Hotel Market Segmentation: 5 Ways to Put More Heads in Beds

Hotel managers are always trying to find ways to put more heads in beds. These days, more than ever, they are also working from extremely tight advertising budgets. Hotel managers are finding ways to stretch their advertising dollar even further using sophisticated techniques like market segmentation.

If you are like most hotel managers, you may not be exactly sure where to begin the process of market segmentation. And, it may not be clear exactly just how doing so may positively impact your bottom line.

Here are 5 ways that hotel market segmentation can put more heads in the beds of your hotel:

1: Significantly increase the effectiveness of your advertising campaigns:

Market segmentation essentially involves dividing up one’s total target market into well-defined groups or segments. The concept operates on the principle that some target prospects are more likely to purchase from you than others. By focusing your advertising expenditures only on your hottest prospects, you can significantly increase the response rate of your ad campaigns. The result is a more effective, streamlined campaign and a better ROI (return on investment).

2. Contact more of your hottest prospects without increasing your ad budget:

Imagine the efficiency you can achieve by only directing ad campaigns at those prospects most likely to stay in your hotel. To liken advertising to fishing for a moment: if you know in advance the spots along the lake where you are most likely to catch a fish, why would you ever waste time fishing in the other spots? The same principle applies to the world of advertising: by focusing your advertising dollar solely on those prospects who are most likely to stay in your hotel, you can get your message out to more prospects without increasing your ad budget. The result will be more heads in beds!

3. Advertise only on the radio or TV stations to which your customers listen most:

There are available to you today sophisticated tools that will analyze your existing customer database, divide those customers into pre-defined segments (or clusters), and then tell you the probability that the members of each segment will patronize your hotel relative to the general population. Once you know your hottest target market segments, you can then determine exactly which radio formats, TV programs and cable networks your target segments are most likely to listen to or watch. By focusing your ad dollar only on those hot segments, you can realize the efficiencies afforded by market segmentation.

4. Place ads in the magazines and newspapers most often-read by your target prospects:

Market segmentation also applies to helping you select in which magazines and newspapers (and even sections of newspapers!) you should advertise. With the huge variety of printed materials available today, a focused, direct approach is definitely the wisest way to select where you place your ads. Market segmentation tools take the guesswork out of the placement process.

5. Send direct mail to those prospects most likely to buy from you and skip over the rest:

One of the most surgically precise and efficient ways for you to leverage the results of your market segmentation analysis for better occupancy rates is direct mail. Market segmentation and direct mail go hand-in-hand. When used together, they represent one of the smartest ways for you to get your message out to those prospects most likely to stay in your hotel.

Market segmentation has comes a long way from the early days of marketing of decades past. Today’s ultra-sophisticated tools can pinpoint and then intricately profile your hottest prospects. They also are able to indicate which mass media (radio, TV, magazines and newspaper) or direct advertising (direct mail) vehicles are the wisest choices into which to place your ads. The result is increased efficiency, better response rates, and much better ROI for your ad campaigns.