Shift Into High Gear: Create A Red Flag Marketing Plan

In the midst of a global economic crisis, a dramatic decline in the U.S. lodging industry, the loss of 5.1 million jobs since January 2008 and the swine flu scare it’s no wonder that hotel owner confidence continues to weaken.

In these difficult times the first, foremost and paramount task is to do more business. How is this to be accomplished? My many years of hotel marketing experience reveal at least three techniques that are effective in a down market:

  1. Create a Red Flag Marketing Plan (for full-service hotels)

  2. Institute a Targeted Canvass Program (for all hotels)

  3. Turn Gray Into Gold (for all hotels)

Creating a Red Flag Marketing Plan (RFMP) involves the following elements:

  • Mission Statement which focuses on the current dire circumstances:

    Our situation is precarious. The traditional sources of our business have been shrinking precipitously. In order to stay alive, we are committing to year-round, streetwise, intensive direct marketing efforts. We will track down every lead and empower our sales professionals to do whatever it takes to book the business. We will invigorate our guest relations effort by trying harder to provide super friendliness, super service, super promotion and super food. We will work harder than the competition and send every guest on their way so pleased that they become an ancillary sales force.

  • Identify the slowest periods of the year and focus the most vigorous attention on the special characteristics of these trough periods. Each period needs a mini-RFMP to identify the actions necessary to drive business to each period. Assign your best sales manager to this formidable task with a performance-based super incentive program.

    • Attract and hold productive sales managers with the following tactics:

    • Create and implement a new performance-based sales quota incentive program to attract and motivate a “killer” sales force. Once a year, reward the most successful sales manager with a free one-year leased automobile.

    • Institute a new training program for all sales managers. Use professional outside trainers and inside mentors to improve selling and closing skills.

    • Hire as many qualified sales managers as it takes to reach the occupancy and average daily rate necessary for a profitable operation.

    • Provide sales quotas and performance-driven incentive payments.

  • Commence an immediate and intensive direct selling effort in the SMERF market categories: sports, military, educational, religious, fraternal. Learn as much as you can about the special needs of these groups and make special efforts to meet those needs. Of course, assign one of your well-trained and highly motivated sales managers to this market.

SMERFs are fickle customers and are easily lured away by competitors’ discounts when not pleased with hotel performance. To attract SMERF business, it’s important to know the needs of these groups:

Fraternal and service groups:

  • High percentage of spouses and children; attendees pay their own expenses. Attendees often combine vacations with convention attendance.
  • Want nearby sightseeing and recreational activities.
  • No group meals; only special deals with no guarantee on the number of meals sold.
  • Meetings are built around large general sessions that attract prominent speakers.

Educator organizations:

  • Meetings are held when school isn’t in session. Meetings are emphasized, with few social functions.
  • Heavy use of breakout rooms. Some groups are very large.

Military/Government organizations:

  • Expenses paid by the U.S. government (not every state allows tax exempt status for these meetings).
  • Groups insist on special rates, and typically have a maximum per diems. There is some double occupancy.
  • Require meeting rooms on a 24-hour basis.
  • Often use purchase orders and social programs are low budget.

Ethnic organizations:

  • Needs are similar to fraternal associations.
  • Attendees pay own expenses and there’s a high percentage of multiple occupancy.
  • Social programs are elaborate.

Religious organizations:

  • There are two categories: vocation and avocation. Conventions can cover a wide range of special interests.
  • Site selections vary according to specific needs of the interest group.
  • Conservative denominations tend to need fewer and larger meeting halls; liberal denominations may require a variety of breakout rooms.

Initiate an Ambassadors Program for your hotel. The intent of this program is to expand the sales force by using volunteers and part-time sales employees who have the special attributes and abilities needed to help increase market share. These randomly-located ambassadors supplement but do not replace full time personnel. The ambassador program utilizes retired sales executives and Ruppies (retired urban people) who may live elsewhere to promote business for your hotel. In exchange for their efforts these “ambassadors” will be entitled to room credits, restaurant vouchers and other amenities and benefits at the hotel.

The primary efforts of the ambassadors will be to call on travel agents, meeting planners and corporate travel planners who your regular sales force never contact. They will distribute promotional materials and sales literature to the above agents and urge them to make reservations. They will provide the various prospects with a code number or other identification as supplied by the hotel so that the ambassadors can be credited with business they’re been able to send to the hotel.

An ambassadors program can work for a large hotel or resort and for a chain of hotels. The more physically widespread the ambassadors are, the more likely that new business can be developed outside your normal trading areas. Just imagine: on any given weekday, you could have a dozen ambassadors in various parts of the country selling to travel agents, meeting planners and corporate representatives.

My article “Shift Into High Gear: Implement a Targeted Canvass Program” (an RFMP for smaller hotels) will be posted next month.

Stanley Turkel, MHS, ISHC operates his hotel consulting office as a sole practitioner specializing in franchising issues, asset management and litigation support services. Turkel’s clients are hotel owners and franchisees, investors and lending institutions. Turkel serves on the Board of Advisors and lectures at the NYU Tisch Center for Hospitality, Tourism and Sports Management. He is a member of the prestigious International Society of Hospitality Consultants. His provocative articles on various hotels subjects have been published in the Cornell Quarterly, Lodging Hospitality, Hotel Interactive, Hotel-Online, AAHOA Lodging Business, etc. Don’t hesitate to call 917-628-8549 or email [email protected].

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