Instituting a data-driven marketing approach can help vacation rental managers make big gains in their total revenue and bottom line. But, many managers out there just don’t know where to start. In the following post, we’ll outline the data driven marketing process in four steps. Think of it like a primer on data driven marketing for vacation rental professionals.
Step 1: Institute Tracking
You can’t measure what you don’t track. You should know what marketing source(s) every one of your bookings came from. And, you should know how much you spent on each marketing channel. Here are a few things you need to institute to track this.
- Google Analytics – Make sure Google Analytics is installed on your website and you are looking at it regularly. Setting up the eCommerce portion of Google Analytics is important as well.
- Reservationist Tracking – For bookings that come through on the phone, your reservationists need to be asking how the guest found you.
- Email Tracking – If you are getting inquiries in the form of emails, you’ll want to track the source of those emails (your website, listing websites, replies to marketing emails, etc.).
- Marketing Budgets – Make sure you are keeping detailed records on what you are spending per channel. How much on Adwords, how much on email marketing, how much on listing sites, etc.
- Lifetime Value – This is harder to track and is a more advanced metric. The idea is to know how much a guest is worth to you over the value of your business relationship with them. Many guests will cost more to acquire when they are new, but will come back to you organically or through a lower cost channel for additional bookings. Smart companies that know a customer’s lifetime value aren’t afraid of spending more to acquire a new customer if they know it will pay off over the course of future purchases.
Step 2: Measure
Now that you have the data, you need to watch it and measure its effectiveness. Here are a few metrics to watch.
- Marketing Acquisition Cost – The percentage of your revenue that was dedicated to the marketing that brought in that revenue. For example, you got $100,000 of booking revenue as a result of Google Adwords and spent $15,000 on your Adwords Budget. Your marketing acquisition cost was 15%.
- Website Conversion – Conversions (online bookings) as a percentage of people who visited your website.
- Phone Conversion – The percent of bookings made over the phone as a percentage of total phone inquiries.
Step 3: Drill Down
Overall metrics are great, but you’ll see even better gains from drilling down to more specific items. Here are a few ways you can drill down:
- Marketing Acquisition Cost by marketing channel – Which channel is providing the highest ROI (lowest marketing acquisition cost) and can you scale your investment?
- Website conversion per marketing channel – Which marketing channels bring in the most travelers that book your homes? This is harder to track, because you’ll have leakage in the form of people coming to your website and then making a booking over the phone or emailing for more information. But you want to do your best to track your investments dollar to dollar, i.e. dollars spent versus dollars earned. Not all website traffic is equal. As you take a deeper looker, you’ll see some marketing channels may bring in less traffic but convert at a much higher percent.
- Phone conversion by reservationist – Who are your best performing reservationists? What are they doing better than the others? How can you reward their performance to ensure continued performance and long-term employment? What can you learn from their tactics that will help you improve the performance of your other reservationists?
Step 4: Optimize
Now that you have a good idea of how your marketing is performing, how can you improve it? Here a few things to look at:
- Scaling High ROI Channels – If one or more channels are working extremely well, can you increase your investment in them?
- Improving Channel Performance – What can you do to improve each channel’s performance? With each channel, you’ll want to examine the step-by-step process a potential guest needs to take to book a property, and then try to optimize each one of those steps. We’ll use email marketing as an example to illustrate the process:
- List Growth: Can you scale your email marketing success by getting more subscribers to your email list?
- Open Rate: Can you get more people to open your emails by optimizing subject lines, from lines, send times, list segmentation, etc.?
- Click Rate: Can you optimize the percentage of people clicking on links in your email by improving email design, calls to action, content, incentives, personalization, etc.?
- Landing Page Conversion Rate: For the people that do click on your emails, can you improve the pages they are landing on to increase their conversion rate? Are the pages you are sending them to not well suited to the offers in your emails? Are the pages missing crucial information that keeps travelers from booking? Are the calls to action on the page prominent and make it easy for the guest to begin the booking process?
Data-driven marketing can help you ensure marketing success by measuring and optimizing your marketing performance. Just make sure not to miss the forest for trees. Make sure you’re also looking at the big picture. Data is only valuable if you interpret it correctly. And no matter how well you track, there will always be unknown factors figuring into your marketing success. For example, some marketing channels may be playing a big role early on in the process that you can’t directly attribute to a booking. Your Adwords campaigns could be more expensive than your email marketing efforts, but it could be helping your email marketing efforts by getting more people on your mailing lists. Think of data like a GPS system. It lets you know where to go, but you wouldn’t let it drive your car for you.
How many of these steps are you taking in your marketing efforts? Which ones do you find to be most effective? Let us know in the comments section.
- How to Use Google Analytics to Improve Your Vacation Rental Marketing Efforts
- Goal Tracking in Google Analytics for Vacation Rental Managers
- How Vacation Rental Managers Can Track their Marketing Campaigns in Google Analytics
- 7 Reasons to Diversify Your Vacation Rental Marketing
- 5 Tips to Get More Traffic to Your Vacation Rental Website
Learn More About LiveRez
LiveRez is the most widely used software platform for professional vacation rental managers. The company’s cloud-based, end-to-end platform offers fully integrated solutions for reservation and property management, websites with online bookings, trust accounting, CRM, housekeeping and maintenance, reporting, reviews and more. LiveRez is a proud Gold Sponsor of the Vacation Rental Manager’s Association (VRMA).
Visit LiveRez.com to learn more:
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