11 April 2016

Cross-selling Rules for Hotels

Spiros

Cross-selling rules (massage)

The notion of cross-selling emerged many years ago and it is not confined to the hospitality industry as we see and, actually, experiencing it in many ways in our everyday life as well. That can only mean one thing and that is that cross-selling is a very successful technique and indispensable part of a sales strategy and you should absolutely include it into your hotel’s one. However, it is not that simple to apply as if you don’t do it right you will probably have the exact opposite results than the ones expected. Today, we are going to discuss some basic cross-selling rules that apply to hotel businesses together with some examples on how you could use it for your hotel’s profitability benefit.

Rule #1: The idea of cross-selling rests on the fact that if you have already captured the interest of a guest, you should try make him spend more than initially intended to. Nevertheless, you should not bombard your hotel guest with propositions. The fact that he has already chosen your services does not mean that he is keen on buying every single service or product you expect him to. Try to follow a concise plan and be as “soft” on him as possible. Evaluate the available options and make sure that the suggestion you make is somehow related to the initial purchase. Otherwise, you are not just going to miss your chance to earn more but you will absolutely miss the chance to have him back to your premises for a second visit, aka. decrease retention rates.

Rule #2: Try to hold back your impatience to sell more and wait until the potential guest has already made the first move. Although you can try to cross-sell even before the initial booking, if it is your first time trying you should wait until the guest has proceeded to a reservation. If the choice to come stay at your premises is already made, your efforts to sell more will be way more successful and fruitful. Therefore, make sure that you make the appropriate arrangements and that you optimize your website’s checkout process so that cross-selling “tips” comes with the “thank you” page. Then, after the guest’s arrival you should educate your staff on the best practices so that you can cross-sell in the bosom of your hotel.

Rule #3: As with every single step you take, you should test and plan properly your cross-selling practices as well. First off, for every attempt you make to cross-sell a product or service, you should keep records of the guest’s response, so that you can perfect your next move. For example, if you see that one type of guest (let’s say business travelers) tend to choose the same type of additional services when they have already chosen another one, you should keep that in mind for the next business travelers arriving to your premises. Then, you need to plan your moves so that you do not neither spam your guests nor missing your chance to earn more. Categorize your services and products and develop a consistent plan of which ones can be combined. Coming back to the aforesaid type of traveler, why would you suggest a free pass at the playground since there is no way he would travel with a kid while doing business?

Rule #4: A couple of years ago there was a guide for cross-selling at The Economist and one of the most important rules was “the rule of 25”. This rule aims to constrain your cross-selling tactics in terms of cost. In other words, if the initial purchase is €100 and you are trying to make your guest spend more with a service that costs €100 as well then you missed your chance to win. The aforesaid rule states that you should not exceed the 25% of the initial purchase. I know that can be hard, especially in the hotel industry, as you cannot really limit yourself to that number but you can absolutely catch on a reasonable recommendation. For example, it would wiser to propose a couples massage when someone books a honeymoon suite instead of proposing a service that might cost twice the price of the suite.

Rule #5: As a hotelier, when you receive a booking, whether it comes from a new customer or a returning one, you already have some basic knowledge on his profile. During check-in you get even more information as you probably already know at this point your guest’s age, marital status, gender and so on. At this point you should take care of two things. Firstly, you need to “write” everything down so that you have your database updated. Secondly, you have to think before you suggest… Strictly speaking, you have to consider all the information you have available (in case of a returning guest that process will be much easier as you already know the guest’s preferences as well) before you cross-sell your hotel’s services and products.

Bringing up rear, although cross-selling might sound quite straightforward I-have-to-sell-more-than-a-room, it is not. As it happens with everything, business-wise, years and practice have proven that we have to follow some basic rules in order to avoid others’ or even our own mistakes from the past. Therefore, if you want to start earning more than just a reservation you should absolutely consider cross-selling but always with these rules in mind.

For more advice and services for your hotel, please contact our experienced team.