Deadly Sins of Email Marketing for Luxury Hotels.
By Madigan Pratt
Sunday, 17th May 2009
When email first bounded onto the scene marketers called it the 'killer app', email would revolutionize marketing, allow luxury hotels to economically reach out and touch each customer and prospect, create a dialogue, build relationships and ultimately provide a steady stream of loyal guests immune from competitive pressure. 

It would level the playing field allowing smaller independent hotels to effectively compete with the Goliath chain hotels.

Unfortunately far too many small luxury hotels have never seen email marketing live up to its true potential.  Failing to effectively tap into the full power of email has all too often meant it is relegated to "just another way" to try to fill last minute rooms. 

Small luxury properties are renown for providing superior, personalized experience while the guest is in-house. They should extend that same personal experience in their email marketing program to enhance loyalty and develop a strong competitive advantage. Hotels can close the loop and use email to achieve superior service delivery before , during and after a guest's stay. 

As a marketing company specializing in luxury hotels we monitor far more hotel email newsletters than we care to admit.  Some are very good however the majority suffer from one or more of the 7 deadly sins described below.  In an effort to understand why email marketing has failed to live up to its initial potential we analyzed competitive newsletters to identify where some hoteliers are falling short.

We present the findings as The Seven Deadly Sins of Email Marketing for Luxury Hotels – sins that undermine the effectiveness of email and reduce revenue.   Sins that can easily be avoided.

1. Too Much Emphasis on Sales – Sounds strange doesn't it?  But the truth is far too much emphasis is being placed on generating sales, particularly immediate sales - in most hotel email campaigns.

Sure, the ultimate goal of any email marketing program is to generate sales.  The problem (or sin) comes in the approach.  A significant number of hotel emails we see are nothing more than "electronic mass mail."  They contain little more than packages, prices and copy designed to get recipients to "book now".  Maybe one step up from what you would expect from a used car salesperson.

Let's be honest here.  Too many hotel electronic junk email campaigns are little more than one step up from spam.  While the emails may look good, are well art directed with lovely photos they are all about the product (or more accurately about the price) and not about the customer experience. 

Psychologist Robert B. Cialdini in his book Influence: The Psychology of Persuasion, points out that "We prefer to say yes to the requests of someone we know and like."  It's simple - people like to buy from people they like.  It's salesmanship 101.

If a hotel's emails are beautifully presented but contain little relevant information, how can it reasonably expect subscribers to like them?  It just isn't going to happen.  Open rates will continue to decline as will the effectiveness and ROI of the program.

In the long run a luxury hotel will be more effective in "selling" if people look forward to receiving information filled emails, if you have used the medium to build a rapport with a prospect and deepen a relationship.  Provide them with relevant and interesting information about your hotel, your destination, your staff.  Entertain them and of course, include some specials.

Have them look forward to your communications; have them like you and you will find that sales will come much easier.  Caution: this will require taking a long-term view of email – check your short-term immediate sales hopes at the door.

2. Poor Web Sign-Up Form – Email is a great way to efficiently interact with prospective guests.  Sign up for a competitor's newsletter and you're likely to find the only information they ask for is your email address.  It is a sure sign they are really not interested in you as a person – only a warm body they can send their electronic missives to.  That may be a little harsh, but not far from the truth.  They are looking to blast untargeted, impersonal emails to any clueless soul willing to share their address.

There is no way a hotel with such limited information will ever be able to address you as an individual or send you a special offer that might be relevant to you.  If you live in Phoenix how interested will you be in hearing a special Winter Thaw package that will help you escape the cold?  Wouldn't you question the hotel's understanding of you?  Wouldn't you think they really didn't care one iota about you?  I would too.

If you receive a couple of email messages containing little or no relevance to you will you open the next?  Probably not.  There go open rates, click-through rates, subscribers and sales.

When asking subscribers for personal information – only ask for information you plan to use in future marketing programs.

3. Poor Registration Data Capture – The most important marketing information a hotel can collect is the names, addresses and email addresses of its guests.   I am continually amazed at how poorly hotel registration cards are filled out, checked and input correctly into the PMS.

There is a direct relationship between the success of a luxury hotel and the quality of its customer database.  The reason is simple – research has shown it costs 8 – 10 times more to attract a new customer than retain an existing one. 

Take two similar 100-room hotels. If Hotel "A" has accurately captured 80% of its guests' email addresses and Hotel B only has 30% - which one do you think is the most successful one?  At a 30% capture rate I don't think Hotel B is at all serious about using email marketing. 

Hotels need to sit down and actually calculate the lifetime value of each guest.  From there it is easy to determine the long term financial impact of losing contact with each one.  Do the math and you'll find the cost of beefing up reservations and ensuring accurate data capture on each guest in miniscule compared to the potential loss of future revenue.

4. Not Using a Double Opt-In Subscription Form – Using a double opt-in subscription process is today's email best practice, but less than half the hotel newsletters we subscribe to actually use it.  This is where anyone signing up to receive your emails is sent a confirmation email that must be responded to in order to complete registration.

When a hotel moves to a double opt-in it is going to lose some potential subscribers in the process and that's frustrating. Not everyone will click on the confirming email to insure subscription. It is possible the confirmation was caught in a spam filter or the original email address they supplied was typed incorrectly.  Who knows.  But the truth is you are far better off with a double opt-in email list.

We recently moved a hotel from a single opt-in to a double opt-in subscription process.  It had an extensive database developed over five years that was averaging a 25% open rate.  The hotel lost over 50% of its subscribers in the move.  However, the first email newsletter sent after the move achieved a 65% open rate.  What was sacrificed in quantity was more than compensated for in the quality of its database.  Moving forward the double opt-in process will help the hotel maintain a much higher quality list of guests and prospects.

There is an added benefit of the double opt-in process – less spam reports.  Today ISP's like Yahoo!, Hotmail, AOL and Google are making it easier for people to report email senders as spammers.  And many recipients find it easier to report senders as spammers than simply unsubscribe.  If too many subscribers report you as a spammer there's a good chance the ISP will block all your future messages.

What would happen to your email program if you were blocked from sending messages to all people with an AOL address? 

5. Using an Ad Agency to Run Your Email Program – Email is or at least can be one of the most effective direct marketing tools a hotel has at its disposal.  Our analysis found most email campaigns are launched by individuals not well versed in the direct marketing discipline.

Direct marketing is to advertising as engineering is to literature - one is a science and the other is an art.  Ad agencies typically don't like to be measured – direct marketers revel in the numbers – always looking for clues that will lead to better open rates and greater sales.

Direct marketers talk to people on a 1-to-1 basis, offering information that is interesting and relevant and asking for some sort of a response.  Advertising is usually more generic, talking to the masses and not delivering an individual message.

Dale Carnegie is quoted as saying, "You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you".  Good direct marketers and 1-to-1 marketing can make it seem as though the hotel knows and is interested in the readers.

Email is direct marketing.  Find a good direct marketer to run your program and you should see a dramatic improvement in performance.

6. Accepting an "Email Blast" Mentality – You don't have to analyze email newsletters to know there is a pervasive "email blast" mentality in the hospitality industry. 

Have you ever heard someone in marketing (or perhaps management) say, "Let's send out an email blast!"?  "Bookings are down – send out a blast."  "We won an award – send out a blast."  "We're expanding the pool – send out a blast." To realize the full benefit of email you have to Ban the Blast mentality at your hotel.

Email is a marvelous 1-to-1 marketing tool.  It can deliver effectively, but not if your hotel thinks of it as a tool to "blast" your audience.  When you hear email blast it is a sign an organization has fallen into a mass market mentality. (FYI – advertising is generally mass market oriented.) Email blasts are the epitome of lazy marketing – they are the antithesis of the highly targeted, relationship-building communications that thoughtful email marketing can deliver.

Email programs consumed by a blast mentality are oftentimes overly product oriented.  Content focuses on the hotel rather than entertaining readers with interesting stories about how they benefit by staying there.  Guests want to be entertained, not sold.  Providing entertainment that readers find relevant is a surefire way to increase open rates.  Entertaining is engaging and can be a very effective lead-in to sales.

7. Failing to Personalize and Segment Your Message –  It is amazing how many hotels fail to personalize their emails – whether it's a newsletter or an e-post card. 

"If you want to win friends, make it a point to remember them. If you remember my name, you pay me a subtle compliment; you indicate that I have made an impression on you. Remember my name and you add to my feeling of importance."  - Dale Carnegie

A little more than half the emails we analyzed were personalized with the subscriber's name.  If you believe Mr. Carnegie, then quite a few hotels are losing a good opportunity to connect with their subscribers and make them feel important. 

And if the subscriber feels the hotel doesn't think they are important, how likely do you think the subscriber will be to book a stay?  If you believe psychologist Robert B. Cialdini (see sin #1) the answer is "not very."

Simple segmentation between customers and prospects is possible if your data capture form is well thought out.  Why send out generic messages when you can easily personalize newsletters based on each subscriber's relationship with you?

If you were a past guest of a particular hotel wouldn't you appreciate it if they recognized and addressed you as a past guest?  Sure you would.  Wouldn't you feel as though you had more of a relationship with the hotel and weren't some faceless email address?  Sure you would.

The same goes for the prospective guest.  Personalizing communications and offering them reasons why they should experience your property for the first time using whatever information they have given you.  They will appreciate it and be more inclined to respond to one of your sales pitches. 

Email still has the potential to be the "killer app" and be one of the most effective marketing tools a small, independent luxury hotel can have.  Used as an extension of your resort experience and personality it can build and deepen relationships with prospects and customers and make them more willing to visit.  It can level the playing field and allow small luxury properties to better compete with larger more fully funded competitors.

You will see email achieve its full potential increasing loyalty and revenue if you make a concerted effort and avoid The Seven Deadly Sins of Email Marketing for Luxury Hotels.  Start today.

Madigan Pratt is managing director of Madigan Pratt & Associates, Inc., an award-winning customer relationship marketing communications firm specializing in helping independent luxury hotels acquire and retain profitable customers, maximize revenue and ROI.  A well published author and popular conference speaker, Mr. Pratt has been a senior member of the Board of Directors of the Caribbean Tourism Organization (CTO-Executive Committee), Association of Travel Marketing Executives (ATME-Chairman) and the Travel & Tourism Research Association/New York (TTRA/NY-Chairman).

MP&A offers a full range of integrated marketing services including advertising, direct marketing, public relations, database management and a full complement of Internet marketing services.  Its principals have held senior management positions at several of the world's largest advertising and direct marketing organizations. Founded in 1989, the firm has an established track record of helping hotels prosper.

Mr. Pratt can be reached at: Madigan (@) MadiganPratt.com.  More information can be found at www.MadiganPratt.com
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