I have written this article to share the answers to one of the most recurring questions of recent years that my formerfot colleagues ask me: why do I need to invest in Digital Marketing to fill a restaurant or hotel if things are going well?
I am Giancarlo De Leonardo, a former restaurateur and hotelier colleague. Today I am involved in developing the unexpressed potential of hospitality businesses still excluded from the digital revolution.
In these reflections, I share the path I am taking with companies to help them improve their business on a daily basis. Because if you don’t understand you don’t act or you act badly and for too many years I have been a digital illiterate.
In this article
- Why success can be a random event?
- Why success must be long lasting?
- Why success must be measured?
- Why success has a cost?
- Why success means differentiation?
- If today you think you don’t need marketing, tomorrow it might be too late
Why success can be a random event?
In almost twenty years spent in the hospitality industry as an entrepreneur and manager of restaurants and hotels, I have managed businesses that did well and businesses that failed.
The product was never the cause of failure, as Italy has an ‘unfair competitive advantage’ in the hospitality sector.
If I could go back, thanks to the digital skills I have acquired over the last few years, I would worry about Marketing, that is, developing the market in a scientific and methodical manner. And I would no longer settle for casual success.
One of the most important factors that can be decisive in filling a restaurant or hotel is the location: if you are lucky enough to inherit a business opposite the Colosseum or near one of the beautiful beaches or mountains, success is almost assured. Regardless. In this case either you were good at choosing that location or you were just very lucky.
Another factor that can determine random success is a weather factor. When I was the general manager of a beautiful tourist destination in the north of Sardinia, bordering the Costa Smeralda, the turnover of the hotel, restaurant or port was significantly affected by the fact that the summer was very hot.
The ‘fashion’ factor can also be decisive in some cases to fill a restaurant or hotel: in the early 2000s I opened a Music Club in Rome in the Prati area called The Place. In those years that district of Rome was very quiet, whereas today it is a district full of clubs that attract the Roman ‘movida’. Surely if the club had opened in the last 10 years it would have enjoyed a passing public that was not there at the time.
Among other causes of a casual success, there can also be that of a non-competitive competition that leaves you space for a certain period of time but then begins to promote itself and make up for lost ground. For example, I have many restaurant and hotel clients who, thanks to the implementation of an Integrated Digital Marketing system, are starting to gain market share that they did not have before, nibbling away at ‘competitor’ businesses.
Why success must be long lasting?
In the preface of the book I am currently finishing that talks about hospitality and digital, Chef Heinz Beck recounts that in the late 1990s, before opening Ristorante la Pergola, he did a market survey.
Many of the restaurants considered at the time (Relais Le Jardin, Alberto Ciarla, Quinzi e Gabrieli, la Rosetta, Checchino dal 1897, Camponeschi) no longer exist or have lost the relevance they had at the time.
‘Everyday is day one’ recommended Jeff Bezos to his most loyal employees while building Amazon.
In order for success to be lasting, one must never slacken off; on the contrary, in times when things are going well, one must invest in designing the future of the company.
Just think that the Kindle, Amazon’s electronic book reader, was the brainchild of Jeff Bezos who convinced his product manager to work on something that would compete with their own company, at the time the world’s leading seller of paper books.
Prevention is better than cure even in business!
But what does it mean to invest in the company’s future? Simple, it means surrounding ourselves with intelligent and reliable employees and thinking proactively, that is, making things happen, not being content with the current condition we are living in, but working on the one we want to live in the future.
Why success must be measured?
When a hotelier or restaurateur asks me: ‘why should I invest in Integrated Digital Marketing to fill a restaurant or hotel since I am already successful?
I have to answer: what does success mean to you?
Both when I was operating in the hospitality industry and now that I am active in the consulting sector, I realise that there are few managers and entrepreneurs who analyse and measure business performance professionally and with the tools that technology provides.
For example, I used to be content to measure the number of tables booked or the number of rooms sold each day.
Now instead I would shift my focus to the tables left empty or the rooms left unsold, because they represent an irretrievable daily loss.
Can one be happy to have lost money that we will never recover? Especially knowing that we do not work to limit these losses?
Except in the case of the restaurant La Pergola in Rome, where Chef Heinz Beck has had 3 Michelin stars for over 15 years and where one books four months in advance, in very few other cases have I found businesses that are always full.
For all businesses where money is lost on a daily basis, Integrated Digital Marketing is the toolbox at the disposal of enlightened entrepreneurs and managers who want to proactively and sustainably increase performance, especially to fill a restaurant or hotel.
So, just as the mechanics of a Formula 1 car set the car before during and after a Grand Prix, digital marketers can set the strategy and tactics to fill a restaurant or hotel.
And the most interesting aspect is that whatever action or investment you make on Integrated Digital Marketing can be measured against the results obtained.
Why success has a cost?
Another aspect that I cannot overlook in this analysis is the cost of success.
I often find myself talking to hoteliers who pay 18/20% commissions to OTAs (online travel agencies, such as Booking or Expedia) on the turnover generated on their portals which, in some cases, reaches up to 70% of the total turnover.
If a hotel invoices €5,000,000 a year and 70% of the turnover is generated by OTAs, that means it pays €6/700,000 in commissions. Madness!
With the mockery that the positioning of hotels is almost nil: to such an extent that if the OTAs decided to raise their commissions no one would be able to oppose them! In simple terms you are working for them, in fact you depend on them!
Is it possible that no hotelier can think of revolutionising this business model? A revolution that could start in a soft way by implementing ‘freelance’ resources capable of developing Integrated Digital Marketing actions aimed at developing direct bookings.
A similar argument could be made in the case of catering, which often relies on Quandoo or The Fork to increase the number of place settings. Easy solutions are within everyone’s reach and if you think this is the way to grow and establish yourself, I feel sorry for you as this is the road to mediocrity.
Why success means differentiation?
Beware of this very important concept: any customer arriving at your hotel or restaurant expects a comfortable stay or to eat well, indeed it is EVERY CUSTOMER’S RIGHT.
As long as we remain within a basic offer that meets the customer’s needs, the risk of negative reviews for not meeting the restaurateur’s promise is very high, while positive reviews will be few as no one likes to talk about normality.
When we start offering extraordinary experiences the discourse changes. The WOW effect is what makes one business excel over the others, it is that of the ‘purple cow’ as Seth Godin puts it.
Another characteristic of success is differentiation. That is why you need to work on your company’s corporate culture and ensure that it is developed together with exceptional employees. Only extraordinary people can deliver WOW experiences that amaze customers and lead them to become ‘natural ambassadors of the company’. That is why I always recommend treating your employees as you would like them to treat your customers.
Now you might think that packaging a WOW experience is difficult…. Of course! If it were easy, everyone would do it and it would no longer be a differentiator and would no longer make a splash. On the other hand, the entrepreneurs and managers who have adapted to this new way of behaving are still few, so there are plenty of opportunities to seize.
Are you ready to challenge yourself and step out of your ‘comfort zone’?
If today you think you don’t need marketing, tomorrow it might be too late
Imagine you want the classic sculpted ‘six-pack’ because summer is approaching and you want to show off your abs. Suppose an acquaintance of yours told you that he achieved this goal by training 3 times a week for a year. That is 12 hours per month for 12 months or 144 hours.
In one week there are 168 hours. Theoretically, if you manage to not sleep and optimise your hours, you could train the same hours as your friend and achieve the same goal in a week.
Do you think this is possible?
The answer is NO. And it also applies to digital marketing. No activity carried out in a short time, even with a large financial commitment, will ever achieve the same results as a daily, constant and lasting commitment.
Consequently, the advantage accumulated by those competitors who have already started virtuous paths with integrated digital marketing professionals will be difficult to recover.
What are you waiting for to start? Filling a restaurant or a hotel is not that complicated.
Article written by Giancarlo De Leonardo, former hotelier & restaurateur and founder of carocollega.com