13 Jun [BLOG IDISO] The Battle for Direct Sales
On a daily basis, we receive tips promoting “the secret” to improve direct sales. The message we get across the board are responsive websites, attractive images, price parity, bots usage and metasearch.
Are those really the key factors to improve direct sales?
Direct sales isn´t limited exclusively to the brand.com channel. The voice channel also has a big impact and corporate agreements are also relevant, especially if you are an urban property. Based on our observations, combined voice and corporate agreements should represent 40% of hotel reservations. As Brand.com website should represent 25%-30% of all reservations, expect your direct business to be between 65%-70%.
Are you there yet? Here is how we believe you can accomplish it:
- Direct team specialist. They will be your special ops team with the ownership to increase your direct sales. Look for people with excellent negotiation skills, pricing experience and a marketing orientation. They will create a direct sales mentality inside your organization, restructure your direct sales channels following this mentality and implement a set of strategies to meet your goals.
- Use metrics. Recently, our partners from Triptease suggest using the DiBPAR (Direct Revenue Per Available room). What is crucial is not the metric you choose, but that you realize the importance of tracking and measuring performance. You will discover where you are, the effort you will need to get where you want to go and the extra mile necessary to outcome your objective.
- Last room availability is the power of rewarding your direct customers. They should know if they need a room you will have one for them. Allocate a daily allotment to LRA usage, be confident and don’t sell these rooms on your distribution partners, even if they ask…because they will.
- Best Rate Guarantee. You should give your best deal to your direct customers and they shouldn’t find it anywhere else. The era of price parity is over as we have moved to operate on an open market where we can freely apply our pricing strategies. Keep in mind that your direct sales have the lowest costs.
- Upsell across your organization. Every reservation, call or check-in is an opportunity to upsell and to provide excellent service to your customers. You should try to upsell all your guests and reward your reception/reservation agents performance. Ideally, an upselling policy will contribute 5%-10% to your direct sales revenue.
- Loyalty is the outcome of a set of well implemented actions. Although loyalty should come “naturally”, maintaining it requires effort. A Client Relationship Management (CRM) approach will be needed to reach a deep understanding of guests’ needs. The goal will be to move the customer from intermediated to direct distribution channels.
- Review your distribution partners. The time is now to choose the distribution partners you want to keep working with and sit down and renegotiate conditions. You should try to reduce your distribution partners and keep the ones that really matter, work to abandon price parity policies and not enroll in programs such as Booking’s Genius, which give an advantage to distribution partners over your direct channels.
Conclusion: You should look to all your sources from your direct sales, as they should be the driver of your hotel business. Create or improve your team of direct sales specialists, choose your best people and keep them motivated. They will defend your business and the outcome will be a reduced dependence on intermediaries, a cost reduction and a revenue increase.