How to Structure a Deal

 

Everyone's always looking for a great deal -- we imagine you're no exception.  A deal is a useful way to drive traffic to your website and your inn. In fact, even a small deal, timed correctly, can make a big impact. In general, shoulder season marketing can make-or-break your yearly profit margin. This month, Bed & Brunch PR talks with Cindy Bachmann, founder of Innkeeper's Advantageto get some much needed answers on coupons, deals, and complimentary amenities. Her company specializes in custom websites that include an integrated online reservation system, guest management, reports, analytics, and Internet marketing in a single unified service.

What's the appeal behind using coupons for a bed and breakfast?

For many inns, it's not that difficult to fill their property in the summer, but in off-season, a good package deal or several good coupons could mean the difference between having a profitable year and a year that's not as profitable.  Deals and coupons can be effective in driving Web traffic to your site during the shoulder season or off-season.  Or, maybe you want to attract special interest groups, like writers or bird watchers, that will come back year after year. The consuming public has learned to look for deals in wintertime for instance, especially in the cold Northeast. It's a great way to generate additional revenue.

How does one go about creating a deal?

There are some general guidelines I recommend on the do’s and don'ts of offering deals. More seasoned innkeepers have learned these through trial and error.

I advise innkeepers to make sure they can live with the deal they're offering. It has to be a good deal for both -- the innkeeper and for the guest. It's important that innkeepers understand their basic costs and break even point.  If a deal is too good to be true, the inn might get a lot of guests but, make no money.

If the deal requires the innkeeper to do a lot of extra work, they may not have enough staff to do it well. That can result in bad reviews. I steer people toward keeping it easy and simple.

Innkeepers don't necessarily have to offer a discount.  Sometimes they can offer an additional amenity that may not cost that much but offers perceived comfort and convenience to the guest, like a bouquet of flowers or a local delicacy.

Another guideline is to give a reason for offering this deal.  If it is really just a generic discount, a savvy guest is going to ask 'Why don't you just reduce your rate instead of offering a deal?'  Specials are not simply for reducing rates, they boost advertising.  So make it a 'Winter Blues Special' or another timely, catchy, thing. Keep it simple. If there are too many restrictions on a coupon or if it's confusing, it can just frustrate the guest.  If you want to offer a deal only on Monday and Tuesday with check in between 4-5 o'clock and there's no breakfast included, that's a turn off and a lot to muddle through.

Is there a general rule when it comes to the amount of a discount?

If you give a 5% discount, there is not a high chance people are going to be motivated by that, obviously a guest will take any discount, but that's not going to be noticeable. A 10% discount is acceptable, 15% is standard, and 20% is pretty good.  You could also do 'buy a night and get a night free', or 'buy a night and get half off the next night' to increase occupancy rates. It's also important that you make it easy for the guest to book that deal. If they have to call you because your booking software doesn’t support online redemption, some guests will pass. This is especially true nowadays when most people want to do everything online and on-the-go from their mobile phones.

At Innkeeper's Advantage, our software has the ability to create various types of coupons and specials. We have two different product offerings. Our stand-alone booking engine called “Book It now” has all the same coupon functionality and connections to Booking.com, Expedia as our flagship product “Innkeeper's Advantage”.  IA includes website, booking management, analytics, connections to merchant services, etc. and enables the innkeeper to maintain their content, create coupons and do everything themselves. We also offer marketing services for customers who don’t have the time or desire to do it themselves.

What's the secret to a successful deal?

You have to distribute your coupon deal.  Think about supermarkets, they don't just put the coupons on the table by the discounted product; they mail them to consumers because they're trying to generate traffic in the store -- once you're there, you're likely to buy something.  Rather than just putting an offer on your website, use it to bring in Web traffic. A great way to successfully distribute a deal is through a targeted pay-per-click campaign. It also helps to write a blog post, promote your deal using your social media channels, and if the offer is interesting enough, write a press release. Some of the most successful coupon offers I've seen were supplemented by Google AdWords, blogging, and social networking; if you have an email newsletter, that's another good way to promote your coupon.

What else can an innkeeper do to get off-site traffic?

Social coupons like Living Social and Groupon can be great and they can also be not-so-great. On the upside, they generate buzz and are quite popular. Social deal sites do a lot of marketing and have big mailing lists. The downside is that these sites require deep discounts from the inn, they also take a high percentage of generated revenue, so you really end up with very little compared to your regular rate.  If the deal isn't structured properly, you can really lose money on it – and have to and run around like crazy.

Another tactic is creating a loyalty program; although most hotels have been doing loyalty programs successfully for years, this is sort of anew kid of the block for small inns.  Single small inns would have a hard time administering loyalty programs and a single inn can’t offer enough incentives to justify downloading an app. There is; however, a new program called Flok.com. Inns can sign up for a few hundred dollars a year and it will enable you, the innkeeper. to administer a loyalty program. It has an app for your guests to use on their smartphones and it has a beacon so they can see who is offering a loyalty discount near where they are. It's not just for inns. it lists many types of businesses like restaurants so guests are more likely to download the app.  Flok can help attract last minute guests and those looking for deals in advance. One of my inns uses it and so far they like it.

What about sites to shop for promo codes, likeRetailmenot.com?

Distribution is important. Innkeepers can try those kinds of sites if they like. It's really a question of getting your deals distributed the public.

Anything else innkeepers should know?

Pay attention to what's working and what's not and learn from it.  One of the more important things we offer is private analytics. We collect statistics on deals and booking sources like directories,Booking.com and Expedia, to help you determine: 'Do I really need to do a discount or can I get bookings another way?'

Sometimes instead of doing a special, analytics can reveal that you need to lower or raise your rates.

We can compare statistics from previous years on our platform and provide benchmarks that show 'If your rate was $150 last year and you were 90% booked or 100% booked, maybe your rate isn't high enough.' If, let's say, you find the guests are booking faster this year than last year, maybe there's something going on in the environment that you don’t know about. Gas prices, the weather, and cancelled events, all those things can impact the demand for lodging. Watch what's happening and how fast are you booking.  If you're 100% booked gauge how many people you possibly turned away. Analytics are an important and constant feedback tool. Google Analytics is a great, free, tool for people to monitor their website clicks. It's not as a robust or integrated as private analytics programs like Innkeeper’s Advantage , but it's a good start.