This post was written by Wes Melton, Founder of Nokori.com approximately 3 years ago. It was designed to inspire Property Managers everywhere to run best-in-class, functional and profitable businesses, while staying healthy, happy, and free. And we think it's more salient today than ever before.
I’m sure you will agree that if you run a niche service business, i.e. vacation rentals, that you need to market and advertise your properties in order to attract new guests. However, rather than focusing on constantly looking for new guests, your time might be more wisely spent in nurturing your past and current guests in a way that encourages them to return time and again.
In the broader business world, it has been shown that it costs five times more to attract a new client/customer than to keep an existing one. Big businesses strive to avoid “customer acquisition costs” by nurturing sound relationships with their existing customers with the aim of building loyalty. They know that the probability of selling to a current customer is 60–70%. However, converting a prospective customer to commit the first time is only 5–20% (ref).
To add another impressive stat, many believe that 80% of businesses’ future profits will come from just 20% of their existing customers (ref). An example of the “80/20 principle.”
Importantly though, the same principles apply to small and medium enterprises as well.
First, they are telling you that you are satisfying their needs – that what you are doing is integral to a great vacation experience.
Second, you have successfully established a relationship with them, and they trust you to maintain the level of service you provided on their first visit. You will soon discover that these returning guests will also become powerful advocates, spreading the word to others. Money simply can’t buy the “social proof” that comes from personal recommendations.
Understanding the theory of these facts is one thing, but the question we often hear is just how to form that type of relationship with our guests. What kind of “face time” is best? With this in mind, we went to the sources and asked several vacation rental guests why they returned. Their answers were both compelling and diverse.
We're sharing them below and calling them "Green Flag" comments that give you a very strong indicator of a repeat or referral booking:
“Impeccable service was delivered from the first interaction”
You may have heard of the popular adage, “The first impression is the last impression.” This holds especially true for vacation rentals where clients form a lasting impression of your property. The key to getting a 5-star rating is always to deliver your best service from the very start and make your guests feel comfortable. For instance, guests have told us that they are more inclined to return if they are greeted in a friendly and courteous way right from their very first contact with you. This might be how you balance friendliness with professionalism when answering any questions or helping them with their booking. Speaking to a guest directly over a phone call will go a long way to commencing the relationship-building exercise.
“When we arrived, we received a welcome text/phone call”
It doesn’t cost much to send a welcome text or phone call to your guests to make them feel welcome without being invasive. It is part of building on that first impression. A side benefit is that by texting or calling them, your number will be added to their phone books.
“The home was pristine, and everything was well organized”
Keeping your property clean and organized shows your guests that you have everything under control. It also encourages guests to maintain cleanliness and to leave the property in the same manner. It helps to keep the décor simple yet elegant. Should anything not go according to plan, be quick to apologize, and fix it immediately. Being organized and prompt to respond will limit the likelihood of negative interactions.
“We felt special when we found a welcome kit with a handwritten note!”
Small gestures like a fresh bouquet from the garden or a personalized welcome note will go a long way in wowing your guests. Depending on the makeup of the party, consider leaving out some treats for their dog, puzzles for the kids, and a bottle of wine for adults.
“We look forward to the monthly email newsletter”
Sending out an email newsletter to your guests is important. This will keep them updated regarding your property’s features, including improvements and additions that they could enjoy in the future. If a garden is a feature of your property, be sure to talk about what is blooming and what will be blooming in months to come. These small mentions will be subtle reminders about your property’s features and of how much they enjoyed their stay.
"The event calendar is a great feature that keeps us coming back for more"
Another great idea is to maintain an event calendar that keeps track of the different events in your town or neighborhood. This should be included in both the newsletter as well as in the welcome kit. This creates a connection with guests, and they tend to think, “This event sounds fun – let’s go back to attend it.” Always ensure that your calendar appeals to a broad cross-section of people. So it should include events for those who have kids, those who love sports, beach lovers, gardeners, theater or music lovers, and so on. This also creates an opportunity for people to enjoy and try different activities or to invite others who enjoy particular activities to join them.
“The special packages were thoughtfully put together”
Creating and promoting packages that include wine tours, yoga sessions, personal chef experiences, theater tickets, and so on will not only pique the interest of your past guests but will give them a broader appreciation of what is available in your area. Packages such as these will also make them feel like they are getting a good deal. Make a list of common tourist attractions in the area for your packages (the operators might even offer you a discounted rate for inclusion in your package). Your guests will be grateful to you for helping them discover those hidden gems. Use your newsletter and social media to promote your special packages.
“As return guests, we love the pampering, extra service, and no booking fee”
Making return guests feel special doesn't need to cost a lot. For instance, offer a free airport transfer, an authentic bottle of local wine, or fresh fruit from a local orchard. To top the list, though, you could offer no booking fee requirement for returning customers. Actions speak louder than words, and when you take the extra initiative to treat your guests with kindness, they won’t have a reason to look anywhere else.
“We were touched by the warm thank you message”
A personalized thank you message will help to build your relationship. If they had a dog, name the dog in the message, likewise the names of their children. Ask them what they particularly enjoyed about their stay. Not only does this show you care, but it also gives you an idea of what features to highlight in your marketing.
Finally, take the next bold step and ask them when they will be back again. You might say something along the lines of “Our Spring Festival is on xyz weekend – will you be coming back for it?”
We found these responses really thoughtful and inspiring, and the best part is that only a few of them require a financial outlay. Of course, your time is a cost factor in running a holiday rental business, but once you set things up, you will just need to “rinse and repeat” for every guest.
Most people already have relationship-building skills - we are taught them from a young age, and develop them as we move through different stages of life. The key now is recognizing that these skills are actually business tools that you can draw upon when looking for ways to encourage your guests to return, time and again.
Have you ever heard these guest comments and did they lead to your desired repeat booking outcome?
What other incentives have you tried to encourage first-time guests to return?