The noise surrounding social media’s true value to the bottom line – the much-derided “social ROI” – has reached fever pitch recently, with some studies suggesting that many airlines have no ROI value for social. For hotels, fake reviews and an increase in the number of channels have challenged the industry to measure bottom line impact.
One resort, Australia’s Hamilton Island, has steadily worked towards a measure for their efforts on social channels, and offers an interesting counterpoint to the conversations regarding social ROI.
A fully-owned enterprise
Some caveats: the resort is owned in full by Hamilton Island Enterprises. The company owns all the hotels, restaurants and activity providers on the island, which makes it an extremely unique case study. It’s likely to be an outlier as far as impact, as they’re able to control all aspects of the guest experience, thus having very granular control over what leads to good and bad reviews in the social sphere. They are also able to quickly course-correct, as they are shepards of the full experience.
In addition, social channels for hotels also include review sites such as TripAdvisor, where one person makes a post that is consumed by another in a social setting. Facebook and Twitter are also important avenues for hotels to share their stories, provide information and engage potential guests.
Nonetheless, there are some interesting corollaries to the hotel experience on social channels that may prove valuable to a certain cohort of hotel revenue and reputation managers.
The importance of social and guest reviews
The marketing team at HIE began to realize the importance of tracking guest reviews in early 2011, eventually signing up for online reputation management software RevinateÂ to more seamlessly track social media and review feedback.
HIE’s Online Marketing Executive, David Tan, realized at this point the true value of the traffic arriving via these social sources.
“When I looked at all the data, there was no doubt that monitoring and managing online reviews made absolute business sense. Google Analytics showed a number of bookings involving TripAdvisor, and I realised that focusing efforts on guest review sites would pay off.”
By taking advantage of the collaboration tools available to them, the HIE team collaborates on responding to each review internally before bath processing the responses each Wednesday. By taking the time to talk about the reviews internally, the team ensures the reviews are consistent, appropriate and relevant. The codified process also allows everyone to be on the same page and to take control of what is essentially an avalanche of information.
Increased focus brings increased traffic and revenue
The team’s increased focus on guest reviews and social monitoring led to a substatial increase in inbound traffic from sites like TripAdvisor.
Compared with the same period in 2011, traffic not only tripled from TripAdvisor up to this point in 2012, but also direct revenue from TripAdvisor,Â as tracked via the Multi-Channel Funnels on Google Analytics,Â has doubled in that same period. So there has been a clear benefit to quick and comprehensive responses to reviews online.
“We have found that for every one booking made directly through TripAdvisor, another two direct bookings on the website were influenced by TripAdvisor because TripAdvisor was a stepping stone on a path to them finally converting.
In some ways, this billboard effect makes sense because people look at hotel reviews when they are in the middle of the sales funnel. They are planning a holiday and probably have an idea of where they want to go but they are open to recommendations from friends, family or people like them.”
The billboard effect
The billboard effectÂ refers to the phenomenon where hotels see increase bookings via direct distribution channels simply by virtue of being listed on OTAs. The concept is fitting here, as travelers often look to social media and online reviews to inform and narrow down their choices before going directly to a hotel’s website to book.
David explains that this effect is especially powerful with sites like TripAdvisor, where conversions can be directly measured.
“Weâ€™ve found that social media amplifies our traditional marketing & PR campaigns. Social media also allows our guests to share their photos and thoughts on our hotels with their friends. This leads to a kind of holiday-envy that drives demand for holidays to Hamilton Island from friends and family of guests. Social media is a very effective channel that we use to foster this â€śwish you were hereâ€ť effect.
Weâ€™re also in the process of adding a check-in function to our appto integrate social media more fully and increase the â€śwish you were hereâ€ť effect.”
Social ROI from the decision making process
Social media and online reviews are an essential part of this decision making process, and should not be undervalued. The process of determining a true social ROI from participation in these channels becomes difficult to measure when someone visits from Facebook and then subsequently books a hotel room directly a week later, especially as most resorts use last-click attribution.
“Using Google Analytics, we can see all of the different paths that visitors use to get to us and convert online. We can see that social media channels are rarely attributed conversions that they have been involved with because they tend to be part of the beginning or middle of the sales process and we (and most other companies) are currently using last-click attribution.”
For HIE, they approached this dilemma by looking at the patterns in which visitors arrived at their site.
“There is a tool in Google analytics called Multi-Channel Funnels that enables us to see which sources have assisted conversions (meaning that they werenâ€™t the last source touched before converting but they were part of the sales funnel).
Social media will generally have a high assistance rate and a low conversion rate because we arenâ€™t asking people to â€śbook nowâ€ť, we usually just want to influence their perception of Hamilton Island.
We are now attempting to put a dollar value on social media by assigning a percentage of any transaction involving a social media platform to â€śSocial Mediaâ€ť as a sales channel. However, because our assisted clicks attribution model is in itâ€™s early stages, we donâ€™t yet have enough historical data to make accurate assumptions as to how the growth of facebook fans is having an impact on our sales process.
We believe that thereâ€™s an ROI for social media but we donâ€™t have a robust measure of ROI yet.”
The ROI for other channels also comes back to the billboard effect, and how it plays into their direct bookings. Social channels are one avenue for marketers to track, and it’s essential that marketers first understand what the goals of a particular social investment will be.
Conclusion: Carefully track social/reviews just like any other marketing channel
Jeff Hill, a partner at Boston Consulting Group, points out in anÂ interview exactly how social must be planned for, and analyzed, like any other channel.
“Managers still need to embrace the complexity of optimizing returns on marketing by integrating a top-down strategic perspective on commercial investments with a rigorous bottom-up analysis. Nothing about social media changes that.
Social media is one component of the overall marketing mix. You need to think holistically about what you are trying to achieve. Itâ€™s never about just one metric. Itâ€™s just as important to have what we call â€śshared transparency and common currencyâ€ť around the objectives, the metrics of success, and the toolkit being used to produce those metrics.
Fads come and go, which is why a clear framework that helps you stateâ€”and then measureâ€”objectives in a common, shared manner is critical.”
The overarching lesson to be learned here is that “social ROI” is indeed possible, but each organization must first clearly define the goals of the social marketing promotion – and then follow through with clear analysis of key metrics that demonstrate whether or not the investment paid off.
State goals, define metrics, track progress and analyze results – this workflow is the key to marketing success in regardless of the chosen channel, andÂ systematizingÂ becomes exponentially more important as more variables are added into the forumla.