Making directory renewal decisions

[swirt]

This data really indicates some of the points I've been trying to get across. For instance, if we applied even a 10% conversion rate to these figures (which is probably low since they already take into account an action but is good enough to illustrate), then there would have been roughly 143 reservations from all of these sites combined. At $300 average rez (which is roughly the PAII figure reported across the industry), then all of this in total represents $42,900 in revenue in the innkeepers pocket. Clearly these numbers are not going to be exact, but if applied across all the sites/traffic, they work for comparison sake.
Isolating this for just BedandBreakfast.com and BBonline, then the BedandBreakfast.com reservations were worth $19,500 (650 actions, 10% converting into rez, $300/rez), and BBonline worth $8700 (291 actions, 10% converting to rez, $300/rez). Taking out the costs, BedandBreakfast.com put a net $19.5K - $750, or $18,750, and BBonline put in a total of $8700 - $169, or $8531.
So last year the innkeeper had $42,900 in total revenue from all sites, and now by dropping BedandBreakfast.com because it is "too expensive", assuming nothing else changes, they will only have total revenue of $42,900 - $18,750 (the net revenue generated from bb.com) or $24,150. Had they kept BedandBreakfast.com, and dropped the cheaper per click site BBonline, they would have ended up with $42,900 - $8531 (net rev lost from dropping bbonline), or $34,369.
So their wallet would have been a lot fatter by keeping the "expensive" directory.... (It would have been fattest by keeping them both I might add - which is what we always tell innkeepers. If I had an inn - you can bet I'd be listing it on more sites than just BedandBreakfast.com).
I used to work at an airline back in the early 90's during the last recession. We would cut costs like crazy... and I'll never forget some of the advice I got from a Sr. VP there. There was a lot of it, but two things really stand out. When we were cutting our routes back - he commented "great - our planes are all sitting down now - we are going to save ourselves right into bankruptcy..." because even though we were saving money on a lot of items - we weren't making money on them. And this thought really strikes home when you look at an analysis like this..

Your arguments are logical and make sense to me. The only problem is that the directory that cost $80 per year and resulted in 12 "actions"/goals and if as you approximate, 10% lead to 1 actual conversion could make a similar plea .... "Don't drop us, we brought you $300 for only an $80 investment." At some point you have to draw the line. So the question this innkeeper can now grapple with is do they want to draw the line at $20 per conversion or $3 per conversion or $0.51 per conversion.
It doesn't change anything about your argument but for clarification sake, the average advertised room rate is ~$120 per night for this particular B&B.
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Your arguments are logical and make sense to me. The only problem is that the directory that cost $80 per year and resulted in 12 "actions"/goals and if as you approximate, 10% lead to 1 actual conversion could make a similar plea .... "Don't drop us, we brought you $300 for only an $80 investment." At some point you have to draw the line. So the question this innkeeper can now grapple with is do they want to draw the line at $20 per conversion or $3 per conversion or $0.51 per conversion.
It doesn't change anything about your argument but for clarification sake, the average advertised room rate is ~$120 per night for this particular B&B.

Good point on the lower numbers - if I understand you correctly, you are saying there is some point low enough where the return may not be material, and there is a cost in time to deal with everyone = may not be worth it. Very important as you can run yourself in circles trying to find good advertising. I also think that conversion does drop off a bit with the quality of sites. Although it wouldn't surprise me if the 10% ratio was low for the main sites. It is pretty easy to wire this up to measure the true actual reservations and revenue from any site if the booking engine supports it (both Webervations has, and so has Rezo, as do sme others).
The $300 I was looking at was from a PAII study - it was something like $150/night, 2 nights per booking. I'm probably not getting it exact, but close. So I believe using your numbers that number would be $240 - as the typical action (email, res request, etc.) would generate an average 2 night stay.
Taking the logic a step further... this is often where the decision comes in whether to go with Silver, Gold, Platinum. No doubt the cost per click for this property would be lower for Gold or Silver - and it is telling that they are getting that much business from the lowest BBonline listing level...
So lets say they dropped to Silver at roughly half the cost of Platinum. There clicks will drop without question, but generally not by the same % of pricing. Which some might think that means silver is a better value. Indeed if you looked at CPC or CPA then a property would claim a victory - they dropped their effective CPC by 20%!!!! But if they looked in their wallet, they would find that they saved $375 or so on membership (approximating due to diff in yearly/monthly)... but LOST roughly $6000 in revenue... (at my $300 average rez cost for consistency). So they just "saved" themselves into losing a net $5600+ in annual revenue.
My point being that evaluating marketing spend needs to be both on the return on investment and on the marginal gain of investing that extra dollar. In the above example, an inn increased their ROI but at the expense of losing revenue and ultimately being much worse off at the end of the year.
This is the type of evaluation that I feel often gets ignored as the focus is on cost-cost-cost....
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I think it comes down to people having a finite idea in mind about how much they want to spend on advertising.
The question of platinum vs gold vs silver traffic is an interesting one. And again I think it all comes down to homework being done. The averages are too broad to help much. A town with only 4 properties half at platinum and half at silver I bet would see a pretty even distribution of clickthroughs without platinum being favored too heavilly.
Contrast that against a town with 30 properties with 5 at Platinum and I bet you'd find a much bigger difference in traffic between the levels.
The city from my sample has 38 properties on your site, 14 of them are Platinum (that's two and a half screens of Platinum). I bet there is a large disparity just between upper Platinum and lower Platinum.
Of course the way other end of the spectrum are inns who are the only property in the town and they go for Gold or Platinum .... I bet they would see no difference. (I just shake my head and wonder what they are thinking.)
(by the way, I'm not thinking the Bookingwiz . com popup is a good idea.)
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The city from my sample has 38 properties on your site, 14 of them are Platinum (that's two and a half screens of Platinum). I bet there is a large disparity just between upper Platinum and lower Platinum.

We currently rotate platinum every hour... so there is no upper or lower. A property goes up and down the list every day. We used to do it on every search up until last summer - but we got consistent consumer complaints that the order would change so often they couldn't remember who they were looking at when they did another search! This happens within every level.

Of course the way other end of the spectrum are inns who are the only property in the town and they go for Gold or Platinum .... I bet they would see no difference. (I just shake my head and wonder what they are thinking.)

In some instances this may be true, however it gets back to the marginal spending argument. For the extra few hundred dollars, if you are really evaluating your total dollar return on investment (not just your ROI %), then there is a strong argument that by presenting your property in the best light will reap benefits. With 20 photos, and all the bells and whistles of a Platinum membership, for only another $350-400 over a Silver - question is will you get at least 1-2 more bookings year? Presenting your property in the best light whenever possible may help you do that - and that is a profit maximizing decision.
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That's right, I forgot about you rotating the inns. Every hour is smart and fair. Good job.

With 20 photos, and all the bells and whistles of a Platinum membership, for only another $350-400 over a Silver - question is will you get at least 1-2 more bookings year? Presenting your property in the best light whenever possible may help you do that - and that is a profit maximizing decision.

Hmmm The difference being 10 photos vs 25photos on a town with only 1 B&B... I'd really like to see a split test done with that. I can't see that being worth the expense. Looking at your membership levels chart it seems that is the only difference on the guest side of things. Are their other differences I'm not thinking about?
It would be an informative test ... do you have a 1B&B town with someone at silver that you'd be willing to flip a coin every time the page loads as to whether they get silver or platinum display and then track the data?
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That's right, I forgot about you rotating the inns. Every hour is smart and fair. Good job.

With 20 photos, and all the bells and whistles of a Platinum membership, for only another $350-400 over a Silver - question is will you get at least 1-2 more bookings year? Presenting your property in the best light whenever possible may help you do that - and that is a profit maximizing decision.

Hmmm The difference being 10 photos vs 25photos on a town with only 1 B&B... I'd really like to see a split test done with that. I can't see that being worth the expense. Looking at your membership levels chart it seems that is the only difference on the guest side of things. Are their other differences I'm not thinking about?
It would be an informative test ... do you have a 1B&B town with someone at silver that you'd be willing to flip a coin every time the page loads as to whether they get silver or platinum display and then track the data?

It would take some work... plus they likely wouldn't have 20 photos in place so it may be difficult. We do however, have a number of cities with 4 or less listings, where there are both platinums and silvers. Meaning everyone is right next to each other in the listings - and this gives a good proxy. Took a look at the city-only traffic for those properties (no 2nd listings, ONLY traffic from that page), and the platinum listings received over 30% more clicks to their detailed listing pages, and over 40% more clicks subsequently to the innkeepers own website.
Now this isn't an exhaustive analysis by any means - I'd have to look at every city, but it confirms what we generally hear. In one city I saw in NH, the Platinum member got 5X the views and click-throughs over the Silver member... In no city did the Silver ever come within 20% of the Platinum.
The other reason people often forget is that if you want a secondary city listing - it gets listed at the same level - so if you are near a competitive larger destination, then Platinum makes even more sense.
Don't get me wrong though - I'm not advocating everyone just go out and buy a Platinum listing (although Eric might give me a vacation if you all do...), but that there is more to it than meets the eye.
BTW - one other thing in your stats. We sent an average of 65 email/rez requests (we let properties post a button if they want on their listings) per year per property. These are behind a captcha wall - so pretty qood quality requests. These would not be counted in your conversion numbers since they don't touch innkeeper website functionality.
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John said: BTW - one other thing in your stats. We sent an average of 65 email/rez requests (we let properties post a button if they want on their listings) per year per property. These are behind a captcha wall - so pretty qood quality requests. These would not be counted in your conversion numbers since they don't touch innkeeper website functionality.
Now here is a spot where statistics can be overwhelming skewed. I save all of the request emails I get to see if they convert. The last one I got from your site was in January '08 which means some other inn got my other 64 email requests.

Actually, what it means to me is that essentially no one is emailing me from your site for whatever reason and that to get that average, SOME inns are receiving well over 200 requests.
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Actually, what it means to me is that essentially no one is emailing me from your site for whatever reason and that to get that average, SOME inns are receiving well over 200 requests.

Or the email is broken or getting nabbed as spam. I just sent you a reservation request email to test. You'll be able to spot it 1 adult and 20 children for 200 nights
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Actually, what it means to me is that essentially no one is emailing me from your site for whatever reason and that to get that average, SOME inns are receiving well over 200 requests.

Or the email is broken or getting nabbed as spam. I just sent you a reservation request email to test. You'll be able to spot it 1 adult and 20 children for 200 nights

Only 50 nights...thanks, you've shown the link works.
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Actually, what it means to me is that essentially no one is emailing me from your site for whatever reason and that to get that average, SOME inns are receiving well over 200 requests.

Or the email is broken or getting nabbed as spam. I just sent you a reservation request email to test. You'll be able to spot it 1 adult and 20 children for 200 nights

Only 50 nights...thanks, you've shown the link works.

So now back to the original question, why aren't you getting the AVERAGE? (I am not either - I am batting a ZERO in the 4 months on bandb.com, so unless they come pouring in, I will not get even near the average John mentioned either.)
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So now back to the original question, why aren't you getting the AVERAGE? (I am not either - I am batting a ZERO in the 4 months on bandb.com, so unless they come pouring in, I will not get even near the average John mentioned either.)

Maybe all the Bronze listings (email but no web link) are skewing the results for everyone else. They can't get clicks to their site, so the only recourse is email.

Those numbers do seem pretty high to me.

 

[JBanczak]

Sorry - that was average per Platinum member.

 

[Morticia]

Sorry - that was average per Platinum member..

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?

 

[swirt]

Sorry - that was average per Platinum member..

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?
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Sorry, that premise was more toung-in-cheek than brain-in-head.

 

[JBanczak]

Sorry - that was average per Platinum member..

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?
.

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?

Bronze does not get an email or rez request button...

 

[Morticia]

Sorry - that was average per Platinum member..

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?
.

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?

Bronze does not get an email or rez request button...
.

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?

Bronze does not get an email or rez request button...

OK, so for the levels that DO have the link for email, how does it break down? ALtho, it probably isn;t a good comparison. If the Platinum level gets the most emails when there is a breakdown among the listings into different categories, that makes sense...see it first, email it first. But, if many towns only have a couple of listings, then those listings may not even choose the Pt level. They may stick with Au or Ag.
The only real info that would help would be to know the breakdown for the particular listing town. ie- In Albany, the Pt listings averaged 300 emails last year among them. The Au had 200 and the Ag had 50. THEN the info would help in decision-making.
Unfortunately, info like that might then be a good indicator of how well the competition B&B's are doing if the numbers are small enough.

 

[swirt]

Sorry - that was average per Platinum member..

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?
.

Sorry - that was average per Platinum member.

So does Swirt's premise that a Bronze level with no web link gets more email hold true? Or is it just the highest level that gets all the email?

Bronze does not get an email or rez request button...
.

Bronze does not get an email or rez request button...

The chart on this page shows all levels as getting the "secure innkeeper email program."

 

[Hangfive]

JBanczak said, "At $300 average rez (which is roughly the PAII figure reported across the industry), then all of this in total represents $42,900 in revenue in the innkeepers pocket"
I just love the way all these people from listing sites think that your gross revenue is 100% profit. Seems like any time I talk to one of them, they say something along the lines of "with only X bookings you'll recover what you've spent with us".
Granted profitabilty per room night is a grey area, if you have 10 rooms with 9 filled and one open, the 9 filled rooms cover most of the cost so by booking the additional room you'll realize a greater net profit per room night for the last room to book. Conversly if you a mom and pop with only 4 rooms then booking a room when you are empty may actually cost you more than being empty (utilities, your time & convenience, etc.).
In addition to the prevoius posts above, if you have a wide range of room rates you need to be concerned with quality of conversions. In other words were conversions from one site booking the less expensive or more expensive rooms in comparison with another site.

 

[happykeeper]

JBanczak said, "At $300 average rez (which is roughly the PAII figure reported across the industry), then all of this in total represents $42,900 in revenue in the innkeepers pocket"
I just love the way all these people from listing sites think that your gross revenue is 100% profit. Seems like any time I talk to one of them, they say something along the lines of "with only X bookings you'll recover what you've spent with us".
Granted profitabilty per room night is a grey area, if you have 10 rooms with 9 filled and one open, the 9 filled rooms cover most of the cost so by booking the additional room you'll realize a greater net profit per room night for the last room to book. Conversly if you a mom and pop with only 4 rooms then booking a room when you are empty may actually cost you more than being empty (utilities, your time & convenience, etc.).
In addition to the prevoius posts above, if you have a wide range of room rates you need to be concerned with quality of conversions. In other words were conversions from one site booking the less expensive or more expensive rooms in comparison with another site..

It is not easy to decide what to do, but I have reduced it to which sites consistently appear in the top 6 on the first page of common Keyword searches for google. We have had very little business from anything else. Hawaii has some differences that make mainland directories less effective.
We touched on this in another thread. On the mainland, these directories can often help, but in Hawaii- with such a strong presence from local directories, they seem to fade away. I don't have much to back this up, but I do think those directories that appear in the first 5 or 6 can do us some good. I think first page and second page can work better for individual properties because searchers start looking for them after the big names have come up, but for an directory to be on the second page here- forget it.

 

[swirt]

JBanczak said, "At $300 average rez (which is roughly the PAII figure reported across the industry), then all of this in total represents $42,900 in revenue in the innkeepers pocket"
I just love the way all these people from listing sites think that your gross revenue is 100% profit. Seems like any time I talk to one of them, they say something along the lines of "with only X bookings you'll recover what you've spent with us".
Granted profitabilty per room night is a grey area, if you have 10 rooms with 9 filled and one open, the 9 filled rooms cover most of the cost so by booking the additional room you'll realize a greater net profit per room night for the last room to book. Conversly if you a mom and pop with only 4 rooms then booking a room when you are empty may actually cost you more than being empty (utilities, your time & convenience, etc.).
In addition to the prevoius posts above, if you have a wide range of room rates you need to be concerned with quality of conversions. In other words were conversions from one site booking the less expensive or more expensive rooms in comparison with another site..

Good point Hangfive about the goofyness of profitability at the large and small end of things. It also comes into play for an inn with say 8 rooms. If only 4 rooms are booked, the innkeeper could likely handle the cleaning, but if they have 5 or more booked they may pay someone. Filling 5 rooms may actually cost them more than filling 4 or 7.
Each inn has to make up their own minds for what is right for their situation because the situations are so different.
Welcome to Innspiring.com and thanks for joining inn.

 

[JunieBJones (JBJ)]

JBanczak said, "At $300 average rez (which is roughly the PAII figure reported across the industry), then all of this in total represents $42,900 in revenue in the innkeepers pocket"
I just love the way all these people from listing sites think that your gross revenue is 100% profit. Seems like any time I talk to one of them, they say something along the lines of "with only X bookings you'll recover what you've spent with us".
Granted profitabilty per room night is a grey area, if you have 10 rooms with 9 filled and one open, the 9 filled rooms cover most of the cost so by booking the additional room you'll realize a greater net profit per room night for the last room to book. Conversly if you a mom and pop with only 4 rooms then booking a room when you are empty may actually cost you more than being empty (utilities, your time & convenience, etc.).
In addition to the prevoius posts above, if you have a wide range of room rates you need to be concerned with quality of conversions. In other words were conversions from one site booking the less expensive or more expensive rooms in comparison with another site..

Good point Hangfive about the goofyness of profitability at the large and small end of things. It also comes into play for an inn with say 8 rooms. If only 4 rooms are booked, the innkeeper could likely handle the cleaning, but if they have 5 or more booked they may pay someone. Filling 5 rooms may actually cost them more than filling 4 or 7.
Each inn has to make up their own minds for what is right for their situation because the situations are so different.
Welcome to Innspiring.com and thanks for joining inn.

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Good point Hangfive about the goofyness of profitability at the large and small end of things. It also comes into play for an inn with say 8 rooms. If only 4 rooms are booked, the innkeeper could likely handle the cleaning, but if they have 5 or more booked they may pay someone. Filling 5 rooms may actually cost them more than filling 4 or 7.

It is the same ol' thing we deal with when guests say "Gee it is your off season so the rooms should be half price" off season COSTS us to have guests in heating and expenses vs inn-season.
Welcome Hang Five

 

[Hangfive]

I also get the same off seasons questions. In the off season I close out my least expensive rooms until the more expensive rooms book. It's not cost effective to have the room/s with the lowest rates as the only room occupied. This year also seemed to be colder than normal, so if we did not have bookings when extremly cold weather was forcasted, we closed out the rooms. Just not worth it to run the heat and salt the walks for one room.
Regarding listing sites one thing I am trying to wrap my head around is how many potential guest see you listed on a referring site then at a later time find your site on a search engine. B&B.com and BB are placed 6th and 7th respectively for trafficsource. Google organic, direct traffic and Google CPC are in my top five sources for traffic. I feel that at least part of the Google and direct traffic must be from those who have found my site elseware 1st. I am also guessing that since the Google and direct traffic is mostly new traffic that many of these people are viewing pages at work then booking pages later from home or visa versa. This is somewhat confimed by the network locations for some of my traffic. Does anyone have any idea how to qantify the above?

 

[JunieBJones (JBJ)]

I also get the same off seasons questions. In the off season I close out my least expensive rooms until the more expensive rooms book. It's not cost effective to have the room/s with the lowest rates as the only room occupied. This year also seemed to be colder than normal, so if we did not have bookings when extremly cold weather was forcasted, we closed out the rooms. Just not worth it to run the heat and salt the walks for one room.
Regarding listing sites one thing I am trying to wrap my head around is how many potential guest see you listed on a referring site then at a later time find your site on a search engine. B&B.com and BB are placed 6th and 7th respectively for trafficsource. Google organic, direct traffic and Google CPC are in my top five sources for traffic. I feel that at least part of the Google and direct traffic must be from those who have found my site elseware 1st. I am also guessing that since the Google and direct traffic is mostly new traffic that many of these people are viewing pages at work then booking pages later from home or visa versa. This is somewhat confimed by the network locations for some of my traffic. Does anyone have any idea how to qantify the above?.

Regarding listing sites one thing I am trying to wrap my head around is how many potential guest see you listed on a referring site then at a later time find your site on a search engine. B&B.com and BB are placed 6th and 7th respectively for trafficsource. Google organic, direct traffic and Google CPC are in my top five sources for traffic. I feel that at least part of the Google and direct traffic must be from those who have found my site elseware 1st. I am also guessing that since the Google and direct traffic is mostly new traffic that many of these people are viewing pages at work then booking pages later from home or visa versa. This is somewhat confimed by the network locations for some of my traffic. Does anyone have any idea how to qantify the above?

Given our location and guests I don't think they go to the directories and then or also google after that. I believe most of them either google our "town/location/region and lodging" and we come up, or they google the same and click on the directories that come up.
This is is why I am adamant that inns need to be listed on most if not all the big players.So guests see you listed repeatedly. Like we say, even if you don't see many referrals from that directory maybe those are the folks who are calling to book a room.
I recently asked this forum to look at B&B's in a specific city in NC. The google organics drove me batty and I myself finally jumped onto two of the directories just to compare these B&B's without losing my mind. I had no other choice other than to give up - which I actually did in the end. The search wore me out.
Those B&B websites, for the most part, SUCKED! So for me it was less painful to hit a directory and view them all in the little drop down list. Esp if they had a comparison chart of some sort. But I always launched the website for the inn and most of them made me gasp in shock horror!
But that was for an area with quite a few B&B's. We are not in an area of quite a few B&B's so for us "google direct" I will call it, works best. Our SEO is in place, they search, they find us, they open our website and it looks nice so they book.

 

[Morticia]

I also get the same off seasons questions. In the off season I close out my least expensive rooms until the more expensive rooms book. It's not cost effective to have the room/s with the lowest rates as the only room occupied. This year also seemed to be colder than normal, so if we did not have bookings when extremly cold weather was forcasted, we closed out the rooms. Just not worth it to run the heat and salt the walks for one room.
Regarding listing sites one thing I am trying to wrap my head around is how many potential guest see you listed on a referring site then at a later time find your site on a search engine. B&B.com and BB are placed 6th and 7th respectively for trafficsource. Google organic, direct traffic and Google CPC are in my top five sources for traffic. I feel that at least part of the Google and direct traffic must be from those who have found my site elseware 1st. I am also guessing that since the Google and direct traffic is mostly new traffic that many of these people are viewing pages at work then booking pages later from home or visa versa. This is somewhat confimed by the network locations for some of my traffic. Does anyone have any idea how to qantify the above?.

The person who comes up with the software to do that consistently and across all the different media, will be the next Bill Gates. You're right. Many people look at work, send a link to a spouse, ask a couple of friends for advice and then book at home. Your own stats show that guests find you using XYZ, where XYZ is a combo of keywords or directories or whatever.
There is software out there that says it can do the tracking I think you're asking about. However, it cannot tell you that the person who just booked, via online or on the phone, saw your listing in multiple places, using multiple computers or looked once and booked immediately. All it can do is tell you that THIS computer has been used once or multiple times to view your inn via these portals.
And you can't get that info out of a guest. Because they mostly don't know the exact path they took unless they took only one path.
I've had guests say they found me on the local map. They are now calling from home a year later. THEN they say, 'We walked past your place when we where there last.' THEN they say, 'And we liked your TA reviews.' THEN they say, 'And our friends stayed there last week.'
SO, how did they find me? 'Drive by/walk-in' because they saw the inn last year? 'Local map/website' because they have that in hand and that's where they got the phone number? 'TA reviews' because they saw us listed there? 'Guest referral' because their friends stayed here and they mentioned to them they were coming back to town?