Panelists: RM, marketing must be on same page
Panelists: RM, marketing must be on same page
26 JANUARY 2015 6:59 AM
Revenue management and digital marketing departments must work together to maximize profitability as customer acquisition costs continue to rise, panelists said during a webinar.
REPORT FROM THE U.S.—Revenue management and digital marketing departments must work together to maximize profitability, panelists said during a webinar.
During the webinar titled “Revenue management & digital marketing: convergence or collision?”, panelists agreed that finding a happy medium is crucial as customer acquisition costs continue to rise. 
“Gone are the days you go into the ‘mighty Google’ and type in a destination,” said Gopakumar Menon, regional director of revenue and distribution for Highgate Hotels. “That has changed. Therefore, costs have gone up.
“Customer acquisition costs actually eat into our revenue per available room at the degree of almost $9,” he said “That’s the impact that a lot of online digital media spend has on your bottom line. Metasearch engines are adding to our costs.”
In order to allocate the right sources to the most profitable revenue streams, Highgate has split its marketing functions into two broad heads: online and offline. Revenue management falls under online, and marketing falls under offline, Menon said. The online silo includes anything related to e-commerce and social media. The offline silo includes things such as branding and image.
“It’s indeed a convergence, not a collision,” Menon said. 
The relationship between digital marketers and revenue managers is a work in progress, and often it takes a concrete example of return on investment to get buy-in, said Sine Scott, regional director of internet marketing at Fairmont Hotels and Resorts.
For example, Fairmont’s revenue management team set up on TripAdvisor a unique rate code, offer and phone number for a specific deal. 
“It really helped demonstrate whether this special offer worked or not and whether having a business listing was worth the money,” Scott said, adding that her team was able to track clicks and bookings with the unique rate code, online and offline.
“This turned out to be a great success. In addition to driving traffic to the site, we saw an increase in bookings that were directly related to TripAdvisor users who saw the special offer,” Scott added. “Now we have something as a basis to look at year after year.”
Fairmont’s revenue management team has been “very responsive” to digital marketing and what it can bring to the table, Scott said.
Highgate’s Menon tried a different alignment tactic with his company’s marketing department. Every 90 days, company executives give a presentation to everyone involved in the digital space, he said, including revenue management, marketing, operations and accounting. 
Included in the presentation are ways to encourage staff to sell online packages when someone is checking out, how to increase volume on the websites and things of the like. The company also puts together a yearly digital-media calendar to help align everyone on what’s coming down the pike, he said.
Panelists agreed campaign integration and shared Web analytics are keys to a successful, symbiotic relationship. 
For instance, the digital marketing team can share Web analytics such as Web visits (which can be an early warning to demand), trending cities, new versus returning users and conversion rates. 
This data can complement all the production and trend data the revenue management team works with, Scott said. 
“There may be a disconnect with what’s marketed and what’s offered,” she said. 
Looming challenges
There are three major challenges that still exist between revenue managers and digital marketers, according to Loren Gray, VP of digital strategy at Standing Dog Interactive:
  1. sandbox mentality; 
  2. communication; and
  3. non-synchronous goals. 
The “sandbox” mentality has to stop, Gray said. In other words, revenue managers need to be willing to let digital marketers play in their space, or sandbox. In regard to communication, revenue managers and digital marketers need to use terms that are easy for everyone to understand.
Perhaps the most difficult challenge lies in non-synchronous goals, Gray alluded. 
“The methodology and metrics are completely different, even if they’re all trying to drive revenue to the hotel,” he said.
One way to achieve the same goal is by comparing revenue sources and sharing relevant market data and goals. “We need to be willing to modify the strategies based on the data we didn’t get from each other. In order for revenue management’s goals to be infused with digital marketing, digital marketing needs to translate that into the methodology they have,” Gray added.

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