The Social Value of Hotel Guests

Business schools teach us that in Marketing, customer value is defined as the benefit we expect to receive from them through their purchases over the lifecycle of the customer–hotel relationship. To maximise the value of that customer, the strategies developed by hotel marketing professionals are always aimed at:

• Maximising our revenue, whether through marketing campaigns to drive sales, or through up-selling or cross-selling techniques, points-based campaigns, or even by applying Revenue Management techniques.
• Extending the relationship period, or customer lifecycle, through the application of management models based on quality and customer satisfaction, or through the implementation of loyalty programmes, whether in the form of points cards or any other system.

On the other hand, the costs arising from campaigns to reach those customers must also be assessed, so a customer we can reach at a lower cost will undoubtedly have greater value than another whose acquisition cost is higher, assuming that purchase revenue from both customers is the same. Customer value is a critical factor for any property—one that is not, in fact, given much consideration—but it determines how much it is worth investing in marketing to reach a particular customer. Unfortunately, this customer valuation criterion currently makes no sense, as it fails to take into account a customer's ability to influence others—one of the main characteristics of a world in which travellers enjoy such vast amounts of information and such extensive communication capabilities. It is clear that if a customer is satisfied, they are very likely to recommend that product to another five potential customers, meaning that the value of that customer would logically be five times higher than we would actually have calculated using traditional techniques. Conversely, if a potential customer is inclined to follow the recommendations of others in their own circle, it is very likely that our marketing actions towards that prospective customer will be completely ineffective and useless. Therefore, the social value of the customer, in Marketing as we currently understand it, is the increase in sales from third parties resulting from marketing actions directed at that customer as a result of their ability to recommend and the customer's social connections. I am not talking about opinion leaders, but rather ordinary consumers like any of us, with a certain level of connectivity, credibility and ability to influence the decisions of other individuals within their own social environment or social network. This is, of course, the traditional and well-known word-of-ear (word-of-mouth is something else). But internet marketing is leading us to apply online the actions that have worked in the real world for centuries.