Monthly Archives: November 2008

Would you buy shares in Hatty Green?

The formidable Hetty Green, 19th century millionaire, was a woman after my own heart. Indeed, she was reputed to have a rather tricky personality to say the least*… yet in the cold light of the records of her deeds, and looking at evidence almost a century old, I can comfortably say she is someone to look up to. Hetty Green, miser or not, seems to not only have been an independent thinker; she was also someone who made her difficult personality work for her. Having read about her life, I think there were a couple of tricks up her sleeve that are worth learning.

Despite the 174 years since her birth (today), her established presence in the financial world has meant that there is plenty of evidence to draw some conclusions about how she was worth some 100 million when she passed away in 1916.

It appears that Mrs Green had the clarity to look into the financial world around her and see it for what it was. She had the confidence in her knowledge (she was reading financial reports since she was six years old) to identify and go after the potential opportunities that a turbulent market invariably generates. And last, but by no means least, she had the means necessary to convert opportunities to profitable ventures. My favourite quote of financial wisdom comes from one occasion when she reportedly said that “next to my own dear children, I love nothing more than a good panic”.

Mrs Green did indeed love a panic as much as her children, and so do a few people that can afford to look for the opportunities it brings.

A market panic is full of characteristics of an emotional reaction (yes, that is why they call it a panic, I hear you say). We all know that we had at least a couple of those in this year and we all understand how they fuel what it appears to be emotional reactions to the entire world economy and business.

Although the individual decisions in their majority are cold and usually inevitable choices relating to the way a company or a department can adapt to a new financial situation, the company-level behaviour, when examined from outside, is in essence emotional. We know it and feel it with our business every time it happens…

Bans on travel usually come in two stages. First, a reduction and eventually stopping in participation to large events. Large teams of employees will not be submitting travel expenditures as they did the same time last year. Good decision for the person who is going to be explaining in a few days what he is doing to help cut costs.

Transient travel comes next. No more luxury hotels, business or premium economy flights. Yet another tick in the box for that all important cost saving report.

Naturally, there is a fundamental flaw here. If you were letting people go to all these events, were you just spending good company money for no reason last year? And if there was a reason, how can you argue that it is not there today?

There is a lot to be said about the individual desire to “be seen to do what is right”. A manager who is asking to employ staff today is not going to be the run-of-the-mill individual. Asking for money in this environment is difficult – especially if your department is dependant on other departments to generate money (and therefore there is no direct ability to show profit generation and ROI to employing someone). The same goes for your hotels. In a market that will suffer for several months to come, it is difficult to justify investment in people, marketing efforts, or anything without tangible and quick results.

Spending money in a recession is difficult. It goes against the grain as it were, and it requires satisfaction of certain criteria.

First, all this ability to act when everyone is freezing up, requires very deep pockets. Having the money available in the first place is – and will remain – the single most important factor in any business decision of our times. This is the single caveat that is both an insurmountable difficulty if you happen to be on the side of the non-haves, and a massive competitive advantage if you happen to be on the side of those that have it.

Interestingly thought, the actual size of the pockets is relative to the control of the funds (lets call it “having long hands” – as everyone is making up clichés these days, I can’t see why we shouldn’t).

So the second ability you need, is to reach this cash and be able to use it as you see fit. A board of directors in a company that is uncertain about its future (where things may or may not be bad) is probably waiting for the next term reports to find out what the future looks like before they even make a decision. They are naturally likely to be more reluctant in investing than the single company owner who has closer control and  understanding of his business. So, access to the funds is key.

The third ability in question is to see and understand the opportunities around and ahead. A hotelier who manages to choose the right time to contract and refurbish his property when a supply of contractors is abundant and simultaneously worried about their cash-flow, is going to get a good deal. If he manages to time the completion of the refurbishment with the end of the crunch, he has minimised opportunity costs generated by the refurbishment. And that is opportunity costs not only with the suppliers but also with reduced room-stock in an environment where he would need them again. Nobody has a crystal ball of course, but nobody is talking about surgical accuracy in the timing either…

Look around you today. These are indeed hard times, but they will pass. If you are a sceptic that is worried about catastrophic downturns, think of human nature – not always pretty, but the single point of stability and continuity that we can all count on. The western world is now used to good times. We have tasted holidays in the Caribbean, Asia and Orlando, and we are not really prepared to give it up. We will cut down on the distances of our travels, but Turkey, Greece and Spain are only perfect for repeat holidays for a certain type of traveller. Most of us will long to see the world again.

So people will travel again, and with the passing of the hard times, there will be companies that will come out on the other side stronger. It will be those that you see today spending on longer term projects. Companies that are currently employing the best people, not because they really, really need them right now, but because they know they will do soon. These are managers that understand what counts, and drive improvement and increases in efficiencies. People who know what advertising in a quiet market can do for their product, and how far their dollar will take them in these times.

Today, normal business activity, sales efforts, removal of travel suspensions, and visiting of clients face to face, are very likely to not be signs of indulgence. They are signs of efficiency and potential.

So, if you do have cash for a long term investment, and you want to buy stocks that will perform better than average in the next few years, just look at your future reservations. The companies that you see there, are the ones that will be in the stock markets next year. And the year after that.

Yannis Anastasakis

eHotelworks

* I will indulge in a small deviation here to declare my genuine respect. I usually don’t have very much time for difficult people. Yet, Mrs Green was a one in a million, and one guesses she had to be tough in a tough environment. Also, I think that anyone who chooses to talk about her children when addressing economists, and particularly some 150 years ago in a world where women were generally expected to not be seen in business, is showing signs of brilliance. This isn’t just a lady that proved herself to be an independent thinker. She became an independent thinker in a world where she – as a woman – was expected to not personally manage her vast wealth. In fact, I would go as far as arguing that this quote is summing up her personality best, because it shows an underlying, sublime sarcasm directed to the male establishment. There she is, telling them that she is having the time of her life, exactly when they are absolutely not having fun, and – oh yes – she is a mum too, and what she does so much better than all the men, is not even what she loves the most… brilliant!

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ppc looks so much better than seo… and yet, it doesn’t

It isn't always easy to be seen

SEO - especially in the context of multilingual markets - is by far the most efficient way to achieve online presence for a hotel. You just need to take the long-term view.

SEO actually always bothered me. And from what I have seen so far, the chances are that it bothers you too! The reason? Its nice looking, clean-cut, always on time, reliable sister: Pay Per Click.

A few years ago I was selling electronic media advertising. Back then, GDS advertising was by far the largest contributor of revenue to the company (and my sales figures) but internet advertising was also just starting to take off. Even in those days, for those clients that ventured off to what was then uncharted fields of internet campaigning, there was a very clear gravitational pull between a Director of Sales and PPC.

You see, once the PPC campaign was turned on, the customer was practically hooked in this neat little machine where we would put a pound coin in one side and anything between a 10 and a 20 pound note would come out on the other. This meant that sales would grow for everyone, and that kept everyone happy. So happy in fact that it was very, very hard to convince a hotelier to consider investing their money on anything else on the web. In a very obvious way, SEO was the victim of PPC. Of course this was not the case because it was ever given a fair chance, but because it never had a chance.

And in a way, back then that was OK. These were the days that PPC was the newest buzz-word and the most complex presentation you could do was to explain what PPC was, talk about click-throughs and tracking..! Customers buying into PPC were practically on the cutting edge and their ROI was almost guaranteed to beat 15 to 1. Who could ever argue with the figures? Not that I wanted to argue anyway as (as I have already mentioned) I wasn’t that comfortable with SEO.

Although I had a fairly good idea of what it could do, there were a few things about it that didn’t like. Without going in to detail on this, I thought SEO was always too vague, lacking saleability in the specifics department.

The inescapable fact – and what makes search engine portals such profitable business for their owners – is that Pay Per Click, when done in a half-decent way, works. When it is done properly, it is sensational.

For the untrained eye, a comparison between the two was almost unfair! PPC is tangible, responsive and an accountable investment. SEO was (and still is) largely seen as non-accountable, intangible and (by comparison to PPC) takes a long time to kick in. Additionally, SEO was more difficult to grasp all round. Apart from providing me with difficulties when I was asked “what will you do for me exactly?” (try to explain why Alt Text or Headings are important to a non enthusiast and you will see what I mean), it was also difficult after all the work was done since results take time. With hoteliers only knowing about PPC, the delay was frustrating for them.

Pay Per Click was always clean cut and (very much in line with Caesar’s famous request to his wife) isn’t just truly honest; it also appears to be honest. When it came to first impressions, PPC always had a firm hand-shake and came to the job interview with impressive, tangible and provable success stories. SEO was the person that turns up late, looks shifty, you don’t know what she has been up to, and you know that most of your competitors wouldn’t employ her. It all practically makes you want to shake a finger in front of her face and ask in a fed-up voice why she can’t be a little more like PPC.

For better or for worse, and as it is always the case with emerging technologies, things have now changes a lot.

One thing that has changed for sure, is the hoteliers themselves. I can tell you with a great level of certainty that one in every two clients I meet, would give any uncertain e-marketing salesperson a life-changing scare. Today it is easier to talk about concurrent website monitoring than it was to even mention organic vs. paid-for listings some ten years ago. More savvy hoteliers means that the more difficult concepts can now be explained and sold where appropriate.

Another thing that is changing, is that the entire marketplace of on-line advertising. The battle for the right keywords is now a science. A good friend of mine is starting this month his PhD in UCL on applied mathematics and algorithmic trending – which will basically train him to write programmes that calculate the mood of the surfers, practically identifying not just the current SEO trends and customer wants, but also to predict future ones. And some heavy-weight player will employ him to do SEO work, whilst a lot of hoteliers out there aren’t even looking at SEO yet. Unlike PPC, SEO gives early entrants massive advantages – which means that those that go early will remain ahead of the pack for a long time.  In PPC, when a keyword becomes expensive for you, it is equally expensive for everyone (and richer players have more room to push you out). In SEO early entrants have the advantages and it will take the richer players a significant amount of disproportionate effort to push you out of the way.

Finally, I have definitely changed – especially since SEO and I were properly introduced. And this is one acquaintance that I can’t recommend enough.

Today, I find myself arguing that SEO is exactly where hoteliers needs to go. The varying degrees of understanding it, and its much weaker image behind PPC are indications that much fewer people in the industry are trying it out. And those that do? Given that there isn’t a small number of companies that would charge peanuts to undertake it (and deliver work of equivalent value), one must assume that on average the work that is done, isn’t done as well as one would hope.

All these challenges mean one thing. This is virgin territory – an arena that draws from tangible no-black-hat sciences like consumer psychology, mathematics, economics and principles of demand and supply – where if you are making any effort, you are already ahead of the game. This is the market to be in – every time.

Yannis Anastasakis

eHotelworks

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Filed under eCommerce, Hotels, Marketing, Pay Per Click, Search Engine Optimisation

Behavioural difficulties and the multilingual antidote

A global marketplace, however close and intimate it might be, is still global and complex

Tim Ash, in his very interesting book “Landing Page Optimization” (1) briefly – but always eloquently – summarises the difficulties associated with identifying the type of user that visits a website. In fact, the entire on-line commercial world seems to be struggling with customising their websites to match their clients expectations. It is almost unfair how mercifully privileged we – the hotel industry professionals – seem to be when it comes to knowing our visitors. With very little effort, we can know so much about our on-line visitors, before they even turn on their computers.

The very simple and obvious fact that sets us aside from most of the rest of the electronic marketing world is that with even a single property, we can (and should) organise our electronic marketing efforts in the same way that otherwise only multinational corporations could! For we have one great, merciful advantage: Travelling is all about people coming from far away and looking for something that is similar to our specific product. Knowing the source, and the product requirements is so useful, that it would be greedy to wish for more!

If you are reading this article, you are most likely the interested-enough type to know that the statistical and even geographical data that you can get from your web analytics engine is wonderful. Nevertheless, knowing what an individual first-time visitor wants is something that you either never find, or something you will find out well after they have left your site – most frequently without having made a booking. In most other industries the game is then usually played with the painful gathering of statistical and usability information and the drawing of conclusions over time.

Statistical analysis and usability reporting (quality work can help ensure that you bypass the dangers highlighted in the well known cliché claiming that “in this world there are lies, there are damned lies, and then there are statistics”) is a solid and scientific method of measuring results and basing design decisions. In fact, those rare birds amongst us that have the budgets, run concurrent websites measuring visitor behaviour in each of them, which leads to some solid designs, based on what really works best for their clients.

Despite all this being a really, really good way of approaching the best possible website layout and structure of what is called landing page optimisation (the promotion of the flow of on-line visitor action, so that they end up doing what you want them to do), the fundamental difficulties remain when you want to open up your hotel to new markets. Increasing numbers of new visitors is easy – yet not the actual goal. The trick of the trade is exactly on this point – not just getting them to come, getting them to book too. And for that, it would be wonderful to be able to optimise your website so that the additional visitors you have just brought over, actually like, trust and book your hotel.

Behavioural enthusiasts will often go down the route of applicable psychological models, or “behavioural styles” like those of Myers-Briggs or Keirsey-Bates (2). The idea here is that accepting there are several specific types of visitors, will get you a guideline that will allow you to address different types of needs and wants through different designs.

Despite this sounding like a really clever way of driving incremental conversions of lookers to bookers – there is a certain impasse (actually two) that make things disproportionately tricky.

First, these  models have to remain fairly crude to allow for applicable website-related decisions to be taken and implemented. This means that for you to have something specific to ask from your designers that will help them understand your website is aimed at getting more business, and not just have cool stuff on it, your potential online customer base has to be placed in psychological “pigeon-holes”, usually reserved for extreme personalities. So, when most of us would fit somewhere in between, reality is forcing us to use caricature-like personalities.

A an example comes to mind which is constructed on imaginary scales, but which should help pin-point the difficulties we have here:

Think of visitors to your website as “30% workaholic” or “45% independent thinkers” and you will get the picture. We have given a percentage of “workaholic” and “independent thinker” to measure “normal” visitors, but we still have no way of accurately designing specifically for these people. We can make efforts and gestures, but we can’t be sure. An analysis of our visitors on these imaginary scales (lazy – workaholic and dependent – independent thinker) would probably end up sending us to our website designers with a brief asking for a website for rather lazy people that are rather dependent thinkers. Assuming that our website designer can do something to satisfy our brief (which is very unlikely to say the least) we have clearly not addressed our audience very well. It is arguably going to be better than what we have done so far, but the cost-benefit ratio of actually changing our website is going to be tough to argue with the GM when we are asking for the money to pay for all this…

The conclusion is inescapable. It may be intelligent, complex and all in all down right impressive pigeon-holing, but it is pigeon-holing nonetheless. Any such crude segmentation will generate psychological profiles with diametrically opposing wants and needs. So, you will know that your visitors have different needs, but it won’t be easy to know which to go after – let along how to go after them. Imagine for example that you have very similar numbers of Extrovert and Introvert users, as well as Thinkers and Feelers (both scales from the Myers-Briggs psychological types). What would your brief be? And even if you don’t you still won’t immediately be very certain how to address their different needs (if you are doing this for the first time it will take time and effort for you to find out).

Naturally, with psychology and consumer behaviour having been around as academic subjects so much longer than internet consumer behaviour,  there are theoretical alternatives; but when viewed from the angle of “having to do something with your website to influence them” all segmentation approaches become somewhat unrealistic.

Even if you are an avid fan of behavioural modelling, and you completely disagree with my views here, you will most likely still agree with the second, rather more tangible impasse in question.

Doing it properly often means doing it the expensive way. Conducting market research on your visitors, be it with questionnaires (brrrrr), or through concurrent running of multiple versions of your website, or in any other way, will require the involvement of experts and time. In other words, it will not be cheap to do. So imagine the conversation between the keen hotel DOS when he or she is asking for the budget from the GM.

Additionally, there is always a very, very good chance that when the analysis is run, the resulting recommendations will require additional investment. I can see Expedia doing something about offering something to make their extrovert customers feeling at home on their website, but I can’t see the same happening at a 3 star independent hotel around the corner…

As it is often the case, the travel industry – in its usual idiosyncratic manner – will once again throw us a surprise. This time, it is a good one. To fully identify its value, we have to have a quick look at the theory and practice of the basics:

The theory of marketing suggests that you look at the market, and you create a product that will satisfy a niche.

On the other hand, the reality of a marketing is that almost invariably you are given a job “pushing” an existing product, and you have to figure out who is most likely to buy. Then, the battle is to find a way to communicate to them efficiently. With most hotels being built and designed before their internet strategy is formulated, the reality scenario is almost always the way things are done…. But that is OK, because in our industry, we know our customers are coming from somewhere else.

This simple fact – speaking from the point of view of the internet marketer – is the equivalent of gold-dust. The power of that knowledge can give us remarkable agility and accuracy. It is an advantage over most other products and industries, and one that can produce profit.

Each country usually comes with its own language. Consequently, each language is a tool to address each country. Given that we have some good information on the vastly different needs and wants of each culture, languages – or more correctly multilingual websites – can be superb conduits for each hotel to touch different markets with unparalleled simplicity and accuracy.

With multilingual websites, there are simple steps that you can take to make reasonably certain that you are going after the right people, whilst cutting down your costs.

In the hotel world, you know your product and you can easily see the origins of your market’s visitors. Rather than having to wait for your visitors to leave your site before you can start aggregating a general view of how they think and what they are looking for, you can put experience to work well before you start devising your individual messages for each segment. If your market doesn’t get any Chinese visitors (frequency of direct flights from/to China at the nearest airport would be a good guideline if you are not in the middle of a metropolis – not to mention the multitude of reports like the absolutely excellent Hotelligence by Travelclick) you probably don’t want to re-built your site in Mandarin – at least not before you build it in the more urgent languages (those of the international visitors to your area).

Apart from the obvious simplicity and applicability to our industry, and the consequential simplicity of the brief to your designers (e.g. I want a website for German and French travellers), international multilingual websites are a triple win for hotels that implement them.

First, you get to offer your international visitors a tool that will allow them to book from the comfort of their own language. Few would argue against the benefit of offering such a convenience to their international travellers (according to some studies, up to 70% of hotel bookers would prefer not to have to make a booking in English). If your CRS allows for the language, the market can be very easily reached and their need satisfied.

Second, you get to have your website seen in countries where you would otherwise be invisible. With search engines in each country behaving pretty much like right-wing extremists, a site that is in the language of the country (when done properly of course) will have massively higher chances of coming up and being seen than a website based in another language and country. This is absolutely true even when someone is looking for a specific hotel’s name…! This doesn’t just drive the visitor to you, it pulls him away from the local on-line agencies that will invariably capture this traveller, for the usual high percentage costs – and of course the infinitely higher risk that the booking will end up in one of your competitors.

Third, you have a wonderful tool in your hands to market to each country separately. A Mandarin website will be a great place to offer an appropriate message during the Chinese new year, without taking prime space away from the British and American travellers who can be offered a .co.uk and .com website respectively. Imagine the ability to promote per country… your toll free telephone numbers to the Russians and Greeks (who don’t like to use credit cards), your best rate guarantees to the Americans, and your Halal cuisine to the Arabs.

There are surprisingly few companies that will offer multilingual SEO (and not just claim that they do it once asked) from the world go. It (multilingual SEO) and International PPC are vital to your success and will be one of the fastest growing trends for the years to come This means that the early entrants will have similar benefits to those that had a website sooner than the rest so prompt action will yield good results.

Please accept our best wishes and kindly do remember to let us know if you think we can help.

Yannis Anastasakis

electronic Hotelworks

1. Full Title: Landing Page Optimization – the definitive guide to testing and tuning for conversions, Copyright © 2008 by Wiley Publishing, Inc. Indianapolis, Indiana

2. Ash’s Landing Page Optimisation provides great summaries for those as well.

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