How to measure the success of a Tactical Campaign?

Black Friday is everywhere, far removed from its origins as a single-day, post-Thanksgiving shopping event designed to boost sales.

The decision to engage in Black Friday promotions or activate any tactical sale can be complex.

On one hand, offering significant discounts might attract price-sensitive customers, potentially leading to increased bookings. However, there's a risk that such promotions could dilute room rates and train customers to wait for sales, impacting profitability. Moreover, if competitors participate and your hotel doesn't, there's a chance of losing market share.

Is participating in Black Friday Sales beneficial for hotels?

According to eHotelier, hotels that ran Black Friday campaigns in 2023 experienced a 43% increase in website conversion rates compared to those that didn't. This highlights that if a campaign is well-executed, it can be very successful.

Tips for measuring the success of your Tactical Sale

It’s crucial to define the objectives for the campaign. Hotels should align these objectives with their broader revenue management and marketing goals. These goals must be measurable and grounded in previous trends and forecasts.

Here are potential objectives for a Tactical campaign:

1. Generate Incremental Revenue

Incremental revenue refers to the additional revenue generated as a direct result of the campaign.

How to calculate your incremental revenue?

Incremental Revenue = Total Net Revenue During Campaign (Gross bookings & Cancellations) – Forecasted Net Revenue if No Sale.

Tactical campaigns often come with potential downsides, which makes it essential to prioritize the post-sale period as a key part of the overall strategy.

 2. Return on Investment (ROI)

Determine the ROI by comparing the net profit from the campaign to its total cost. A positive ROI confirms the campaign's financial success.

Example Calculation: Return on Investment (ROI)

Suppose your Black Friday campaign generated $50,000 incremental revenue, and the total cost of the campaign was $10,000.

ROI = ((Incremental Revenue – Campaign Cost) / Campaign Cost) x 100

The ROI would be = (($50,000 – $10,000) / $10,000) x 100

This means you earned $4 for every $1 spent on the campaign. For context, a 3:1 ROI is often considered a baseline for marketing success.

3. Increase Length of Stay

Evaluate changes in length of stay. Longer stays can boost occupancy on shoulder nights, improve revenue, and enhance profitability.

4. Drive Direct bookings

Encourage direct bookings to reduce reliance on OTAs and minimize commission fees. This can be achieved by offering special incentives, such as exclusive discounts or perks for direct reservations. Success can be measured by analyzing the ratio of direct vs. indirect web bookings.

5. Acquire New Loyalty Customer

Use the campaign to grow your loyalty program by offering exclusive discounts or added benefits to members. For example, provide extra perks to guests who enroll during the booking process. Set specific targets for membership growth based on historical trends and campaign goals.

6. Improve Engagement Metrics

Focus on campaign engagement by setting clear benchmarks for success, such as:

• Email Open Rates: Aim for a target, such as a 30% open rate.

• Click-Through Rates (CTR): Measure how many recipients engage with your content, targeting at least a 5% CTR.

Tracking these metrics allows you to refine future campaigns and maximize engagement.

Conclusion

Participating in tactical promotions, such as Black Friday sales, can provide significant benefits, including increased bookings, enhanced guest engagement, and better online performance. However, measuring success through clear metrics is critical to ensuring these campaigns contribute positively to your hotel’s profitability and market position.

By analyzing these metrics, you can make informed decisions and develop more effective promotional strategies for the future.

At RevInsights Consulting, we specialize in helping hotels design impactful tactical campaigns tailored to their unique needs. From defining your campaign objectives to analyzing performance and identifying areas for improvement, we’re here to guide you every step of the way. Let us help you maximize the success of your next promotion and achieve your business goals with confidence.