Carol Verret Consulting
100% Market Share Penetration
Carol Verret / January 2002
|Hotels often brag that they are running
100% market share penetration. If a property is positioned well in
the market in terms of product and rate, 100% market share is what you
get for opening the front door and not chasing customers out the back door
with poor service. Over and above 100% is the result of an effective
For example, a client said to me recently that the bad news was that one of his hotels was $50,000 down for the month over the previous year but the good news was they were running 117% market share and 125% Yield index. In markets that are declining it is still possible to run well above 100% Market Share so eliminate the excuse that declining market share is a function of a ‘bad market’.
A simple definition of 100% Market Share is that if your hotel accounts for 20% of all available rooms in a market and you received 20% of all occupied rooms in a given time period, you achieved your fair share of the occupied rooms or 100% of your fair market share. This appears on your Smith Travel STR reports monthly. However, you who may not have access to that report because you are in a small market that does not have enough properties reporting to Smith Travel to constitute a statistically valid competitive set or because you are not franchised or operate in a market with many independent, non-franchised hotels. In those situations, it is still relatively easy to calculate market share if the other properties will share their occupancies or if your area has a lodging tax.
Defined this way, it should be easy to understand why I say that 100% Market Share should be relatively easy to obtain. The other argument (excuse) that I often hear for maintaining less than 100% Market Share is that to do so would negatively impact the Yield Index or REVPAR Index. On the contrary, the opportunity to manage the revenue in order to maximize the Yield Index occurs when a hotel is running above 100% Market Share.
At less than 100% Market Share, it is difficult to pick and choose clients who fit your ideal client profiles (you did develop those didn’t you after reading last month’s article in this publication?). The hotel is accepting the business that comes to it rather than developing business that will be the most profitable for the property.
Going out and actively soliciting business is key to market share penetration. In any given market there few, if any hotels, that have their sales people out on the street asking for the business. The sales team will not totally know which clients fit their profiles without qualifying all of the businesses or organizations within their market. It is just as important to understand who does not have business for the property, as it is to know who does. A lot of time is wasted pursuing clients that have no potential for the property. That is a result of poor qualification techniques.
Once you have identified a prospect that you think may have business for you, do your homework. This is so much easier now with the resources available on the Internet. Log onto what you think may be their web site address or do a search. This will give you valuable information on the organization including the size, locations, mission statement or value proposition as well as key contacts. In some cases, especially with associations, it will also give you information on where they held their last meeting and annual conference. The location and the hotel that was used will tell you if they are in your ‘ball park’.
Going into an appointment prepared will impress your prospective client and give you some insight into how to approach them. The following are some of the questions to ask during the qualifying process:
The answers that you receive to the above questions will allow you tailor your property presentation to the prospects ‘hot buttons’ or the things that are important to them in making a hotel selection. The key to a successful property presentation is to know your presentation so well that you don’t have to think about what you are going to say next and not to dwell on features that are unimportant to them.
A wise man once said that a rising tide floats all boats. In most markets the tide is going out and not rising. Those properties that don’t mount a skilled and effective sales effort will find themselves beached. Attaining market share over 100% is about rising above the tide.
© 2001 all rights reserved
3140 S. Peoria St, PMB 436
Aurora, CO 80014
Web Site: http://www.carolverret.com/
|Also See:||The Key to REVPAR Recovery – New Business Development / Carol Verett / December 2001|
|Trash the 2002 Marketing Plan - And Just Start Over / Carol Verett / September 2001|
|How to Use Consultants Effectively – A View From the Other Side / Carol Verret / August 2001|
|How Soft Is Your Hotel's Economic Landing? / Carol Verret / Aprl 2001|
|The ‘Value Proposition’: Marketing Yourself to Prospective Employees / Carol Verret / January 2001|
|Generation Y: Motivating and Training a New Generation of Employees / Carol Verret / November 2000|
|Why Customer Service Seminars Don't Work / Carol Verret / October 2000|
|Creating a Culture of Customer Service / Carol Verret Consulting and Training / Sept 2000|
|FAT, DUMB AND HAPPY – The Seasonal Boom and Bust Cycle / Carol Verret / August 2000|
|Surf's Up - Ride the Wave or Miss the Boat -The Effective Use of Technology in Hotel Sales / Carol Verret / July 2000|
|Measuring Effectiveness of Hotel Sales Departments / Carol Verret / June 2000|
|Hotel Sales Training - The Need for Immediate Results / Carol Verret/ May 2000|