Hospitality operators are increasing their use of offers and promotions this year but are moving away from vouchers in favour of simple money-off promotions, according to new research* from American Express.
The survey of 200 in-house marketing decision-makers found that nearly a third (29%) of businesses did not use paper or digital vouchers in any of their offers during 2015. However, with a fifth (21%) fearing that customer loyalty will decrease in the next year, they are quick to acknowledge the importance of alternative ways to use offers.
From looking at its own customer data, American Express revealed that the most successful offers combine both in-store and online, calling for hospitality operators to take a multi-channel approach.
Promotions and offers gain popularity in 2016
Almost a third (27%) of respondents say they plan to run more offers in 2016 than they did in 2015. Just 3% of those surveyed said they would be running fewer offers, demonstrating how promotions remain an important marketing tool used by a wide variety of hospitality operators.
The most popular types of promotion were money off specific products (favoured by 25% of respondents) and a percentage off/back (also favoured by 25% of respondents). ‘Buy-one-get-one-free’ (BOGOF) promotions were favoured by just 9% of those surveyed.
Despite the ongoing popularity of offers and promotions, businesses identified significant barriers to successfully implementing them within their organisation. Cost pressures were cited as the primary concern (26%), with lack of ability to target consumers effectively (11%) and lack of time to produce collateral (7%) coming second and third respectively.
The importance of effective customer insights
There is also evidence that offers and promotions may be lagging behind other marketing techniques when it comes to feeding back vital customer intelligence to those using them. Almost half of respondents (45%) said more data on their customers would help them run promotional campaigns in a more effective way and over half (54%) said that their promotions would be improved if they could reach a more targeted group of customers.
One potential solution to gather more data from offers at a lower cost and to target consumers more effectively is to partner with an external offers provider. More than one third of respondents (37%) said they would be more likely to run a promotions campaign if an external partner could help to deliver it.
Dan Edelman, VP, Marketing at American Express said: “Our research shows that offers and promotions are still a vital weapon inhospitality operators’ armouries, however they are clearly conscious of the cost of offers and the need to target them effectively.
“Businesses working in the hospitality sector are hungry for more data to help them deliver the most relevant offers to their customers. Many existing offers systems simply don’t provide the customer insights that businesses require in the modern age.
“The Amex Offers programme is designed to help businesses reach the right consumers with relevant, targeted offers. Our partners see enrolments and redemptions increase by three times on average after joining the programme**.”
*Populus survey of 200 in-house marketing decision makers, commissioned by American Express. Fieldwork completed between 2 and 4 February 2016.
**Data compiled from American Express Amex Offers data between June and September 2015.