By Tris Heaword
Many people have a natural tendency to procrastinate, choosing to put things off until the very last minute. But in the world of e-commerce, brands work tirelessly to convince customers that delaying a buying decision isn’t a good thing. This is something commonly achieved by creating a sense of urgency.
Studies conducted by internet-based research lab MarketingExperiments have found that urgency can have a huge influence on conversion rates. One of their tests resulted in a staggering 992% sales uplift.
So why can urgency have such influence on buying behavior? Without it, customers know they can delay a purchase, confident the exact same product or service they’re interested in will be around whenever they choose to return. Urgency removes that certainty. It gives customers a specific and compelling reason to act now. And when it comes to the hotel booking space, urgency is an especially powerful tool for driving conversions.
But while OTAs have embraced urgency as a sales tool, most hotels have not. This point of difference has undoubtedly helped OTAs dominate direct bookings, and yet such tactics are easily replicated. With that in mind, here are just a few ways hotels can harness urgency and make it the heart of their own user experience.
Brands use time-based urgency all the time. By creating exclusive promotions and offers with specific end dates, customers are motivated into making a purchase by only having a limited window to benefit from a special rate.
The effectiveness of limited-time deals can be altered by a number of factors. The duration of the offer is a big one. If a promotional rate is available for a fortnight or a month, the motivation for a customer to act quickly is very low. But an offer that’s only around for days, hours, or even minutes instantly ramps up the urgency.
The frequency of limited-time deals is also significant. Used sparingly, they retain a sense of exclusivity by virtue of the fact they’re not available very often, which naturally makes them more appealing. In contrast, if a customer knows another “great deal” is just around the corner, they’ll be far less inclined to rush into parting with their cash.
How the OTAs do it
Instead of attaching an end date to offers and deals, OTAs have started introducing countdown timers to let customers know exactly when a promotion ends. Expedia uses this tool to boost conversions of their “daily deals.” In the example below, a countdown clock ticks away to the end of this daily offer.
Just like having a specific time period to react, when a product or service is in limited supply it instantly becomes more desirable. So letting customers know that the thing they want is dwindling in availability can force their hand, motivating them into purchasing something quickly before it runs out.
This is an example of urgency being created through scarcity. In social psychology, the scarcity heuristic asserts that people place greater value on an item when they think they might lose out on it, especially to competitors. In the hotel booking space, scarcity can be a particularly powerful due to the fact that when people search for a hotel room, they generally want it during a fixed period of time.
How the OTAs do it
Priceline.com is a great example of how stock availability and a sense of competition can be used to incentivize bookings. In the example below, potential bookers can see how many rooms are left for each hotel. Also frequently shown on these sites is the number of people looking at the same property. With limited rooms and lots of potential bookers, customers are reminded those remaining deals may get snapped up soon. There’s also no way of knowing if and when other people “watching” the room might book. Arguably, this can help trigger conversions by creating a form of anxious uncertainty in the minds of consumers: “The room I want could go any second, so I better book now.”
As well as using time and stock scarcity, urgency can also be built around FOMO: the fear of missing out. During Black Friday sales, people queue for hours to beat the crowds and get their hands on a product before anyone else. In these highly competitive situations, the desire to get a great deal is overshadowed by the fear of missing out.
This elevated pain of losing out also has grounding in behavioral economics, defined through the phenomena known as loss aversion. In fact, it’s believed that the psychological pain of losing something is around twice as strong as the pleasure derived from a gain. This psychological quirk is often played upon in direct sales. Instead of focusing on what customers can gain, brands remind them what they might be about to lose.
How the OTAs do it
OTAs frequently use fear of loss language around booking pages to trigger an emotional response, an approach expertly used by Booking.com. They overload their booking page with constant reminders about losing out. “You missed it” and “last chance!” leave customers in no doubt as to the risky nature of delaying their decision.
Hotels.com also use fear-of-loss language at the final booking stage to reinforce the gamble of not acting fast.
Hotels must also create urgency
While OTAs have mastered the art of urgency, hotels can replicate these same tactics for their own gain. Within the website or booking engine, strategically placed messages, such as the “Only 2 rooms remaining” message below, can help to illustrate scarcity or limited availability. Other important features include strikethrough pricing to indicate a deal, as well as flagged messages highlighting special rates or offers, as shown in the example below from Mayfair Hotel and Spa.
Also important is the showcasing of popularity, which can instigate loss aversion. In the example below from Meriton Serviced Apartments, a banner highlighting the number of reservations from the last 48 hours, displayed prominently next to its TripAdvisor badge, indicates that the hotel is in high demand and that the traveler should book soon to avoid missing out.
No time for delay
In the OTA ecosystem, the language of waiting and the possibility of postponing are entirely removed from the booking process. By integrating a sense of urgency from the homepage to the checkout page, OTAs motivate potential customers to act swiftly, avoiding the risk of them potentially putting off a decision completely.
The good news is hotels can also harness similar tactics for their own gain. By using a variety of scarcity triggers, limited-time offers, and carefully worded copy, hotels can cultivate a different customer mindset: one that reinforces the benefits of quick decision-making and the potential costs of leaving a booking until the last minute.
Interested in learning how to apply OTA techniques to your own hotel website? Register to download our recent webinar with Tris Heaword and Steffan Berelowitz, “Designing a next-generation hotel website.”