Hotel Online
News for the Hospitality Executive


Hospitality Sales Professionals -- How Many Referrals
Have You Requested This Month?

August 10, 2010 - If your answer was none, you are not alone.   It is a process that every sales person knows they should be doing but often feels awkward requesting or they simply forget to ask. 

“The objective in business lead generation is to woo prospective customers to try your product/service and then eventually convince them to buy your service/product for long-term use. One way to attract prospective leads is to advertise and send out newsletters via email. But the most effective strategy is by using referral marketing.

Referral-generated customers tend to be more open to your product. They require less convincing and negotiation. This may be because your product was not introduced to them by a stranger; your product was referred to them by their friend. “ (Fabian Tan, Blog & EZineArticles, 8/12/08)

In industries, like hospitality, where customers have a high affinity for products and services, referrals are the best form of leads. They close at higher rates, for higher amounts, with a very low customer acquisition cost. The people out there making referrals are the organization’s advocates and because of their ability to capture these valuable leads, they are an extremely valuable corporate asset.

In an economic environment where budgets are limited and the pressure is on meeting planners  to demonstrate an ROI on their meeting, they tend to use the reliability ‘factor’ – using a venue that they have booked before or asking a colleague about the hotels that they have used with which they were pleased.

How many repeat customers does a hospitality company have that would be glad to offer a referral to someone else either within their organization or a related organization?    They may already be referring your property but only when asked by someone else that has a similar need for the hotel and are focused on finding a reliable venue and sales person with whom they can book a group.
While all hotels and resorts have a small network of advocates that refer leads and drive brand awareness, the great majority lack a systematic and proactive approach to identify, grow and leverage their network to drive more referrals.   It seems shocking that this channel would be neglected in an industry where so many resources are spent on sales and marketing. However, there are some straightforward reasons why this gap exists: it was too costly, too hard to manage and most organizations simply did not have the expertise to do it. 

Companies in other industries have demonstrated that an organized, well managed referral system increases referrals by 300% when consistently applied over a period of time.  This is enhanced by the ability to reward the referee with a system of rewards.  The reward can be as simple as a Thank You note or a donation to their favorite charity in the case of ‘gifts’ being discouraged or banned by the referrer’s organizations.

Different segments of your current network, and more importantly the channels they can connect you to, are already talking about your business. By offering incentives, both monetary and non-monetary, this group can be grown exponentially. It is important to identify what motivates your network and cater to them. For example, most hospitality businesses already embrace Reward and Loyalty Programs for current customers in some form. If your business currently does not, now you have a system to offer some sort of reward/points for your clients, along with cash, discounts or free nights stay. Growth of this program can now be given a dedicated referral program to influence growth. 

The lead referred to the hotel by a satisfied customer is more likely to listen to the sales person and, even if they don’t book immediately, will remember the property, the sales person for future business or give a referral to other colleagues.  Wouldn’t you like to be able to reward them and say Thank You?!

Discover how your sales team can generate more productive leads with the URefer system. Our referral program software makes it easy to generate more referrals. 

For more information or a free demo contact Molly McFarland at uRefer, or at 734.585.5684.



Also See: Referrals - New Generation of Hospitality Sales Professionals Lesson #7 / David Brudney / May 2007
The Next Best Thing in Hotel Marketing … A New Tool To Harvest Referral Business / Neil Salerno / March 2010

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.