A recent study conducted by McKinsey & Company shows companies at the forefront of using digital tools including social media to engage consumers along the purchase decision journey are gaining a significant advantage over their competitors. It’s the digital leaders vs.the digital laggards and the financial implications are enormous.

The study included data on 1,000 brands across a wide range of product categories covering 20,000 customer journeys and 100,000 touchpoints. Three not so surprising findings from the study include:

  1. More Channels = More Competition – With the proliferation of branding channels and messages comes increased competition for share of the consumer’s attention
  2. Consumers Are Taking Control- The impact of company branding messages and likelihood of conversion tends to decrease as consumers become more digitally adept, i.e. consumers become less responsive to individual branding messages
  3. The Strong Will Survive – Companies with the strongest conversion capabilities are those that offer the strongest digital capabilities

While these findings may seem self-evident to some digital marketers, they are important because they’re backed up by a wealth of data quantifying the conversion advantage digital leaders have over laggards. More specifically, the study concludes:

“Companies with greater digital capabilities were able to convert sales at a rate 2.5 times greater than companies at the lower level did.”


In the study McKinsey & Company identified three distinct consumer segments based on their proclivity to use digital media including:

  1. Experimenters – These individuals represent 39% of consumers and use digital tools in the initial consideration of a brand
  2. Engaged & Informed – These individuals (42%) use digital tools for both consideration and more intensive evaluation
  3. Fully Digital – Representing 20% of consumers, these folk use digital tools end-to-end to complete a purchase

Other interesting facts emanating from the study include:

  1. The number of digital touchpoints is increasing by 20% each year as more offline consumers switch to digital tools and younger, digitally oriented consumers become serious buyers.
  2. There were variations across industries, but fully digital consumers were more prevalent in making purchases in the software, airline-booking and utilities industries. We’re checking to see if there is hospitality specific data to share.
  3. Social media recommendations that nudge customers to increase their purchases are becoming a potent competitive asset. Positive consumer digital experiences also increase a brand’s “stickiness,” thus raising the likelihood of repeat purchases.
  4. Brands that have moved swiftly to master digital channels ­– gaining a deep understanding of customer preferences, crafting digital experiences and improving offerings via social feedback– are establishing a competitive advantage that may be difficult to beat.

The study did not specify which digital and/or social media vehicles that companies need to use to gain a competitive advantage. It did however highlight the need to adapt to the digital world in order to survive.

Implications for Hoteliers

With digital leaders having conversion rates 2.5 times higher than digital laggards it does point to an inherent need for hoteliers to strive to become a Leader. Following are five top-line recommendations to help move your property toward becoming a Digital Leader:

  1. Website – If you haven’t already planned on upgrading to an industry standard responsive and adaptive website now is the time. These sites provide a superior user experience across all devices and blazingly fast speed that are just two of the key measures used by Google in its ranking algorithm. There are many more we can cover in subsequent blog posts.
  2. Database – Commit to building a comprehensive, centralized marketing database of all past guests, travel agent partners and prospects with flawless data entry. You’ll find this could very well be the most effective marketing tool in your arsenal. Consider using a hotel specific DB/CRM solution like NAVIS to build stronger, more loyal guests and brand advocates.
  3. Hire Database Marketing Professionals – DM is the science of encouraging people to take action – click to your website, call reservations, book online, etc. Having experts oversee your program can increase response (sales) 2 – 5 times or more. If your email program is driving $500,000 in revenue, think about what it could be. Can you even quantify revenue as a result of your email efforts?
  4. Social Media – Focus social media efforts on platforms where the majority of your customer segments congregate. Be selective – you can’t cover them all. Develop an extensive library of quality content meant specifically for each segment. Don’t copy and paste the same message across all platforms. Engage with customers on review sites like TripAdvisor and don’t forget that your Blog is an important social media component.
  5. Measure Everything – If your goal is to become a digital leader, the only way to know if you’re making progress is by measuring the overall program and its individual components. There are a growing number of tools like Sprout Social or even ReviewPro to help measure engagement whether it involves social media, blogs, email marketing or other digital tools. And always remember:

“When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates.”  — Thomas S. Monson

With the number of digital touchpoints increasing by 20% each year it will be difficult for marketers to keep pace with the growing leagues of digital consumers. The good news is you don’t have to worry about all of them – just those segments where key prospects for your hotel or resort congregate.

To reap the financial benefits of being a digital leader start setting goals, developing a plan, executing flawlessly and measuring performance.

What do you think?

AUTHOR: Madigan Pratt

Madigan Pratt is President of MP&A Digital & Advertising, an award-winning agency helping luxury hotels attract and retain profitable customers. Principals with over 60 years of collective experience at some of the world's largest advertising and direct marketing companies lead the agency's team of marketing, creative, public relations, Internet and social media professionals.

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