Customer Segmentation – More Important than ever

Customer Segmentation has always been important. Although you have probably got by until now without thinking much about it, in a world hit by COVID, thinking about your customer segments is now more important than ever.

Let’s look at this simple matrix. You are the marketing manager for a hotel. On one axis we have the residential location of the guest. On the other axis we have their purpose for travelling: Business v Leisure.

It won’t surprise you that if your guests live locally (e.g. less than 3 hours drive away) and are travelling for leisure purposes, your hotel is probably doing relatively well at the moment (with the exception of Victoria). For example, hotels in the 2 hour band around Sydney, which include the Central Coast, Hunter Valley, Blue Mountains, Southern Highlands, and South Coast, are managing well at present. Residents in Sydney aren’t allowed to travel overseas or interstate, so they are travelling locally instead.

On the other hand, if most of your guests come from overseas, then you will be finding things more challenging. So what can you do about it? It is time to get creative. Think about what new customer segments might be attractive to your hotel. Then create packages for those segments and think about how you can market to them effectively.

Here are some creative ideas:

• Long term stays for travellers that can’t return home. You can afford to reduce your room rates – it is better to reduce your rates and get some rooms filled, than to have no revenue at all.
• Accommodation for medical staff who need to stay near a hospital
• Turn hotel rooms into Private Dining Rooms – this can work for private functions, and enables social distancing, with diners not being concerned about being in a large restaurant
• Turn hotel rooms into pop-up offices – this could suit employees who have to work from home, who need some quiet space away from their children

What creative ideas can you come up with?

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