As we head towards the New Year, many of you are looking at your P&L sheets to start to determine where you need to concentrate your efforts for next season. The one thing that seems to get lost in the process is taking a look at your particular customer and deciding what they would really want for next year.
One of my favorite examples of knowing what the customer wanted was Steve Jobs. Love his product or hate it, love him or hate him, he was unbelievably successful in knowing what his customer base wanted or needed, many times before that base had realized what the need or want was.
Within the RV industry, we are in the middle of a huge shift in the way the industry is marketed. This is particularly true within the RV campground side of the house. The piece that I see consistently missing for a lot of businesses is a true understanding of who the customer is and what they want.
Hopefully, by now, everyone is using some method to determine how happy the customer is with the service they received, what they liked most and what they liked the least. We all concentrate on the “What did you like the least?” question but ignoring or relegating the “What did you like the most?” question to a lower rung on the marketing calendar is a huge mistake.
While reviewing that P&L for next year, let’s take a look at some of the following:
Rates: While it is tempting to just compare your rates to the competitions rates, you should do more than that. Your comparison should include the area hotel/motel businesses, especially if you have cabins or park models. After all, you are all in the hospitality industry. David Gorin, of Best Parks of America, has suggested that it makes sense to compare yourself to area hotels/motels that provide comparable amenities on a high level and base your rate at 50% of the hotel rate.
Now you may have automatically shrugged this idea off as being apples to oranges comparison; however, if you take a step back you will find that there are a lot more apples to apples than you originally thought.
At the same time, take an honest look at your “braggable” amenities that you can provide a customer. Do you escort everyone to their site while the competition doesn’t? Do you have a pet park? Once you have identified what sets you apart, use that information to help you decide what your rate should be.
Advertising/Marketing: Hopefully you have a spreadsheet set up with all of your marketing efforts listed, the cost of each and the results of each.
Here is the biggest issue I see with advertising and marketing efforts. The ads or marketing materials don’t have a CTA! Without a CTA (Call to Action) how can you possibly decide whether you are spending your limited marketing budget wisely? A CTA can be as simple as offering a discount if the customer mentions your ad or shows you the brochure that brought them to you. Most reservation software will allow you to set up codes to track the “How did you find us” metric. Use these codes wisely and efficiently. I have seen a code list that was at least 15 items long. All that did was to guarantee that the reservation clerk was going to select one of the top 10. Think of the marketing codes in your software as being similar to a Google search page. Once it goes longer than 8 to 10 items, people don’t look further. Make those codes meaningful but also effective.
Once you have an idea of how many of your customers responded to your ad or marketing materials, you now need to determine the ROI (return on investment) for each of those. This is a fairly simple math problem. Divide the cost by the number of customers who responded or reported finding you using the method in question. I have found that for some RV parks, the cost of advertising in a major directory resulted in a cost of over $250 per registered unit.
It’s easy enough to say that everyone is doing it (meaning your competition), but if your customers aren’t using the information what are you gaining? The reason you should advertise or market using a specific approach should be because that is where your customer is going to find you, not because your competition is using that approach.
Amenities: In today’s marketplace there is an unbelievable amount of choices to be made in which amenities you need to be offering. There are splash pads for the kids, doggie parks for the pet owners, game rooms, activities, etc. Once again the key to deciding what amenities to improve on, add or no longer provide, is going to depend on your customer.
If your major customer is a Snowbird, maybe a splash pad makes sense if you can convince the snowbirds that playing in a splash pad doesn’t make them look foolish. On the other hand, if your major customer is families, providing card games as an activity may not be the best use of your funds.
Here again, I believe that part of the missing link is in determining what your ROI is for each of your amenities. It may sound complex but it really doesn’t have to be. Once again it comes down to deciding how many of your customers use a particular amenity and dividing the overall cost by that number to decide how much the amenity is costing per customer.
In case you haven’t picked up on my general trend, let me try to simplify it.
Rule #1: Know who your customer is. Know your customers wants and needs better than the customer knows their wants and needs.
Rule #2: Measure everything based on what the cost is. If you are trying to decide on a new amenity, take a logical approach to deciding how many of your customers are going to be interested versus how much the new amenity is going to cost.
I’m sure that you are doing all of this already, but a reminder never hurts. What methods do you use to decide which way to head? What are your pain points and how can I help relieve some of that pain?