up. Farley says, “Intuitively, a gaming company believes that no matter what, a gaming customer is better than a cash customer. That’s becoming less and less a reality. You can spend as much in the spa as you can on the slot floor.”

And if you need a helping hand getting started on your own digital marketing practices, the folks at The Rainmaker Group and Cendyn will be happy to assist.

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