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Congratulations to Joy Ritter and Shane Carlson, winners of this month’s team member Honey Badger Awards.
By Tina Upson
LiveRez VP of Operations
“Asked and Answered”I learned this new phrase a few weeks ago when one of my beautiful daughters was driving me crazy by asking over and over the same question, hoping, of course, that the “no” would somehow magically turn into a “yes”. Like many, sounding like my own mom was a road I was not ready to travel down. So, when my daughter asked again, I would have the original conversation with her (again), and then remind her that we had already discussed this.
Then one day a magical phrase was introduced to me: “asked and answered.” Short, to the point, easy to understand, and it WORKED!
Last month I wrote an article based on partner feedback from all over our partner base. And, although each partner has specific needs and concerns, the most common concern has been changes in distribution channels.
Hoping to answer the concern that a lot of partners share in navigating the changing vacation rental space, I challenged professional property managers to start by gathering data. But, I quickly realized that although I may have given partners a place to start, the answer to the actual question still remained: How specifically can we understand if we are “dependent” or “independent”?
So, while Part 1 of my blog dealt with the “asked” part, today I need to follow-through with the “answered” part.
Let’s start by diving deeper into the specific data you need to collect. Then, we can move on to how to use this data to answer the dependance question. And finally, we can go over some ways to start addressing the issues.
Step 1: Institute Tracking
If you’re not already tracking your marketing data, you should start right away. Running a LiveRez sales cycle report with the “How Heard” option checked can give you a good start, but you’ll need to add some additional information to see the whole picture. The final report needs to include:
- The marketing source of every reservation
- The total dollar amount of every reservation
- The amount of commission you earned
- Profit from any fees and mark-ups
- Cost of every one of your marketing channels
- BONUS: If you know approximately how much overhead is involved in providing the reservation
Here are some tools and processes you can use to find that information:
- Google Analytics / Google Search Console (Tracking Web Reservations)
- LiveRez’s “How Heard” Field (Tracking both Web & Phone Reservations)
- LiveRez CRM+ Campaigns (Tracking Inquiries from Listing Sites)
- Integration (Direct Bookings from Channel Partners - Tracked in LiveRez)
- Whatever method you want to use to track marketing costs (spreadsheet works well)
If you have this data, you have the building blocks for the next two formulas we’re going to look at. If you don’t have this data, start tracking it right away.
Step 2: Calculate Your Customer Acquisition Cost (CAC)
Also known as marketing acquisition cost (MAC), this metric will weigh the efficiency of your marketing efforts by channel. It will show you which channels are proportionally the most expensive compared to other channels.
Start by creating a spreadsheet that has the following data PER MARKETING CHANNEL:
- Total Money Spent
- Total Revenue Generated
- Your Share of the Revenue (commission, fees, etc.)
- CAC - This is calculated by dividing your marketing spend per channel by the revenue earned from that channel (either the total revenue or your share of the revenue, depending on who pays the marketing costs, you or the owner)
When converted to percentages, your CAC numbers should probably be in the general range of what you’d see a football team score in a game. If you’re running in the soccer/baseball score range, you’re killing it. And, I don’t care how good a golfer you are, if it’s anywhere close to your strokes for 18 holes, you’re overspending.
Step 3: Calculate the Diversity of Your Marketing Portfolio
This is going to show you what percentage of your revenue each channel is bringing you.
Start by creating a spreadsheet that has the following data PER MARKETING CHANNEL:
- Total Revenue From Channel / Total Revenue from All Channels
This will let you know how much each of your marketing channels is contributing to your total revenue. Go ahead and put this data in a graph, so you can see a visual representation of it.
If your pie chart looks like Pac Man, you’ve got some work to do. If it looks like a pizza, you’re in good shape. The idea here is to not be too dependent on any one channel.
Step 4: Create a Game Plan for Fixing the Issues
Now that you know what you’re dealing with, you can set goals and make a game plan for how to accomplish those goals. Start by asking yourself these questions:
- Is your marketing portfolio lacking diversity? Are you too dependent on any one channel?
- Are your customer acquisition costs (CAC) too high?
Other than finding ways to increase your overall revenue and profitability, these should be your two biggest concerns. Both of these issues can lead you down an unsustainable path and put you in a poor position to navigate any changes in the distribution landscape.
Ultimately, you want to start investing in your own brand (your own website, your own marketing database, your own following). Building your own brand will allow you to generate more direct bookings, create long-term sustainability, and give you more flexibility in choosing where to spend to marketing budget.
In short, it puts YOU in control.
In a future posts, we’ll go over some specific strategies for diversifying your portfolio and building your brand. But, until then, make sure to check out some of the great educational resources and learning opportunities we’re already making available to partners.
Learn from Marketing Experts at Partner Conference
The coaches track at this year’s Partner Conference is heavily focused on marketing, and we’ve assembled some of the top marketing minds in the industry to teach you exactly what you need to do to build your brand and grow your business. Here are a few of the highlights:
- Matt Landau of the Vacation Rental Marketing Blog is widely considered one of the industry’s most respected authorities on vacation rental marketing. He will teach two classes on building your brand and diversifying your marketing portfolio.
- Airbnb’s Content Strategist Michael Endelman is a highly sought-after content expert. A former editor for Rolling Stone Magazine, Endelman has developed content strategy for Google and has played a key role in increasing conversions for Airbnb. At the conference, he will share his data-driven recommendations for creating content that engages guests and gets them to book.
- David Angotti has helped build a number of brands over his storied career in marketing. Most recently as co-founder of SmokyMountains.com, he’s built his management company into one of the fastest growing firms in the United States. At the conference, he’ll explain how he’s used innovative competitive intelligence tools and tactics to grow his business at a staggering pace.
- And don’t forget, the conference keynote speaker Daymond John is not only a world-renowned entrepreneur and investor, but also one of the world’s most respected branding experts.
In addition to these AMAZING learning opportunities, all attendees will leave the conference with a marketing plan for 2017.
Access LiveRez’s On-Demand Vacation Rental Marketing Training Resources
To learn more about data-driven marketing and building your brand, check out the links below to access some of the educational resources we’ve created:
- Webinar: An Introduction to Data Driven Marketing
- Webinar: Building YOUR Brand: 5 Steps You Need to Take Right Now
- White Paper: How to Use Google Analytics to Improve Your Vacation Rental Marketing Efforts
- Blog: Data Driven Vacation Rental Marketing in Four Steps
- Playlist: White Board Wednesday Vacation Rental Marketing Tips from LiveRez VP of Sales/Marketing Tyler Hurst
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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Best-Selling Author and Branding Expert to Give Keynote Address at the Vacation Rental Software Leader’s Annual Conference