November 4, 2019
What is Return on Experience?
As a property manager, guests are the heart of your business. Most property management companies focus on achieving a specific return on investment. However, innovative companies are realizing the value of measuring and enhancing the customer experience. Return on experience (ROE) looks at how customer experience can be used to boost revenue for vacation rental property managers and owners.
In ROE, experiences are the new product. For instance, Volvo sells safety and not cars. IKEA sells people a better everyday life and not cheap furniture. People are interested in meaningful experiences that enrich their lives. If you do not take the time to thoroughly examine guest experience at your vacation rentals, you will not be able to keep up with the competition.
Why ROE is Important
Channel marketing expenses for property managers continue to increase. Most booking websites demand around 10 – 20% of the booking fee for new guests. If you are not generating enough booked nights from your marketing efforts, your property management company will suffer. That being said, you need to find ways you can increase the number of repeat vacation rental guests. You can do this by enhancing guest experience.
If you have healthy ROE, your property management company will also benefit from referrals. Happy guests will tell their friends about the experience. Repeat guests and referrals are more likely to book direct so you will not have to rely on third party booking sites as often.
How to Measure Return on Experience, ROE
- Positive Feedback from Past Guests
Guests of your establishment will leave feedback that will either attract or repel new clients. The feedback will either be on your website, local listings or booking sites, where potential visitors look before they book. Potential guests will also often receive feedback via word of mouth since happy guests often refer their friends and family.
Positive reviews push people to act and, in this case, choose your rentals. Guests who are new to the area usually base their purchasing decisions on the experience of others. If they see other guests had a positive experience with you, they are more likely to book your rental. Any negative feedback does the opposite of course however it does give your reviews credability and in some cases can reflect what kind of customer service you will provide to those who have had a negative experience. This is very telling to potential guests to what type of service they can expect. When it comes to getting reviews, remember that the end of one guest’s journey is the beginning for a new guest.
- Range of Activities Available
The era of providing an accommodation only is over. Now, you need to find ways guests can entertain themselves or be entertained while on your premises. You need to improve the quality of time spent in and out of your establishment. Appropriate activities are determined by your target market. For instance, if your establishment caters for families, look for activities for children. Parents seek out accommodations that cater to the needs of their children. Happy children mean happy parents. You’ll want to either provide or recommend fun activities for the entire family, and some activities exclusively for children, so parents can have a break without worrying about the safety of their children.
- Loyalty Programs
Another way you can enhance your customer experience is by introducing loyalty programs and gauging participation. Guests earn loyalty points when they return often, post a review, or choose to stay for a longer period. Through the program, you will receive additional reviews that can boost your rankings and promote your business.
All About the Experience
The most important factor to consider when calculating ROE is the feelings and emotional response of each guest. The better a guest feels, the greater the chances of them coming back and referring others to your property management company. Positive experiences lead to repeat guests and referrals. Forward-thinking property management companies are no longer solely focused on ROI.
Return on experience is the new ROI.