Recovering Reservations from Visitors Who Abandon the Hotel Reservation Process
This post starts the Adobe Digital Marketing Suite customer blog series. Today, we are focusing on what one of our extremely innovative customers–HeBS Digital–is doing with Adobe solutions. Check out this post to see how HeBS Digital has helped one of its customers make a significant amount of revenue for a customer.
Turning abandoned visits into revenue opportunities
HeBS Digital uses the Adobe® Digital Marketing Suite to measure the results of digital marketing campaigns. Additionally, we use the suite to measure user behavior on hotel websites, and use this information to improve the conversion process to generate more revenue for our clients.
The suite offers a variety of reports to measure user behavior. For instance, the ‘conversion funnel report’ in SiteCatalyst® provides a breakdown of all important conversion metrics, from point of entry to the completion of a hotel reservation. The ‘pathing report’, also found in SiteCatalyst®, identifies the points at which users abandon their reservation. Knowing where along the reservation process people abandon is of utmost importance, and this can be narrowed down to the availability page, the room selection page, or the payment processing page. In sum, the funnel and pathing reports provide us with practical insight on making the case for what we recommend to clients: the HeBS Digital Reservation Recovery Strategy.
Industry-wide, the conversion rate on travel and hospitality websites remains at a steady 2 percent. This means that of all visitors to the website only 2 percent will ultimately book a room. Even with multi-million dollar online marketing campaigns, the major hotel brands and OTAs still hover around a conversion rate of between 2 and 3 percent. Using SiteCatalyst®, HeBS Digital’s client portfolio over a two-year period resembles the overall industry averages:
• From visitor to the site to a booking initiated: 45%
• From a booking initiated to a completed reservation: 5%
• From visitor to the site to a completed reservation: 2% – on par with the industry average
A high volume of visitors initiate a booking but do not complete a booking. This further supports the notion that visitors tend to check rates and availability, and then leave the hotel website to compare these rates with other hotels, read reviews, watch a related video, chat with friends, etc. Many of these hotel website visitors never return to complete the transaction.
To discourage visitors from comparison shopping, hotels deploy strict rate parity policies and publish best rate guarantee programs. They hire digital marketing experts to target highly qualified site traffic and retarget whenever possible. They utilize attribution models to determine what points in the research process yield the highest ROIs. They optimize their sites according to the new Google Panda and ‘Freshness’ rules and attempt to keep customers engaged through social media. They participate in bid management to reach qualified search traffic, and so on. In sum, hoteliers are doing everything possible, except attempting to recover reservations from guests who abandon the booking process.
HeBS Digital recently completed a usability study for a major hotel brand. To answer the question: “What is your primary purpose for visiting the ‘Hotel’ website today?” the overwhelming majority reported to be looking, shopping, researching, and browsing (multiple answers were permitted.)
Make a reservation 32%
View or cancel a reservation 5%
Research or compare rates 20%
Look for deals and specials 38%
Look for hotel information 18%
Find destination information 3%
The range in responses demonstrates the variety of uses shoppers view as the purpose and function of a hotel website. There are many reasons a guest will visit and leave the site. The same is true for starting and not completing a reservation.
HeBS Digital’s reservation recovery technology enables hoteliers to stay in touch with their customers after they abandon the booking. The technology is designed to capture shoppers who have abandoned at the point of purchase, and then recover these shoppers by sending a post abandonment emailer that invites the shopper to return and purchase. Thus far the pilot program for the major hotel brand has recovered over $160,000 in revenue in the first two months since installation.
How Does the Reservation Recovery Strategy Work?
Once the visitor reaches the point of purchase stage, abandonment is likely (as noted in the industry data above). A percentage of people will enter their email address, first name, and last name and then decide to discontinue the booking for whatever reason (checking with a spouse, distractions, payment issues, continuing to shop around, etc). It is this population of abandoners that the recovery strategy aims to reach and gives the hotel another opportunity to sell to this customer. As seen in the case study below, this is a sizeable group of potential buyers.
Here is how the strategy works. After the shopper abandons the payment page, a branded emailer is sent with a message thanking the guest for visiting the website. Included in the emailer is a phone number and chat function (if applicable) that connects to reservations. The emailer also contains a very important deep link that will return the shopper back to the point of purchase. The deep link embeds the specific property (used in cases for multi-property companies), dates of stay, number of guests, and room type selected from the point of abandonment. This allows the shopper to pick up where left off.
In this case study the emailer was set to deliver within two hours of abandonment. The emailer did not offer any incentive or other sales message – just a simple, non-obtrusive message thanking the guest for their visit with the link to return to the point of abandonment. The phone and chat function were not tracked.
The recovery system allows for personalization as well as language capabilities. The emailer is personalized and addresses the customer by their first name (if provided during the initial visit), and the language of the message is based on the language specified during the initiated booking. In other words, the more information gathered the more personalized the emailer.
Reservation Recovery Case Study Results
Client: Major hotel brand with up to 20 properties in North America
Date range: 10/1/2011 to 12/6/2011
As mentioned above, as many as 45% of visitors to a hotel website initiate a booking. In this case study, only 17% were of reachable quality (they provided an email address before they abandoned).
Total Booking Attempts:
• Initiated bookings: 38,147
• Abandoned bookings: 19,538
• Reachable bookings: 6,793 (17% of all initiated bookings got as far as entering the email address)
We were able to capture 17% of all shoppers who provided their email address before abandoning the page. Shortly after launching the strategy, we moved the email address field to the top of the booking process and made it the first item to complete on the payment page. We feel the higher placement made a significant contribution to the number of reachable bookings.
• Reachable bookers: 6,793
• Total reachable bookers that returned: 838
• Total returned bookers that converted: 192
• Total revenue recovered: $160,871
The 192 converted bookings from the total reachable 6,793 reachable bookers above represents a conversion rate of 2.8%. This is consistent with overall conversion rates for the industry. Of the 192 bookers, it is unknown what percent would have come back to book without the abandonment emailer and the 192 bookers did not impact the overall conversion rate for this brand. Instead, we view these bookings as incremental, as another tool to fight the OTAs, and another method to stay engaged with a highly qualified customer.
However one feels about the practice of recovering business, it cannot be disputed that an additional 2.8% conversion rate from qualified visitors can amount to sizeable revenues. If these numbers continue, the brand should expect to generate approximately $780,000 by the end of the year from this initiative. Given the nominal fee to set up, create, and run the project, the annual return on investment will nicely exceed 7800%.
About the Authors:
Jason Price is Executive Vice President and Mariana Mechoso Safer is Vice President, Marketing at HeBS Digital, the industry’s leading full-service hotel digital marketing and direct online channel strategy firm based in New York City (www.HeBSDigital.com). HeBS Digital has pioneered many of the “best practices” in hotel digital marketing, social and mobile marketing, and direct online channel distribution. The firm specializes in helping hoteliers build their direct Internet marketing and distribution strategy, boost the hotel’s Internet marketing presence, establish interactive relationships with their customers, and significantly increase direct online bookings and ROIs.
HeBS Digital & Adobe Partnership
With HeBS Digital’s expertise in the hospitality industry and Adobe’s leading edge analytical and design tools, the two companies have forged a partnership in best practices in online marketing and distribution. To learn more about the partnership please visit us at http://www.hebsdigital.com/aboutus/adobepartnership.php or contact HeBS Digital consultants at (212) 752-8186 or email@example.com.