The critical numbers of the business will be tracked through the following means:

• Leads, testimonials, and referrals will be tracked through the CRM system. These will be entered automatically as the leads come over the Web and by hand by the customer service or sales person dealing with them otherwise.
• Leads converted (through room reservations) are logged automatically in the CRM system, which doubles as an accounting software suite.
• Marketing expenses are entered, as they are incurred, into the system by the accounting department.
• All departments are required to make all entries within 24 hours of when they are incurred to keep the system up to date at all times.

Sales Forecast

Sales are currently higher in the category of introductory level rooms. As marketing efforts pay off over the next two years, unit sales for mid-level and premium level rooms are expected to increase relative to introductory level rooms. Room service sales are driven by room nights sold. Generally, every night of a premium room rental corresponds to a room service purchase, 75% of mid-level room rentals and 50% of introductory-level room rentals.

Prices are expected to rise on average over the next three years as the business can command higher prices from customers.

Sales are projected to rise towards full capacity (50 rooms x 365 nights per year = 18,250 room nights) but not reach more than 80% of this number. This is due to the fact that it is in the best interest of the hotel to not discount rooms so highly that they are all used at all times. Off-peak times will be slower, but the hotel will maintain its premium-level pricing for the most part through this method.

Sales Forecast

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Marketing Expense Budget

The marketing expense budget divides expenses into their major categories:

• Advertising represents print and online external ads.
• Direct mail represents the postcard and letter mailing campaign to high net worth individuals. The mailings will vary between the two formats each month and the expense will fluctuate a bit as the letter mailings are more expensive.
• Focus groups are costly as the discounts and free services offered to customers are logged as an expense on the books, as is the direct cost of the lunch provided.
• Web development includes website maintenance and hosting, virtual tour development, email newsletters, and the company blog.
• Marketing training reflects the cost in time and materials of orientation and ongoing training and exams for staff.
• Quality assurance reflects the cost in time and materials to review customer issues and ratings, as well as the bonuses from the quality assurance program.

Total expenses will increase as some activities, like the focus groups, are ramped up, and as the cost of doing business increases with inflation. In general terms, advertising and direct mail represent the expense of lead generation, focus groups and Web development represent the expense of lead conversion, and marketing training and quality assurance represent the expense of the service experience.

Marketing Expense Budget

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Key Marketing Metrics

The key marketing metrics will be reported each month. The marketing manager will create this report out of the CRM system and share the results with the CEO in the monthly review meeting.

Leads (including all referrals, website queries, and attendees of the virtual tour) are expected to grow at a steady rate. Lead conversion is expected to increase as the hotel establishes its name and preeminence in the Somnigstad area.

The average dollars spent per customer transaction is between one and two nights and will grow as more customers stay two nights or longer and move to higher priced rooms in the coming two years. The ability of the company to charge higher average prices for its rooms as capacity is better utilized will also drive this number up. It is estimated that 20% of leads will be from referrals which will be generated from customers and corporate relationships.

PR mentions will be tracked by the PR agency and they will provide a report on this data to Drowzey Hotel once a month along with all clippings or copies of mentions.

Testimonials will be derived from the best 10% of customer comments. These customers will be asked to expand their comments into a testimonial after their visits in a follow-up email. These customers will be offered a gift of Drowzey Hotel chocolates or other sweets as an incentive for expanding their comment into a testimonial.

Key Marketing Metrics

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