John Wanamaker, founder of Wanamaker�s Department Store in Philadelphia, was the father of mass retailing in America.  He is famous for his statement, �I know that 50% of my advertising dollars are wasted, but until I find out which 50%, I�m going to continue to spend 100%�.  Now, thanks to the ubiquitous computer, and prudent marketing application, you�ll know which of your promotional dollars are working for you and which are being largely wasted.

All of these amazing new electronic geegaws and gadgets can be wonderfully productive tools.  Like my granddaddy used to say �Thar�s gold in them thar� gadgets�.  But unfortunately the gold isn�t being mined very efficiently.  Today�s computer networks are complicated and mysterious systems, but approached with insight, and simplicity, we can mine that gold, and we can make money doing it!

So put on your miner�s helmet, and follow me through LMG�s Seven Essential Components of Database Marketing. 

1.   Database Management

What is your most valuable marketing resource?  Your customer database.  Is yours getting the attention it deserves? 

For example, did you know that 20% of the U.S. population moves every year, making up to 50% of your current database outdated and NON-productive at any given time... YIKES!   Someone is paying through the nose for mailings that never reach their destination. 

It�s not rocket science, gang.  Your database MUST be kept clean, accurate and up-to-date or all the promotion in the world is only going to cost you more money for fewer responses.  When you spend a dollar on promotion of your property you want it to come back leading ten more by the hand, but you�re dead in the water if your database is not managed properly. 

No, you don�t have to know your guest�s favorite toothpaste.  Nor what kind of movies he likes, nor his favorite breakfast.  You need to know where they live, how they heard of you, why they booked you, how and why they travel.  Make sure you�re collecting the information you can put to good marketing use. 

This requires knowledge-driven segmentation of guests.  How are yours segmented?  Is it still by the rate they�re paying?  How about segmenting by their reason for staying.  After all, when you send them a customized, personalized letter, you sure don�t want it to read, �Please call when you�re ready for your next Rack getaway to Phoenix�. 

Who are your most valuable customers?  What is their lifetime value?  What are their most important needs, wants and purchase preferences?  What attributes distinguish your repeat customers from first-time guests?  You don�t have to pay for this information�it�s FREE, you only have to ask!  And then act on this gold mine of information in a timely, marketing-savvy way.  By the way, do your front desk agents appreciate the importance of getting this information?  And getting it right? 

Suppose for the moment that you have a five-room hotel and a core customer base of about 15 regular guests.  How would you speak to these guests, whether on the phone or in a letter?  THAT is the way you want to communicate with your entire guest database.  When your past guest hears from you he should feel like one person, YOU, are speaking directly to one person, HIM. 

Too many promotional efforts look like they were written by a committee to be sent to a �list.�  Hey babe, it�s not a list, it�s just you and me, one on one.  Your repeat guests particularly want to feel they are part of the family, as though your property has no other purpose in life than to wait for them to return to make your day.

Stay some time if you can at The Ritz-Carlton in Chicago (managed by Four Seasons).  When you return for your second visit, (and you will), the first thing the front desk clerk will say to you is, �Welcome back�.  Simple enough, right?  But it makes the guest feel like a million bucks.  And by the way, repeat guests stay longer and spend more. 

The guest knowledge you�ve attained now allows you to precisely pinpoint your markets and do targeted mailings to enhance your advertising, direct sales and public relations efforts. 

Let this be one of the guiding principles of your direct mail prospecting�it is just as important to know who NOT to mail to, as it is to know who TO mail to.  Your mailings cost money.  They must be targeted, concise, benefit oriented, and they must make a specific offer.  It�s not enough to say, �Y�all come see us, we�ve got a really nice place here�!  Create the right message to the right prospects with the right offer�and 
BAM�you�re spending less and making more.

The Pot of Marketing Gold?  How about a prospect request for a brochure, or a checkmark on a bingo card?  What you do with this, and how quickly you do it, determines whether that prospect becomes a future repeating customer, or whether you�re going to continue to spend money to generate inquiries from people who will never stay with you. 

You�ve got to get your cost down and your response rate up.  In the interest of space and simplicity, let me just say this.  DO NOT send the same packet with the same brochure to every inquirer.  Get all the information you can, then use it to send a customized information piece that features your benefits to the traveler, makes them an offer, asks them to take action and provides a convenient response mechanism. 
And take my word for it�it can be done on property, using your own computer system, and your own staff�and they don�t have to be �gearheads.� 

Don�t ever spend a promotional dollar prospecting unless you are confident you can accurately track every individual response, conversion, and the revenue generated from each mailing, press release, or promotion.  What you don�t want is to look at a spreadsheet full of numbers at the end of the year that shows you only the TOTAL promotional dollars spent and the TOTAL response rate. 

Measurement costs very little and saves thousands.  Start with your telecommunications provider.  They�ll supply you with a unique toll-free number for each ad, so you can precisely measure the calls it generates.  Secondly, train your reservations sales staff to ask the question on EVERY call, �How did you hear about us?� 

Again, it�s not rocket science, but it does require a marketing-oriented understanding of your database capability - how to use it, how to measure it, how to turn it into Marketing Gold. 

Aaaggghhh, Website Integration, the very name is scary!  What�s it all about, Alfie?

What does it mean, do we have to add an entire staff of Cyberfreaks to make ourselves competitive?  No way.  We�re talking about using your website to mine data, test offers and lead surfers through the booking process.

Data mining is critical.  Maybe 4% of visitors will actually take the next step to book your hotel.  So what about the other 96%?  Would they be interested in hearing about your next can�t-pass-it-up offer?  You bet they would (the qualified prospects, certainly).  So get their email address, and ASK them when and why they�d be most interested in staying with you.  Then send them the right offer at the right time. 

Website development, enhancement and updating require a Webmaster with the brain of a marketer (OK, maybe not the entire brain, but at least a little �right brain� magic, and marketing discipline).  Lead that surfer by the hand right into a sale.  Above all, DO NOT make the poor prospect crawl through three or four links to get to the meat of the offer.  His or her time is valuable, too, more valuable than yours as far as they are concerned. 

Marketing discipline properly understood and applied, common sense, good communication.  Your competitors are doing it, you should be too.  Just think how wonderful that Pot of Hotel Marketing Gold will look at your next P&L Review!