You put a lot of time and effort into keeping your online reservation calendar up-to-date. And you should: It makes a difference for your vacation rental listings, even impacting your placement in search results. You also don’t want people to waste their time inquiring about dates that aren’t available.
Why, then, do so many people insist on contacting you about days you’ve already blacked out?! As I said in my last post, I don’t think renters are entirely to blame. Today, I’d like to explain why I’m actually happy to see every one of those inquiries land in my Inbox.
While extra inquiries take extra time and energy — something none of us has in abundance — every inquiry you receive is proof of your hard-earned marketing investment. More importantly, each inquiry has a dollar value attached to it, whether you land a new booking today or not. Let me walk you through how.
Why every inquiry is worth $$$
Every lead has value because you can keep in touch with those inquiries and convert them later. Maybe it’s next season, maybe it’s in the offseason, or maybe it’s 2-3 years down the road… but they have potential value in the future, so treat them that way. The last “remarketing” email I sent to my contact list (of past renters and inquirers) resulted in a 2.5% conversion rate — which means that one email motivated 2.5% of the people who received it to respond and make a reservation.
Let’s say my average booking is $1,000 (mine is actually quite higher, but $1,000 is more conservative and makes the math easier). Let’s also just say that my email conversion rate is only 1% – also to be conservative and make the math easy.
At that value per average booking and remarketing conversion rate, I know each person on that list — what’s called a lead in the marketing world — has an future expected value of $10 (and possibly higher if they convert more in future campaigns!). So, every time I receive an inquiry for an unavailable date, I remind myself that each response is like someone handing me $10!
That helps me avoid frustration, and reminds me to treat every inquiry with respect and responsiveness. If I’m booked, I kindly tell them so. I might refer them to my calendar and ask if their dates are flexible; they may change their dates and book sooner than I’d hoped. They might also tell a friend, or perhaps they follow me on Facebook. But I know, if nothing else, that they have value because there’s a chance I convert them in the future with an email. I might even send them a Groupon-style deal to try to fill empty off-season months!
How to calculate what your inquiry is worth
How did I calculate the $10 pay-off?
- First, write down your average booking value. In my example, I used $1,000 as a conservative number. You should insert your actual average booking amount.
- Second, write down your conversion rate for your email marketing campaigns; in my example, I used 1%. If you don’t know what your actual conversion rate is, use a number between 0.5% and 5%; results vary from one property to another, but the 2.5% rate I achieved with my email campaign is pretty good.
- Finally, multiply these two numbers. That’s the value of each lead!
Your average booking amount
Conversion rate from your email campaign
Your average lead value
Pro tip: you can further refine this by looking at just the booking value and marketing conversion rate for a particular marketing channel (i.e. listing sites, free classified ads) that you want to analyze. This will help you assess the value of leads from these different channels, track how each is performing, and understand which are the most valuable.
You may be thinking: ”But if only one or two of these inquiries convert, the rest aren’t worth anything.” However, you never know who will make a reservation until they actually do! My job is to treat each inquiry as if it is the one that will become my next booking.
Why you should follow through
I’m not recommending that you stop keeping your calendar up to date — or take misleading actions — to generate more leads; that would be bad for the industry and could have even larger negative effects on your business (e.g. like hurting your rank on listing sites).
However, I do recommend taking these extra inquiries in stride and responding to every one as if they are going to be a guest, even when you’re already booked. If the volume is too much for you to manage, consider adding an auto-responder for any inquiry that comes in for dates where you’re already booked.
In my next post, I’ll recommend different ways for you to proactively respond to these additional inquiries. In a future post, we’ll dive more deeply into the do’s and don’t of email marketing for your vacation rental, since it can be a tricky thing and you want to do it right.
How do you handle inquiries when your calendar is already booked? Tell us in the comments below!