The Behavioral Science Approach to Repeat Bookings

A recent report shows how behavioral science may help to boost those vital repeat bookings.

Repeat bookings should be your holy grail! That was the message we put out in this blog almost a year ago and it’s even truer today. Now, as the big listing sites bid for even more control of vacation rental properties, a recently published report by Skift and Boxever suggests ways in which we might increase those precious repeat bookings – by adopting techniques developed through behavioral science.

Shift in focus recommended

‘Smart travel marketers are shifting the way they think about the customer journey and focusing more on the moments that take place after the transaction is made,’ says the introduction. Although the report, The Psychology of Customer Experience, is primarily aimed at airline operators, the principles are much the same for vacation rentals. Possibly more so as this is a personal business where a one-to-one relationship with guests is important. Behavioral science? This is ‘the science of understanding your customer’s mind.’ That is, according to Boxever, the data science company behind the report which uses modern digital techniques and data to gain insights into traveler (or guest) behaviors and motivations. To old hands in vacation rentals, some of the ideas here might seem to restate basic principles that many arrive at through trial and error. Others seem like simple common sense. But there are some gems here worth sharing.

Engage for repeat bookings

So, the report urges that you don’t just switch off once you have landed your customer (guest) and seen their money. As Boxever has it: ‘Customer experience goes beyond the transaction.’ Long term customer (guest) engagement and repeat bookings should be the aim. That means looking after guests, giving them an experience that will have them coming back for more to your ‘brand’ (in this case your vacation rental business). They quote the Pareto Principle (aka the 80:20 rule) when 80 percent of a business is generated by 20 percent of total customer base. If only our vacation rental businesses could be in that enviable position with full occupancy! It is much more expensive to acquire a new booking than to have a repeat booking. And remember too that if those repeat bookings come via the big listing sites, owners are paying again for that privilege. Better to have a service such as that offered by Homes and Rooms where owners hold the contact details and history of their guests and also have the facility to take payments and bookings direct to their own website. Another dollop of common sense: ‘see things through the customer’s eyes’. Surely this is a prerequisite of being in the vacation rental business? Nevertheless, it should be an owner priority.

Intermittent rewards improve retention

Elsewhere, the authors suggest the use of intermittent rewards to improve retention. If these are unprompted and given without the explicit promise of something in return they can be a great loyalty builder. Rick Wise, CEO of brand consulting agency Lippincott, who is quoted in the report, describes these as ‘signature moments’. ‘They are the novel experiences that help brands stand out and differentiate themselves and how they are perceived as unique against competitors,’ he says. ‘It’s a key building block in creating emotional connections; a small token to create long lasting stories for customers to tell to others.’ Apparently, behavioral science shows that guests have significant points in their trip which stay in their memories and can influence future behaviors – as in booking more of the same!  These significant moments include the arrival, any memorable positive moments during the stay and, importantly, the end of the trip. Many owners will rightly put great emphasis on making the arrival a memorable occasion. But how many also focus on the end of the stay? Make that moment as exciting and memorable for the guests as their arrival and they are much more likely to make repeat bookings, according to behavioural science.

Top tips to surprise guests

It’s well worth noting too, the report’s tips for creating surprise and delight among your guests.

1. Give an occasional freebie or a discount
2. Check in with guests during their experience
3. Send a thank-you note
4. Waive extra charges
5. Make an effort to personalize communications — remembering a customer’s preference, last experience, or even a birthday goes a long way

Whether it is common sense or behavioral science, it’s always an appropriate time for owners to be putting extra effort into gaining repeat bookings. It’s one of the best ways to reduce owner dependence on the big listing sites – as well as ensuring that owners keep more of the revenue from their vacation rental properties.