At the recent HSMAI Commercial Strategy Conference, Stephanie Smith, CEO of Cogwheel Marketing & Analytics, delivered a presentation on the intricacies of marketing within the broader commercial strategy. Her goal was to provide a marketing perspective that complements the revenue-focused insights shared by other industry leaders. Her delivery and extensive knowledge offered attendees practical tools to enhance their commercial strategies. She emphasized understanding the entire customer journey, from inspiration to booking, and highlighted the critical role marketing plays in this process.
To start, Smith addressed the overwhelming amount of data generated daily, noting Adobe’s estimate of over 5 billion gigabytes created every day. She explained that a key part of marketing’s role is to cut through this clutter to help sales and revenue management teams close deals. Eye-opening statistics were shared, such as the fact that in the 45 days prior to booking a trip, the average traveler in the U.S. consumes 277 pages of travel content. This immense volume of information underscores the need for effective marketing strategies that can guide potential customers through the decision-making process. Her emphasis on marketing’s role in navigating this data landscape resonated with many in the audience, who often struggle with justifying media spend to owners and stakeholders.
The Customer Journey: From Inspiration to Booking
Smith detailed the customer journey, breaking it down into four key phases: inspiration, research, planning, and booking. During the inspiration phase, travelers get excited about the idea of taking a trip, often influenced by compelling marketing campaigns. In the research phase, travelers start narrowing down their options, comparing destinations and accommodations. Social media plays a significant role in both the inspiration and research phases, dominating the early stages of the customer journey. However, when it comes to the actual booking phase, social media’s influence wanes, and other channels like OTAs (Online Travel Agencies) become more prominent.
In the planning phase, travelers check rates and compare different options, a process that can span several weeks. The combined time spent on inspiration, research, and planning is approximately 71 days, whereas the booking phase lasts only a single day. This stark contrast highlights the importance of targeting potential customers early in their journey. Smith pointed out that while booking is a critical moment, it is the culmination of a much longer process where effective marketing can make a significant impact. Waiting until the booking phase to deploy marketing efforts is often too late, as the majority of the customer’s decision-making has already occurred.
Marketing’s Influence on Commercial Strategy
Marketing should support both group and transient sales processes by ensuring that all phases of the customer journey are effectively managed. Smith illustrated how each phase requires different marketing tactics, with a strong emphasis on early engagement to build interest and guide potential customers through the funnel. Data was used to demonstrate the impact of ad recall at different stages, noting that 67% of people recall ads during the inspiration phase, which drops to 39% during the planning and research phases, and plummets to 7% during the booking phase. This data underscores the need for a balanced marketing approach that spans the entire customer journey.
A comprehensive commercial strategy that includes robust marketing efforts is essential. Smith cautioned against relying solely on bottom-funnel ads and OTAs, advocating for a more holistic approach that addresses all stages of the customer journey. By focusing on the full planning window, marketing teams can drive long-term success and shift away from a reactive, short-term mindset. Marketing should not be an afterthought but an integral part of the commercial strategy from the outset.
Leveraging Data and Insights
Smith explained the importance of leveraging data to inform marketing strategies and decisions. Insights from the Expedia Path to Purchase survey revealed that 27% of travelers book their hotel room before their airline tickets. This insight highlights the need for hoteliers to prioritize early engagement and ensure their properties are top of mind during the initial stages of trip planning. Smith advised attendees to consider ad recall metrics and the timing of their marketing efforts to maximize effectiveness.
The challenge of measuring return on ad spend (ROAS) and the pitfalls of attributing success solely to the final stages of the customer journey were also discussed. Focusing exclusively on the booking phase neglects the significant influence of earlier interactions and content consumption. Instead, Smith advocated for a more nuanced approach that considers the entire customer journey, recognizing the contributions of various marketing activities over time. This perspective aligns with the broader goal of building long-term relationships with customers and nurturing repeat business.
Collaborative Commercial Strategy
Collaboration between marketing, sales, and revenue management teams is crucial to achieving a cohesive commercial strategy. Aligning on unique selling propositions and understanding the specific targets and needs of each segment, whether it’s weddings, transient guests, or SMERF (Social, Military, Educational, Religious, and Fraternal) groups, is essential. Smith called for a feedback loop where sales teams provide insights from customer interactions, helping marketers refine their strategies and ensure they are meeting customer needs effectively.
Revenue managers should share target segments and need dates with the marketing team well in advance. This foresight allows marketers to plan and execute campaigns that align with revenue goals and optimize booking windows. Smith also stressed the need for a concerted marketing plan behind promotional packages to ensure their success. Last-minute marketing efforts often fail to yield the desired results.
The Path Forward for Marketers
Smith concluded with a call to action for fellow marketers, urging them to fight for a seat at the commercial strategy table and to focus on education and upskilling. Understanding the full customer journey and spreading marketing efforts across all phases is crucial for long-term success. Smith encouraged marketers to develop comprehensive strategies rather than relying on ad hoc tactics, ensuring their efforts are aligned with broader commercial goals.
As the presentation wrapped up, Smith reiterated the need for marketers to demonstrate the value of their efforts beyond traditional ROAS metrics. By focusing on market share and long-term growth, marketers can prove their impact on the overall success of their organizations. Smith’s insights provided a valuable roadmap for integrating marketing into a cohesive commercial strategy, offering practical advice and actionable steps for attendees to implement in their own roles.
In closing, Smith shared a video from Kimberly Furlong, Chief Commercial Officer at Atrium Hospitality, who discussed the importance of building a foundation of mutual respect, celebrating successes, and fostering accountability within commercial teams. Furlong’s message reinforced the themes of collaboration and continuous improvement, providing a fitting end to an inspiring and informative session.
Stephanie Smith’s presentation was a masterclass in understanding the critical role of marketing within the broader commercial strategy. Her insights and practical advice left a lasting impression on attendees, inspiring them to take actionable steps in their own professional journeys. As the conference continued, Smith’s call to action encouraged participants to embrace new challenges and strive for excellence in their marketing efforts, ultimately driving the success of their organizations.
Originally published by Vivander Advisors in June 2024
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