Frustrating your customers is a revenue risk you need to overcome

Life is full of frustrations; some are avoidable, some are not. Booking a holiday should always be a pleasure, not a pain.

NB This is a viewpoint by Eddie Robb, CEO for Make it Social.

Planning to spend time with friends as a group should be filled with fun, not frustration. Inevitably, however, despite the rose-tinted specs leading us to optimistically anticipate ‘it can’t be as bad as last time’, in the real world of group bookings, frustrations abound for your customers and sales agents alike.

In fact, the latest industry research indicates that the ‘frustration factor’ can be a major loss-maker for the travel industry. Removing the frustrations could lead to an increase of nearly 33% in group booking revenue for your business.

How does the ‘frustration factor’ translate for your business?

Frustration is basically a risk. Frustrated group members result in the potential for sales to collapse, but not only that. Frustration increases the risk of non-returning guests, lack of loyalty and, potentially most important for your bottom line, revenue being left on the table.

How big is the potential risk?

Big.

So big, in fact, that we are developing an industry report on this very matter, based on research conducted by Why? Research, which this summer e-surveyed 500 US and 500 UK people from its consumer database.

We’re revealing a few key facts today.

Our poll found that each UK-respondent had an average of nine distinct groups with an average of six members per group made up of friends, family or colleagues. That’s a potential 54 individuals accessible through one person alone, and when you consider the average spend for, say, a package holiday sits around £599 per head, the loss potential is massive.

What causes the ‘frustration factor’?

As you might expect, it’s a host of issues but there are two factors causing most of the headaches.

Fear of drop-outs and then having to pay extra

A common pitfall for group leaders is that they often have to pay upfront for an activity and then collect the monies from the group members afterwards. In fact, 19% of those questioned in the research admitted this actually prevented them from completing a booking, despite having the desire to plan a group activity.

In the UK alone, of those respondents who had considered booking a stay in a ski chalet, 38% had stopped at some stage of their booking, 43% for fear that drop-outs will leave others with their bill.

With the average spend in the UK for a ski chalet ranked at £917 per head, group booking failures like this can be a real loss for your business.

Group leader burn-out

The minutiae of group bookings falls to the group leader, whose task is to harmonise, interpret, encourage, and inform - adopting practically every group dynamic behaviour in the book to achieve a successful conclusion.

Yet research reveals that of the 97 respondents (76 from the UK and 21 from the US) who considered booking a villa, a total 28% of sales collapsed due to frustrations coordinating travel arrangements for the entire group and in dealing with everyone’s requests and preferences.

So how can you make this better for your customers?

The quick answer is - take away the frustrations. Starve the risk associated with group bookings by nurturing innovation and creating more group leaders in every booking.

Research tells us people want to book online easier and more socially where all group members are responsible for arrangements and payments. In fact, 54% of respondents felt managing a group booking online would make organising a group activity more appealing, and 51% wanted members of the group to be able log-in individually and pay for themselves.

One way to empower individuals to sign up to group plans and pay separately is to integrate a group booking and payment API into your online environment. This ensures that all bookings are guaranteed drop-out free and groups are self-motivating towards completion, saving your sales agents time and creating efficiencies for your business.

By empowering your customers to become the planners and instigators of the future, the "group leader syndrome" and ‘frustration factor’ could be a thing of the past.

The more engaged group members you have actively participating in arrangements and payments the more easily you eliminate the frustrations felt by the classic ‘group leader syndrome’.

And by reducing these risks you can increase the potential to capture revenue being left on the table from sales that fall through unnecessarily.

A few common questions

“Ok, but our groups still like to pay as a unit.” This does not have to be a problem so long as there is still a process in place for groups to pay in a lump sum if that is what they want.

“Our groups like to be able to speak directly to a sales agent.” Social tools motivate groups to complete their own bookings but should not replace your sales agent. The tools which make your business more efficient through use of clever e-prompts and customer empowerment free up your sales agents to offer better deals, more add-ons and increase your business revenue further still.

Almost two-thirds (61%) of respondents in our research agreed that discounts would make life easier when arranging group bookings.

“We already offer a group booking service.” Sure, but are you optimised for smaller groups of two, four, six people? A lot of group booking services out there only consider 9+ a bona fide ‘group.’ Less than that and often groups have to fend for themselves using the groups channel of the online booking portal, typically resulting in either another ‘group leader’ situation or not being able to access the same deals and add-ons on offer to the larger groups.

Make sure your systems work for groups of any size, giving everyone a gold standard customer experience, building retention and repeat business.