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Why Does ORM Matter?

You might think that ORM isn’t really a matter of importance. Even if you were to get a bit of bad feedback online, you could either let it blow over, or if you needed to you could try and redress the balance with some discounts and marketing activity, right?

Dead wrong.

The global trade bodies for the travel industry have researched this extensively, and they have found that reputation management could not be more important. The first thing to note is that hotel rooms are entirely price un-elastic according to the latest research from The Owners Association . What that means is that a slowdown in bookings due to bad reviews cannot be countered with discounts. Extensive research has shown that any increase in the volume of sales driven by discounts is nowhere near enough to recover the lost original business.

But it gets more important than that. Market Metrix report that “past experience, reputation, recommendations and online reviews...are now more important to hotel guests than either location or price.” Moreover, the World Travel Market report notes that 35% of hotel customers in 2010/2011 changed their hotel selection after reading about them on social media sites.

Most hotels generate the largest profit margin from corporate customers and business travellers; in this instance, Forrester research indicates that over 85% of purchasers in this segment consult social media and reviews before making their purchase decision.

In terms of the impact on detailed financials, the evidence is compelling. According to Expedia, a good review of 4.0 or 5.0 will deliver more than double the conversions of a review of 1.0 or 2.0. ComScore/Kelsey’s research found that when it came to hotels, customers were willing to pay at minimum 20% more, but potentially up to 90% more, for a property with five star customer reviews compared to four stars.

The matter has been studied academically, with a postgraduate thesis at the University of Las Vegas demonstrating it in raw financial terms, and demonstrating the importance of online reputation management beyond any doubt.

These statistics demonstrate that the online perception of a hotel is absolutely crucial to its financial viability. It therefore makes sense to invest just as much into online reputation management as you would into the facilities or the fixtures and fittings of your hotel; a good investment will always pay dividends, and so spending on reputation management should be seen in that light.

Moreover, investing in ORM supports your investments in other areas. Most hotels spend a substantial sum of money each year on advertising, marketing and promotional activities.

If you aren’t managing what people read about you online, then much of this investment may go to waste when people read something negative about your establishment; there is no point spending a budget on raising the profile of your hotel if that profile is tarnished.

Best Practices For Online Reputation Management

There are a number of ways that you can go about managing your online reputation, but there are a three golden rules that should be adhered to at all times:

Never ignore negative feedback. You can’t be perfect all the time, and you need to have a clear process in place for when people leave a negative review about your hotel. Engaging with the complaint in a clear, polite and positive fashion creates a much more favourable impression with potential customers than simply doing nothing. Never react in an aggressive or impolite manner, even if you feel the complaint or poor rating is unwarranted.

Encourage your customers to leave positive reviews. The simple fact is that customers are much more likely (possibly up to seven times) to leave a review or share their opinion if they have had a negative experience. So you need to be proactive in getting people to leave positive recommendations; if your customers say something nice to you then ask them to put it online. At the point of check-in and check-out, ask your customers to leave positive feedback if they have had a good time.

Whatever you do, don’t be tempted to try and game the system. Earlier in the paper, it was noted that several hotels have tried posting false reviews on websites like TripAdvisor, and there is now a growing list of hotels that have been blacklisted from online travel agents for such activities. In addition, there are a variety of shady companies around offering to ‘swamp’ or otherwise defray negative remarks about companies on the internet, by underhand techniques. Don’t be tempted, you will be found out.

Can You Do ORM Yourself?

In theory there is nothing to stop you trying to manage your online reputation yourself; you can register as a hotel proprietor on most sites, and address the customer interactions yourself. Similarly, you can manage your presence on Facebook and Twitter.

However, you should probably consider the following questions before you decide to do that:

Have you really got the time? Running a hotel is hard enough work as it is, and a realistic strategy for ORM could involve two to three hours a day. When you consider the amount of websites and social media channels involved, can you keep up with it all?

Do you know all of the channels that you need to manage? The scale of the online travel industry means that there are literally thousands of sites online, and many new incarnations being created every week. Do you have the knowledge to find them, and to track changes in the online industry?

Do you really know what to say and do for the best effect? There is an art to how to deal with people on line, and a range of techniques that can be deployed, like semantic analysis. Do you know what they are, or have the inclination to learn about them? How expensive and time consuming would it be to train your staff to do it?

You probably wouldn’t attempt to do your own accounting, or rewire your hotel by yourself; you would call upon the services of a professional. Online reputation management is just like any other technical service, it is far better carried out by a seasoned professional.

Given the importance of reputation management to your hotel, can you really afford to do this on an amateur basis? You should not look at it as an expense to be borne, but view it as an investment in the long term vitality of your business, that will have a positive impact on both the number of bookings you receive, and the rates that you can charge.

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Section 3: Dealing With Customer Dissatisfaction

No matter how well you run your company, sooner or later you'll have to deal with a dissatisfied customer. While all businesses should strive to provide good customer service, it's even more important to get it right if you aspire to be successful with relatonship marketng.

The key here is to treat every complaint like an opportunity to gain a lifelong proponent of your business. This is your chance to show them how different you are from other companies, and that you actually value them as a customer. Some of the most loyal customers are those that started out on a rocky foundaton but had their issue resolved in just the right way.

Most of the advice in this secton boils down to the fundamentals discussed earlier: actng less like a company and more like a person, while staying honest, open and respectful.

Respond quickly

An angry customer often has very little patence to sit around waitng for a response. They want their problem resolved, and they want you to make it your highest priority!

Being quick to respond is especially important if a customer is complaining openly on social media, as it may otherwise snowball into a huge mess that's very difficult to get out of. Just one customer with a large following on Twitter can cause a lot of damage to your brand unless you take the complaint seriously.

Also, nothing will impress a customer more than answering an e-mail or Twitter complaint within minutes. If you don't get a lot of complaints, try to keep your inbox open throughout the day and address complaints as soon as they arrive.

If possible, handle the issue yourself

Coming back to the relationship marketing fundamental of acting as a relatable person instead of a faceless corporation, you should whenever possible deal with the most difficult customers personally.

This serves two purposes:

It lets the customer know that you are taking his/her complaint very seriously

It gives you complete control over the process, leaving less room for poor handling of the complaint

Think about the last time you had to contact the customer service at a large company. How would you react if the CEO personally reached out to you, promising to resolve the issue to your satisfaction? You'd probably feel like you're important to them, and that they care about keeping you as customer.

Of course, in a large corporation the CEO can't be expected to step in and deal with every little issue, but taking an hour a day to deal with the loudest, most pressing complaints may be time well spent.

Leave your personal feelings out of it

This almost goes without saying, but you absolutely must not take any complaints personally. Even if the complaint is about your own job performance. If you can't remove your feelings completely from the situation, you risk making it worse with your involvement. Remember that it's (hopefully) not you as a person they're dissatisfied with, but rather the situation as a whole.

Even if you find the complaint to be invalid, it's important to still acknowledge the feelings of your customer. Maybe he or she is having a terrible day in general, and the tiny issue they're having with your product or service now represents everything they're angry about in their lives. If you can turn this into a positive experience for them, perhaps brighten their day a little, you may find yourself with a lifelong customer.

Stay honest and own up to mistakes

While some issues that arise may be due to circumstances out of your control, mistakes do happen and it's important to be able to admit when something is your fault.

This is another rela&onship marke&ng fundamental that we're coming back to. A company that is successful with rela&onship marke&ng is one that is transparent and honest with their customers. Making mistakes is human, and it makes your company all the more relatable if you can admit when you've made one.

Even if something really isn't your fault, it's important to let the customer know that you will do what you can to resolve it.

A great example is an online store, when a package is lost on its way to a customer. Technically, this is probably not your fault. But the customer doesn't care whose fault it is, he or she just wants it resolved. If all you do is blame the shipping company, never offering your personal assistance to inves&gate the issue, the customer will probably lose their confidence in you and your business.

Offer compensation

In a small business, every monetary loss hurts. This is especially true when a customer demands a refund, even if they're not technically en&tled one.

What you need to consider in this situa&on is the cost of not giving them a refund. Maybe they'll never buy from you again either way, but what will they tell their friends? What will they write in their Twi;er feed?

Usually it just makes more sense to offer a refund, maybe even some extra compensa&on on top if possible, just for the peace of mind. If they s&ll go on Twi;er to spew dirt over your company, you can just let everyone know that they have been properly refunded and really have li;le reason to s&ll be angry with you.

You'll also find that some of these customers will be so impressed by your generosity, they'll not only stay loyal but also tell their friends about you. In this case, a short term loss turns into a long term gain.