In the fiercely competitive context of the hospitality industry, attracting new customers is not enough – retaining new customers is the key factor for sustainable hotel development. Not only saving costs, loyal customers also bring high economic value and contribute to natural brand promotion. In this article, let’s explore with SEFA Media the importance and 05 effective customer retention strategies in the hotel industry, easy to implement and suitable for current market trends.
The Importance of Customer Retention for Hotels
In the hotel industry, customer retention not only saves costs but also brings long-term value to the business. Here are the reasons why customer retention plays a key role in the sustainable development of hotels.
The cost of retaining customers is cheaper than the cost of attracting new customers
According to a study published in Harvard Business Review, the cost of attracting a new customer can be 5 to 7 times higher than retaining an existing customer. To explain more specifically, to attract customers, businesses need to spend on many marketing activities such as social media, SEO and KOLs.
These costs are called “upfront costs,” meaning that businesses have to pay before customers decide to use the service, and the customer’s return rate is not guaranteed. In addition, because the hotel industry is extremely competitive, it takes a lot of time and effort for businesses to build trust for a transaction.
Loyal customers tend to spend more
Customers who have used a product or service often tend to spend more on subsequent visits, making them more likely to opt for higher-end options. According to a study by Invesp, loyal customers spend 67% more than new customers. This means that the average economic value of a customer to the business (CLV) is higher, providing the business with a sustainable source of revenue.
Loyal customers are free media
This is an intangible benefit. Of course, the prerequisite for this benefit to appear is that the product quality meets or exceeds their expectations. Especially in an era where feedback can be faked, a recommendation from a relative is extremely high quality feedback. This is a form that costs nothing but has a very high potential to attract potential customers.
Facilitate operations
When the hotel has a stable number of guests, forecasting, planning or operational management will become easier. Because the business can grasp the room occupancy rate, peak times of the year, the proportion of services used, etc. Based on that, the hotel can proactively adjust the number of employees, materials for services, operating costs, etc. and limit the risk of wasting the business’s resources.
Build a long-term reputable brand, easily attract new customers
In the hotel industry, reputation and reliability are particularly important factors in making a decision to buy a product/service. A brand that receives high ratings and trust from old customers will create strong trust in new customers, which helps them feel secure when choosing the hotel as their next destination. This is also a factor that creates a strong potential competitive advantage, especially for hotels located in tourist areas with a high density of motels and hotels.
05 Hotel Customer Retention Strategies
Now that we understand the importance of customer retention, the question is: How do we get customers to come back and stay with us for the long term? Here are five practical strategies that hotels can use to enhance the experience, build loyalty, and maintain lasting relationships with customers.
Ensuring service quality exceeds expectations
Product and service quality is the core factor to retain customers. In particular, businesses also need to pay attention to managing customer expectations, because expectations are the starting point of satisfaction. If the service quality is not as advertised, not as the image that customers imagine, they will easily be disappointed and not come back.
Therefore, in addition to maintaining and continuously improving service quality, businesses also need to ensure that customer expectations are aligned with service quality, and improve quality to exceed their expectations.
Send special offers based on their interests
Personalization is a trend that is gradually being widely used in many industries and the hotel industry is no exception. According to a report by Epsilon, 80% of customers tend to repurchase if they receive the right incentives. This could be giving restaurant vouchers or Family room incentives for family guests or giving spa packages to customers who have the habit of vacationing alone.
Give gifts to loyal customers
In addition to incentives, a handwritten card, a lightly named key chain, or a favorite snack chosen by the guest is a way to increase their loyalty to the hotel. A small, personalized gift that evokes emotion is enough to create an emotional connection, making them feel “remembered.”
Demonstrate commitment and care through interactions
Besides product quality, human factors can strongly influence customer emotions and experiences. Meanwhile, emotions are one of the most powerful factors affecting the first steps in the journey to building customer loyalty.
Because of its important role, if the human part can meet beyond the usual expectations, customers can be impressed and feel a deeper connection. It is simply showing warmth and sincerity through very small actions such as calling customers by name when asking, remembering customers’ habits, always ready to listen to customers’ questions or feedback.
Regularly update information for customers
Updating information about tourist attractions or other information related to customers in a timely manner is also a way to show concern for them, even if they are not present at the hotel.
Businesses can provide necessary information when customers are on vacation such as weather reports, news about local roads, suggestions for interesting destinations in the area, etc. However, businesses also need to pay attention to the frequency of appearance, ensuring that it is not too dense and not too sparse, to avoid them feeling uncomfortable or forgetting the brand.
SEFA Media – Leading Marketing Strategy Consulting Unit in the Hotel Industry
With over 7 years of experience in the field of accommodation marketing, SEFA Media has been accompanying hundreds of hotels, resorts, and homestays nationwide to build sustainable brands and increase revenue. We understand that each hotel has its own story and SEFA’s mission is to help that story spread in the right way, to the right people, at the right time.
Not just stopping at promotion, SEFA focuses on actual conversion efficiency, helping hotels become more known, increase booking rates, improve customer experience, and thereby create long-term competitive advantages in the market. SEFA Media – not only a service provider, but also a strategic partner accompanying the sustainable development of your hotel.
Conclude
Customer retention is not only a part of operations, but also the foundation for sustainable development of the hotel business. With a suitable strategy, hotels not only increase revenue but also build brand loyalty and reputation in the market. SEFA Media is a leading agency consulting on marketing strategies for the hotel industry. SEFA Media supports you in planning and implementing important steps to effectively increase customer retention. If you are looking for an in-depth and effective solution to retain customers, contact SEFA Media today for advice on the most suitable strategy for your hotel.
> See more: SEFA Media – Leading unit in Marketing Strategy Consulting for Tourism and Hospitality Industry
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