Why Your Hotel Needs Conversion Optimization…NOW
Why does this “conversion rate” thing matter?
Let’s do a thought exercise. Would you rather have:
- 100,000 visitors coming to your site, with a conversion rate of 1% → 1,000 bookings
- 50,000 visitors coming to your site with a conversion rate of 3% → 1,500 bookings
We thought so.
Now, let’s make the question a little more subtle (still oversimplified, but this is just a thought exercise). Let’s add an average cost-per-visitor of $2 and an average income-per-booking of $500.
- 100,000 visitors, with 1,000 bookings with a conversion rate 1% → (100,000x.01)(500)-(100,000×2) = $300,000
- 50,000 visitors, also with 1,000 bookings at a conversion rate 2% — which means we’ve improved the conversion rate even though we only generated the same number of bookings → (50,000x.02)(500)-(50,000×2) = $400,000
To spell it out: by improving the conversion rate, even though the end number of bookings was the same in both cases, you still come out higher because you didn’t have to spend as much on traffic generation.
That’s the power of the conversion rate.
What is “conversion rate” exactly?
It’s the rate at which visitors to your site take the action you want. For most hotels, that means bookings. Every time a visitor takes your desired action, that counts as a conversion. The conversion rate is thus:
Number of visitors who take a predefined action (like booking) ÷ Total number of visitors = Conversion rate
Since you can define conversion however you like, it doesn’t have to be bookings. It could be anything: newsletter signups, filling out a survey, participating in a contest, “sharing” or “liking” via Facebook, purchasing something you sell if you have an online store (e.g., spa products), and on and on. It just depends on the campaign you’re running.
What is conversion rate optimization?
Conversion optimization is the process of priming your site for increased conversions. It usually starts with an inventory of your current site and sales/marketing campaigns. It’s amazing how frequently hotel websites get in their own way: multiple, diluted calls-to-action; hidden booking widgets; confusing navigation.
At its best, conversion optimization also implements subtle, Web-centric sales psychology. You identify the ideal path through your website from a given point-of-entry to final conversion (the sales funnel), and you take the customer by the hand and lead them through it. You give them exactly the information they need, with the arguments that persuade them to convert immediately. You probably incentivize conversion somehow. The most powerful sales funnels combine compelling content with clever design and competitive offers.
In short, optimizing your conversion rate means making it simple, easy and worthwhile for your visitors to convert.
Why is conversion optimization better than boosting raw traffic?
Comparison of Marketing Channels, With Conversion Rate Optimization In The Lead. Source: http://www.seomoz.org/blog/8-predictions-for-seo-in-2010
First, it’s not always better. We can’t endorse a blanket, context-less statement like that. But it is almost always beneficial to focus on conversion optimization at least as much as traffic generation. Why? Just see our questions at the top of this post. They spell the answer out in numbers.
Or check out the infographic from SEOMoz, above, to see how Conversion Optimization compares to other marketing approaches. It should be noted, however, that Conversion Optimization is qualitatively different from every other line item in the infographic. While everything is about bookings, the other items are about traffic generation and branding. CRO is the only line item about increasing the rate of booking. Note that it appears to be equivalent to SEO or even less valuable on the balance than email marketing (because it requires more effort), but the fact is: if you implement CRO, every other line item will be more effective. That’s why it’s at the top of the list.
Remember that even organic search traffic costs money because your SEO efforts aren’t free. In fact, you are probably spending substantial sums of money on a comprehensive SEO campaign that includes content generation, link building, etc.
How do I get started optimizing my hotel’s conversions?
You’ve come to the right place! This is our specialty. Over the next few of posts, we’re going to talk about some specific techniques you can use to improve your conversions, including the use of landing pages and conversion testing. Our next post will take you step by step through creating a map of your sales funnels and figuring out what landing pages you need.
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