** My business is not profitable: what should I do? **
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Hello and welcome to the YouTube channel I display Complete. I hope you're doing well. We are talking about a fairly serious problem today, which is when we realize that the activity we have launched, unfortunately, is not profitable. This is an extremely thorny problem. Rest assured, if you are in this situation, you are not the only one. Many of us are in a situation where we are not profitable after investing in something, for a whole bunch of good or bad reasons. Moreover, in these cases, the question that arises is: “when we have made this inventory, what do we do with all of this? What ideas can I give you to help you get out of this pitfall, get out of this situation, and finally obtain the profitability you deserve? » If you are in this situation, stay with me. This will really help you. And if you are not yet in this situation, but you are starting out soon, well, take all the ideas that I am about to share, because it will help you, precisely, to never being in this rut.
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– Hello Axelle. Welcome. I hope you're well.
We will start with the different keys that I want to share today. What we must keep in mind when we are in a situation where our activity is not profitable is that there are three pillars which are the capital pillars of the performance of your seasonal rental, which are also the pillars to which we must return when we are precisely aiming to improve profitability. These three pillars are as follows, and I will then detail ideas to help you improve precisely on these pillars. The first is service delivery. The second is marketing. The third is price optimization, and the optimization of all the levers at our disposal.
The first is service delivery. What does service cover? In fact, it is obviously the entire experience that we offer to travelers, whether online or on site when we launch our seasonal rental activity. If today you are not profitable, it is possible that there are problems related to the services or services you offer. There are three ideas to help you improve.
The first thing: make sure that you currently have a decoration that is really in tune with the times, a decoration that is modern, and which is not too personalized. We are all fed up with real estate shows on the internet or on TV where we are told: depersonalize, depersonalize, depersonalize. In seasonal rental, you still need a style. There has to be something different, but it has to be in keeping with the times. It shouldn't be too specific, and it might displease people. Obviously, the border is quite small, and then I am neither relevant nor an expert on the subject of decoration. In any case, what I know from experience is that on the goods for which we work, those which have something atypical, I call it strange atypical, are not necessarily those which are the most easy to perform. You have to have something recognizable. The word “recognizable” is much more relevant. In fact, something positively recognizable, whether it is fashionable, whether it is carefully decorated. And honestly, on that note, getting help from someone who knows how to decorate is not at all a stupid investment. It's actually a very good investment, because it allows you to capitalize on all the years to come. It's a one-time investment, and you build on it for years to come. And so, on the service, it's the decoration.
The second thing which is, I think, a little neglected, is to choose very carefully, for their seriousness, the person who will be responsible for the cleaning. The quality of housekeeping is a key factor in traveler satisfaction. There are generally three things: are we going to sleep well? Is it going to be clean? Will we be able to take a hot shower? Overall, this is what travelers come for. They want to sleep, wash, and be able to go back to a place where they feel safe, because it's clean. If the housekeeping is not up to standard, the traveler will significantly downgrade the rating you will obtain at the end of the trip, even if the rest of the items were completely perfect. You will then significantly reduce traveler satisfaction. So, work with people who are extremely professional and skilled in their craft. Knowing how to do housework well is not something that is trivial, it is not something that you can just make up. It's a job, and you have to work with people whose job it is, and who know how to carry out this task well. So, point number two: housekeeping.
Point number three is the quality of customer relations. The quality of customer relations is also very important, because before coming to the apartment, this is the only element for which your traveler will confront the experience you offer. Do you answer the questions asked of you? Are you responsive? Do you provide enough information so that the traveler can find your apartment without having too much difficulty? Do you send them anticipation messages in advance, for example: “You will soon be staying with me, here is all the information to be able to find me”? Subsequently, do you ensure their satisfaction by asking them to post notes on the different sites, or by responding directly to a questionnaire that you have created? All of this is important, and it will obviously allow you to make the traveler feel that they are someone special, that they are expected and considered. And that is what every human being wants in life, that is to say, to have consideration for oneself. It’s the very nature of being human. So, making him realize as much as possible that he is expected for his stay, that he is not a number among many others, that is what will make anyone feel satisfied with the customer relationship that you established with him. If you think that you really have something to improve on this part of the customer relationship, there is another possibility too. It can be to do the arrivals and departures yourself, at least for a while, to really create this human connection. Obviously, with the pandemic, we pay attention to contact, and we respect barrier gestures, but it still allows us to add a link.
So, on the three pillars, we said: service, sales, and price. On the first pillar, to improve your profitability on the service, there are three ideas which can be a toolbox for you to try to improve your performance: decoration, cleaning, and the quality of customer relations. In fact, these three elements on the service are really going to have a major goal of improving the rating that you get at the end. There, we're not talking about money, we're really talking about having an excellent grade. And in fact, it is ultimately the excellent rating which is the lever, which is the key to moving towards excellent financial performance. So, the service, with these three ideas to get an excellent rating.
The second pillar, as I told you, is sales. On sales, you can work on certain levers to help you improve on this item of marketing. The first lever that is important is the quality of the ad. The quality of the announcement covers several realities. The first thing is the title and the photos that you put in your ads, since these are the very first things that travelers will be confronted with. When they get the results listings, they only see a title and photos, and then some information, including the price, but overall that's about it. On that note, really take care to do a little competition study to see what things are valued by competitors. If you see that in your city, everyone puts a green space as their first photo, with emphasis on the exterior, the sea, the view, you will have more difficulty converting, that is to say, make people click, if you are the only one with a living room photo, while everyone values the outdoors and the sea. It's things like that that can help you improve on the quality part of the 'announcement. And then obviously, within the announcement, there is the fact of being as detailed as possible, of giving as much information as possible. And all of this is something that online sales sites help us with a lot. You must do the exercise of completing 100% of the elements, giving as much information as possible.
The second point that will help you improve your profitability is the number of sites on which you are marketed. If today you only sell on Airbnb and you are not satisfied with the profitability of your properties, it is possible, even probable, that you would earn more money if you were marketed in more sites. I give concrete examples. If you are only on Airbnb, you can absolutely add booking, you can add morningcroissant for the medium duration, you can add le boncoin to work on direct sales, you can create a direct site, you can also consider gîtes from France. Duplicate the sites on which you are available for sale, what will that produce? This will create many more opportunities for travelers, your prospects and potential customers to see you. The more visible you are, the more likely you are to be retained. It's like the lottery player, that is to say that everyone who won has played. For us, it's a bit the same. Everyone who has bought from us has seen us, so if they don't buy from us, it might be because they don't see us, or not enough. This is why increasing the number of sites on which you are marketable, if you are not satisfied with your profitability, can be a solution to allow you to increase sales.
The third point is to use certain boost tools for your presence on the sites, in particular booking which is very strong for this type of program. Booking offers a number of programs to boost your level, your place in the results algorithms, that is to say that when someone does a search, you can be at the top of the results, or at the very bottom of the results . And with booking programs, you can go up in the results, and be visible much more easily, and much more quickly. These programs, used wisely, are good tools to help you boost your sales and improve your financial performance. So, on the marketing part, there are items to work on if you are dissatisfied with our profitability: the quality of your ad, the number of sites on which you are available for sale, and the third point is potentially using boost tools for certain sites like booking. These three elements, on the marketing side, will help you increase the frequency of clicks on your ad, and therefore the frequency of sales, of conversion of clicks into purchase. So that's for the sales block.
Then, there is the last block: the block of pricing and optimization of the levers at your disposal. On this part, we will really increase revenues and profitability. So these three elements that are intertwined, that make sense together, they can be worked on separately. But the ideal to have the highest possible profitability is to be good on all three blocks. The most important point on the pricing part is really to do revenue management, that is to say to have a real strategy of differentiating your prices according to the period, therefore to watch the YouTube videos of J Post Complete on YouTube, because it will really help you. I really share, on a daily basis, a lot of ideas to help you do revenue management. For those who don't know what revenue management is, it's the science of getting your price right. We can determine it like that. We also hear Yield management in the media. It's exactly the same thing, no doubt about that. So, the first thing: do revenue management.
The second thing: have a coherent strategy between your prices and all the other levers. I'll give you a concrete example. Sometimes, you can have a rental company that has worked extremely well on its prices; on the other hand - I'm going to be a bit of a caricature - it only accepts stays of 10 nights, for example, and all reservations are neither cancellable nor refundable from the 30 days which separate us from arrival. So here, we are really on a table which shows us that we can have an extremely well positioned price, extremely well worked, but in the end, if the other levers are not looked at at all, we find ourselves in a situation where, in fact, we're not going to market either, because there aren't a lot of 10-night stays either, so in fact, we're depriving ourselves of a whole share of the demand. Or conversely, the cancellation conditions are perhaps far too demanding, especially in the context of a pandemic. Moreover, if all competitors accept that reservations are cancelable and refundable five days before arrival, and you are alone in being cancelable and refundable 30 days before arrival, you will obviously come last in the choice travelers, because they will want to be more reassured with something that will be cancelable for a longer period of time. So, it is essential to work well on your price, yes, but you must combine it with a strategy on the levers, which is just as relevant; and work so that all of this can lead to better financial performance. So, the example on this is in particular the length of stay or the cancellation conditions, which are two examples of levers which should be absolutely consistent with the pricing that you do.
And then the third point is: think about other levers. You have other levers at your disposal. I will give two examples: launching promotions, for example, is a lever that is possible, particularly if you realize that your price is a little too ambitious, and that you need to lower it a little. You have the possibility, rather than lowering your price, to say to yourself: “I’m going to launch a promotion instead. I was going to lower my price by 10%, but I'm going to do a -10% promotion, rather than lowering my price. This will allow me to appear visually as a bargain, an interesting offer. » This can capture the interest of certain travelers who are more price sensitive, and allow you to capture more reservations. So, in the other levers, we have the promotion lever, for example, and then we also have the medium-term lever. It is a lever that has allowed many seasonal rental companies to get out of trouble during this period of pandemic and confinement. At J'poster Complet, on the goods that we optimize ourselves, it is true that the medium duration allowed us to still produce very good performances, despite the successive confinements. So, it remains a lever that is essential to have in the prism of your toolbox. It's one of the different arrows in your bow, and that's also something that you need to work on and optimize. Concretely, what do I mean when I talk about medium duration? It is: what percentage of discount do I give for a stay of fourteen nights? What percentage discount do I get for a twenty-eight night stay? These price-related levers are really levers that will really help us, as I said earlier, to increase the turnover and profitability of each of the sales you make.
So, if I summarize, we have three pillars to work on if we are not profitable, and we really want to put an end to this and finally be profitable. The first thing is the service. Ideas to help you: decoration, quality of cleaning, and quality of customer relations. This block of the service will help you get excellent grades, and it is essential to perform well on the other two pillars. The second pillar is marketing. Ideas to help you: quality of the ad, number of sites on which you are available for sale, and potentially use boost tools, particularly those for booking. This will help you increase the frequency of clicks and the frequency of purchases. And the last point is pricing and optimization levers. Ideas to help you in this regard: do revenue management on your prices, have the levers consistent with these prices, and the third point, think about the other levers that are at your disposal, in particular the medium duration and promotions . This will directly help you improve profitability. So.
I hope these ideas can help you if you are in this situation.
– Romain: “What is the booking boost called? »
On booking, what I called the boosts, I grant you, it was not extremely clear, these are the programs offered by booking. There are many, with different names. You have the “genius” program, the “favorite” program, the visibility accelerator, the “ideal” program for working. You should know that the programs are not all available on all properties, that is to say that sometimes, you will have, on certain properties, programs which are not offered. I think that there is an algorithm that will really give us programs adapted to the property that we are currently exploiting on booking. So, this is the reason why sometimes you don't necessarily have all the programs present. But this is what I was talking about when I talked about booking boosts. I grant you, I wasn't extremely clear.
– Hello Willy. Welcome.
I don't know if you have any questions for me about that. While waiting for a potential question, know that I am always listening to ideas you might have, or problem areas you have at the moment, on which you would like me to make a video. Don't hesitate to share it in comments, on Facebook or on YouTube. I read the comments, and that will allow me to continue to produce videos on subjects that will help you, which are part of your daily life, and which can remove thorns from your side. Listen, I still have to say hello, see you tomorrow for the next live. Oh yes. I'm also going to share one last point, which is that I made a video yesterday on a revenue management quiz, so don't hesitate to go to the YouTube channel I'm displaying Complete to watch the quiz, and give me your answers, because I'm going to reveal the answers soon. Tell me what you think of this type of quiz video, and don't hesitate to give me your answers so that we can play on this subject, and so that I can share the correct answers with you in a few days. So.