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Social Feedback Affects Revenues…. We can even prove it …


I just read through some interesting research from Chris Anderson from the Cornell School of Hotel Administration about the impact social reviews sites are having on hotel bookings and performance.  A few highlights:

  • The percentage of consumers consulting reviews at TripAdvisor prior to booking a hotel room has steadily increased, as has the number of reviews they are reading prior to making their hotel choice.
  • If a hotel increases its review scores by 1 point on a 5-point scale (e.g. from 3.3 to 4.3), the hotel can increase its price by 11.2 percent and still maintain the same occupancy or market share!
  • A 1-percent increase in reputation also leads to an occupancy increase of up to 0.54%.  This 1 percent reputation improvement leads up to a 1.42 percent increase in revenue per available room.

In short, social media matters!  Its no wonder the customer experience management (CEM) space has expanded.  We used to focus solely on managing the customer experience by understanding it through post interaction or relationship surveys.  That hasn’t gone away, but now we also need to look at online reputation, social media, and other online sources for the perceived customer experience within.
Not a hotel?  If it is not already, it’s only a matter of time before this level of social transparency will be available for your customers too.
So how can businesses stay on top of the review wars?

Medallia Social Feedback, our reputation management offering, was our fastest growing product in 2012.  Instead of routing social alerts to some call center or corporate function 3000 miles away from the issue, we immediately send social feedback from social sites (e.g. TripAdvisor, Facebook, Twitter, etc.) directly to the managers on the front-line, at the property.  We’re very passionate about this approach because the front-line can relate to the severity of what is being said, truly sympathize, and actually do something to fix the problems.  Medallia also supports these roles with real-time alerts, case management workflows, and the ability to respond within the application.  Data also shows that consumers will take sincere management responses into consideration–we all know there are a lot of crazy, irrational folk out there writing these things. Attention to the problem and the personal touch of local personnel can really make the difference in customer attitude and perception.
Customers are not only monitoring social media with Medallia—they’re actually managing and improving social scores by soliciting more balanced feedback for these review sites.  We hate to see hotels and other businesses held captive to a few squeaky wheels on social media.  Given that we house solicited feedback and social feedback in one system, its very easy for users to see if they have legitimate widespread issues with their customer experience or a misrepresented social voice.
This year, we’re now working with customers to pull in bookings data by channel and revenue information.  Not only are we on our way to showing this ROI within the system, but users are becoming more strategic when looking at A) which review sites are most important to their topline, B) how they rank relative to competitors and C) what actions in social will have the biggest impact.
Check out this video on Medallia Social Feedback to learn more.

Photo credit: Maryland GovPics