Hotel Revenues Low? Say Hello To CRO

For decades, hotel marketers have used acronyms like Revpar, ADR and AOR to gauge the health of their business. But recently, a new acronym has emerged that directly impacts all the others … CRO, or “Conversion Rate Optimization.”

Innovative hotel groups and hotel management companies are using CRO across their web, call center and sales operations to rapidly distance themselves from their compsets.

What is CRO?

CRO was started by ecommerce companies like Amazon as a way to increase the percentage of website visitors that convert into customers. Travel industry giants like Expedia, TripAdvisor, Kayak and major hotel chains soon caught on, using CRO to increase the number of calls and visitors converting to actual bookings and revenue.

The benefits of CRO are obvious: as the cost of driving traffic to your website or call center increases, so does the importance of converting a higher percentage of your traffic. 

The basics:

Let’s take a closer look at how to get started on CRO:

1. Designate a CRO leader: don’t even bother trying CRO unless you have a capable, math-loving champion in the organization to lead the charge. This person or hotel marketing company should have enough time to carefully administer CRO experiments and monitor results. They should also have software enabling them to accurately gauge results of their various tests. And most importantly, your CRO leader must have the support of senior management to implement real changes in the organization based on the results of their CRO findings.

2. Measure what matters: Start by deciding which metrics matter most. What are the key metrics affecting your revenue production? A few come to mind right away: Entrances into the hotel booking engine, opportunities in the pipeline for your sales team and calls into the res/call center. Ultimately, revenue and bookings are the most important metric, but you will need to fix the up-funnel metrics before you can grow revenue.

3. Get real data: Do you have systems in place to actually gauge current run rates for the metrics you’ve decided to optimize? Its vital to know real results before you start your CRO experiments.

4. Get real user feedback: Data from your systems alone won’t be enough. You’ll also need qualitative feedback from real people about their experience with your sales and marketing assets. How? Ask lost sales opportunities why they chose a competitor? Pay $79 to usertesting.com for unbiased reviewers to test and record their experience on your website. You will be amazed what you can learn by talking to real prospects about their experience with your sales and marketing process.

5. Start your A/B tests: A/B testing is exactly what it sounds like: you try an A and a B version simultaneously to determine version which was more successful and then put it into permanent real-world use. What to test? Here’s a few suggestions:

• Which website pages drive more entrances into the booking engine?

• Which sales script converts more meeting leads into opportunities?

• Which offer converts more inbound calls to bookings?

No-Nos for CROs

CRO can get very technical, but it can also be very simple. The items above should help you get started, but there are also a few common pitfalls to avoid:

1. Avoid testing with small numbers: you’ll need a statistically significant volume of traffic/leads/calls to get meaningful results. Also, experiments with larger flow should make your CRO efforts worthwhile when results begin to improve.

2. Stop guessing: Don’t try to improve any channel’s conversion based on guesswork or “gut instinct.”

3. The Boss isn’t always right: Try not to let the highest paid person or senior executive’s opinion determine which CRO experiments to run. Reply on data and actual user feedback to determine the problem areas.

Is it really worth it?

The push to shift away from dependency on OTAs and increase direct bookings has inspired hotels of all sizes to spend billions on driving traffic to their own website and call centers. Sadly, its mostly wasted… hotel owners and their marketing teams would be better served by focusing instead on converting a higher percentage of their existing traffic stream, no matter how small it currently is. Improving your conversion rates across all channels should be at the very top of every hotel marketer’s list in 2014.

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1 comment about "Hotel Revenues Low? Say Hello To CRO".
  1. Paula Lynn from Who Else Unlimited , May 27, 2014 at 10:57 a.m.
    Higher CRO = Airline improvements (seating and costs)