Holiday Parks: Making the most. Of your. Customer Data

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1 Holiday Parks: Making the most Of your Customer Data More booking, more holiday home sales and less marketing spend

2 How to get more bookings from your customers for less money A brief explanation in time of how your customer data already contains enough information to increase your bookings and sell more caravans without changing what you do or how you do it. By Mark Scott Director, i-data.co The last few years have seen a dramatic shift in the booking patterns of both loyal and new customers. With later bookings and changing durations, it is difficult to know sometimes how to maintain and grow your business while the big boys charge ahead with year on year increases and better profits. Customers are demanding more quality, better value but above all now respond only to offers that match their need at the right time. They are used to receiving marketing communications that are spot on, no more scatter gun approaches. And when this doesn t happen they get irritated and your brand takes a hit, reducing your new versus repeat percentages. To keep up with these changes in your customer s expectations and resulting behaviour, what can you do? Get to know your customers Do you know the answers to these questions? Which of my customers are likely to book a second holiday this year or next season? Who is most likely to buy a holiday home? Lodge? Mobile home? Which of my customers can I target for an additional product or service? What is the split between my camping and touring and static bookers? Which of my customers/prospects are likely to respond to my marketing activity? Which of my prospects will respond to marketing initiatives? What is the best way of allocating my marketing budget to get the best customer/prospect mix? What other parks are getting wallet share that should be yours? If not, you are losing bookings and caravan sales to those parks that can answer these questions. Have you ever wondered why the big boys are succeeding with double digit growth year on year while the small groups and single parks are falling behind? The answer is simple, because they understand everything about their customers through the use of some very sophisticated analytical techniques. But sophisticated doesn t mean expensive. By making customer insight a part of your DNA you can make sure you grow and develop your park through knowing your customers better.

3 Introduction The holiday parks industry has seen significant growth in the last few years, bucking the trend that many other parts of UK industry have experienced. However, this upward trend is starting to falter as the economy gets more and more squeezed and even UK based holidays become more of a luxury. Question: How do you maintain your growth and increase your bookings in the coming season? Answer: By knowing your customers better There are a lot of articles around about the use of customer data in creating better relationships with your customers through the use of data analytics to create better marketing outcomes. This paper is designed to give park owners and marketing managers an introduction to how to apply analysis driven marketing activity to create better outcomes and more bookings. It explains not only why you need to consider this change in your marketing strategy, but also how to get started. You ll find out how to create a data led framework around your marketing and what tools can help you succeed where your competitors fail can help. Increase response rates Improve repeat bookings Increase bookings Deliver the right message at the right time The world of marketing is changing There are 2 dominant trends transforming the business of marketing your holiday parks: The incredible explosion in the data that you now have about your customers The shift in choice away from the holiday parks to the customer driven by technology 1. Data explosion It used to be simple selling holidays and holiday homes. Annual brochures sent out and sit back and wait for the peak bookings to come in. Off peak was always a challenge, but with some blanket mailings and the use of low cost promotions such as the sun, combined with some luck, a park could be fairly confident of achieving at least last year s levels of business and in many cases, exceed it. But this has changed; bookings are getting harder to win and consumer choice is getting greater, reducing loyalty. The other side of this fundamental change in the industry is that the technology that is allowing customers to access such a wide range of holidays is also allowing the parks to capture so much more information about their customers and just as importantly, the enquirers. This data is available to the park from a range of touch Points. From a brochure request that gives you at least the name and address; through to the full data available from the booking records including ages, action dates, preferences and individual spend. This flow of data inwards is not just confined to online information; there are multiple opportunities for parks to capture customer data during and after the holiday experience. Making these access points work is a skill in itself, making sure the

4 customer gives you as much information as possible without getting bored or create mistrust is the crucial point when gathering customer data This data is flowing into the parks through many different routes and is growing at an exponential rate, which in itself creates problems, it often feels like a tidal wave is coming at you and where do you start to make best use of the information? 2. Shifting power to customers As this data explosion continues to gather pace, so there has been a equal shift of power to the customer. By using the internet, customers can now find a whole number of competitive parks in the same area, compare prices, facilities and look at real feedback from past clients on sites such as Trip Advisor. Additionally the power shift has led to an expectation of products and services that are personally relevant, timely and delivered via a channel of their choice. Failing to do this will ultimately frustrate your customers, both new and repeat and turn them away as your park will be perceived as being out of touch. 3. Implications for marketing your park To be effective in this new environment, and maximise the return for your marketing budget, parks need a marketing process and strategy that is customer centred and backed up by strong and reliable information about your customers. Marketing now requires a much greater in depth knowledge of your customers, not as groups of people but as individuals who feel they are valued through your knowledge of their wishes and wants. As most of us know, marketing activity leads the growth in bookings and the traditional methods and channels do still work, to a point lord copper. However, these traditional methods are expensive and random in their effect. Marketing managers and owners must have a marketing strategy and process that is much more customer centred powered by accurate and deep customer insight. A customer who gets the wrong communication at the wrong time is expensive and probably lost to the organisation as they mark the communication as junk. To achieve the outcomes you desire and to keep pace with your competitive parks, you must create a far more granular analysis of your customers and prospects than ever before. Consider the following areas of activity and objectives: High season occupancy growth: To grow your revenues you will need to work out what your customers want to talk about and when. Low season occupancy growth: increasing your low season bookings has always been through low cost channels resulting in lower revenues. By understanding the customer and what they want you can increase these difficult booking numbers by 30% just by getting it right. Loyalty: what is your true repeat rate? What is a repeat customer? How should you identify who is a good loyal and who is a bad loyal? Competition for your share of your client s wallet is getting fiercer. The cost you pay to win a customer is much higher than the cost of gaining a repeat booking. So keeping your existing customers is vital to the success of your park. TO do this you need to identify who they are, what their behaviour pattern is and make sure you market directly to them with the right message at the right time. Profitability and Revenues: 80% of your revenue and profits come from 20% of your customers. Knowing who they are is the trick to higher occupancy and better profit. 4. Building an analytical framework for marketing. Understanding how important your data is to the future of your business is the first and often the hardest stage. After you have reached this milestone, understanding how to make it a natural part of your day to day activity, not just in marketing but across the park is vital to your parks future success.

5 Analytics don t replace your current decision making process but they enhance it by making all your decisions better informed. We recently identified for a park that has a repeat booking rate of around 30%, a good level, but much less than the 60-70% they believed it to be. Their figures were based on the number of people who said they had been before and not on hard facts Key areas to consider are: Segmentation this is one of those words that make us mere mortals cringe when talking to marketing teams. However, it is the basis of successfully increasing your bookings in both low and high season. By understanding what your customers have in common with each other and making sure these groups of people are of a reasonable size, you can reduce your marketing spend and get a much more relevant message to them at the right time. Think about the people who come on holiday at your park in the high season and those who come in low season. They are different in many ways, but importantly have different needs and so marketing to both at the same time with the same message will at best get no response, and at worst just annoy your loyal customers. Then by looking at your database for people that look the same, you can increase your likely hood of success and increase bookings. Predictive modelling Predictive what? It s just a posh name for looking at what your customers have done in the past when prompted and predicting what they will do next time. By understanding their behaviour you can be much more accurate in predicting what they will do in response to your latest communication. Optimised campaigning By looking at your marketing budgets and understanding what you expect in terms of outcomes, you can make some very intelligent decisions about what to send and when and to who. It is important that you don t everyone every week this will just create a diminishing response rate and annoy your clients. It is equally important that you don t forget your loyal or repeat customers and make sure you are sending them the right communications that demonstrate your relationship with them. By creating an optimisation culture within your marketing activity, you will find better results, lower cost marketing and higher booking rates. The very foundation of this framework is the availability of a comprehensive, clean customer data source that can be analysed to create unique customer insights and effective and on-going segmentation. This information should be continually updated and in turn any segmentation that you have created should also be updated. The frequency of this will depend on the systems you run and the frequency of the customer s interaction with you as a holiday park. For large parks with multiple interactions every day, then weekly updates would be appropriate but for smaller parks with a lower rate of change to the bookings then a monthly or even bi-monthly update would suffice. 5. Segmentation driven by your customer information. Customer segmentation is another of those marketing terms that seems to mean so little and yet can make a huge difference to your marketing outcomes. By getting this right you will reduce your marketing spend and increase your bookings. The basis of this framework is clean comprehensive customer data that is available to be analysed by marketers and non-marketers alike. This data source must be framed with a process to ensure it is updated often and allowed to grow with the business. But don t think any data is good data and think about how you capture the data and identify ways of extending the data by improving the quality of the data capture techniques. a. Foundation Segmentation By creating a core set of segments the park can create a consistent set of communication strategies that will deliver long term and consistent bookings. All customers must be included, both enquirers and bookers. However, it is important that customers only appear in one segment to ensure strategic marketing messages such as main brochure are sent to each customer only once. It is true that segments can be subdivided into natural clusters such as geography. The foundation segments are identified by such things as booking value, recency or frequency, risk of attrition, demographics and accommodation

6 type. This is particularly important when introducing a new park or new accommodation type when the foundation segment becomes the primary method of creating the initial marketing campaigns. b. Targeting segmentation The granular level of segmentation identifies customers with specific needs and preferences such as specific accommodation type or location, additional facilities for older family members or entertainments for their children. Not all customers will be involved in a segment and some may belong to more than one segment. The customers in each segment or sub segment will then be targeted with specific messages in specific campaigns. It is mainly focused on tactical marketing campaigns carried out during the season. By using this method, a park can identify who booked the particular type of accommodation and when and target them to increase occupancy in low booking weeks or breaks. Analytics intelligently used can allow a park to go beyond basic segmentation and create more effective sophisticated campaigns with messages and offers that are most relevant to the people you are sending them to. So, to fully understand how important your data is to your success in the future let s examine how a real holiday park can use it to improve their bookings and reduce their marketing spend. The first stage of a parks marketing activity each season starts the season before with the brochure creation and dispatch. The brochure is usually sent to everyone on the database regardless of when the client last booked or even if they have booked. o The results are mixed with conversion rates of less than 14% being common. o By looking at their data more closely, our model park reduced their brochure costs by 22% and increased their bookings by 3%. o To do this the data was audited and cleaned, giving a 9 % improvement in addresses and a 11% increase in the accuracy of the post codes. o The brochure launch was then split into two mailings, one for those who had booked or were likely to book before Christmas and those that would book after Christmas. This had 2 effects o Reduced the number of second brochures that were requested after the Christmas watershed o Increased bookings by making sure that the park was responding to the customers behaviour 6. Creating accurate communication So how do you communicate with your customers in a way that they will appreciate and at the right time to ensure the maximum benefit to your park? Most marketing managers and owners have at some time tried to separate their clients into groups. These groups are usually based on demographics such as Mosaic or Acorn, and are provided by external agencies based on a generic approach to marketing and rarely specific to the park industry. However, this form of foundation grouping can do little to identify how you clients book, when they book and what they are booking. By separating your clients into groups who behave in similar ways based on your own data, you can be a lot more sure of what you need to say and when you need to say it. This sounds easy, and to a certain extent it is, it s just a matter of looking at your data in detail and breaking it down through evidential analysis. This is a grand way of saying that you need to look for patterns rather than making assumptions. By adopting this approach the park can then create a number of targeted groups, sometimes very small groups of, say, those most likely to buy a holiday home, or a larger group of those moist likely to book a low season holiday after the school holidays. This can be done through looking at a number of attributes including

7 Event times (eg when do they book?) Account status (Outstanding payments?) Change rate (cancellations, complaints etc.) Geographical location (cost of local advertising, travel times) And many others What you look at and what you use will depend very much on the historical and current data you have available. 7. Strategy Ultimetly it s all about your marketing strategy and the tactical campaigning, what do you actually do with all this new information and insight into your customers? Well, you could leave it on someone desks hoping they will action it, or maybe just put it in the draw and carry on as before. But it is important to realise that the other parks in your area and beyond are actioning it and are making more of their customer data. They are getting more bookings, selling more holiday homes and gaining a reputation among their customers for making their communications both relevant and timely. Your strategy has to be to use the analysis to create more accurate, better, communications. Make every communication count. To do this you need to have constant access to your data, it shouldn t be locked up in your reservation system and be difficult to get at, if it is, change the situation and copy the data into a separate marketing system. By doing this you can create some very sophisticated analysis by tracking a client through their interaction with your brand or park. Most reservation systems don t do this, they work on the basis of a client with a series of incidents, but they don t track a client s journey and keep the history to allow better analysis and understandings. By creating a separate database, you can copy out the data and keep it for as long as it means something, usually 5 years or so. You can work out who books what, when and how and watch that journey change over time and adjust your marketing strategy accordingly. So when you are putting together your mailing for the latest brochure, don t just send it to everyone, send it intelligently by looking at who books before Christmas and who books after Christmas; look for those who have already booked their new season holiday and send them a letter as well offering a discount on a second booking, after all we all want to believe our holiday park knows its customers don t we? 8. Conclusion DON T BE A DINOSAUR The world has changed and doing the same as you did last year will no longer work as well as it used to, and what s worse is that as your bookings drift downwards, so those loyal customers who used to come to your park are now loyal to your competitors. Your customer data and information is no longer a nice to have, it is vital to your future in this increasingly competitive business. Without it, you are shooting a shotgun into a very dark room and hoping to hit something. You need to be smarter and make sure you use what you have to maximise the bookings and sales opportunities you have before you. Don t think you are too small for this, from 5 pitch caravan parks through to multi-site groups; everyone needs to take the same approach before your solid family business disappears, or is swallowed up. Create a data led culture, take every opportunity to understand your customers and learn as much as you can about them. The channels may not happily share their data with you, but once those customers are on your park, ask them who they are, what they like, when they go on holiday. Put this information into a database and keep it for next year so you can make sure you target your customers with the right message at the right time.

8 Think about separating your customers into different pots and Split your brochure launch into pre-christmas and post-christmas Identify those customers who complained last year and would benefit from a timely offer Aim to make late bookers into early bookers by understanding their needs Work out your travel times Look at the best post codes areas for your park and understand your penetration Look at your parks demographic profile, does this match your customers profiles? And watch your business grow

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