Hotel owners are always looking for ways to increase their sales. Now, there are many tactics you can deploy to get more sales. But one that is often overlooked is increasing the revenue from the SMERF segment.
You might be wondering, what is SMERF? It is an acronym for Social, Military, Educational, Religious, and Fraternal groups. And there's a love-and-hate relationship between hotels and these groups.
On the one hand, they bring in a lot of business, especially during the low season.
But, on the other hand, they're constantly negotiating for the lowest rates. Given this, what strategies can you take to maximize the revenue from this important segment? We'll share some strategies that you can deploy today.
Table of Content
What Does SMERF stand for?
SMERF stands for “Social, Military, Educational, Religious, and Fraternal.” groups. Now let’s break down these market segments further.
Social Market Segment (S)
The “S” stands for weddings, professional organizations, civic, holiday celebrations. They may vary in size and scope (from small interest groups with ten guests to big charity events with 150+ guests). These guests hold many gatherings and have a full-packed agenda with receptions, lunch, and dinner.
Military Market Segment (M)
This segment consists of military groups meetings, military community meetings, etcetera. They are often mid to large meetings ranging from 50 to 100+ guests. They tend to have a short stay and are heavily influenced by government funding.
Educational Market Segment (E)
It consists of groups hosted by educational associations or institutions and education-related conferences. Similar to social groups, they tend to have a full-packed agenda, including lunch, dinner banquet, and overnight stay. They are often larger and can be attended by up to 50+ people.
Religious Market Segment (R)
The religious segment is a diverse and large market segment. However, this is pretty explanatory given the variety of faiths and beliefs throughout the world. As such, they come in all sizes. This group varies from small gatherings for a banquet lunch youth groups to a larger “business” group that will stay one night or more and host several conferences.
Fraternal Market Segment (F)
The fraternal group covers national/local social organizations and other member organizations. These could include sororities, university alumni, reunion parties, and philanthropic meetings. They are often larger (50+ attendees) and tend to have a short stay with one or two meetings.
Why Focus On SMERF?
The tides are changing for the better for hotels. In January 2022, 350% more meetings were held in the United States compared to the same month of 2021. While forecasts show that the average number of attendees will increase as restrictions remain lifted.
U.S Meetings by Market Segment January 2022 by KNOWLAND
Although these are great news. The chances are that it will probably be a while before we want to visit a large conference or in-person corporate meetings. The idea of being packed with hundreds of other people in a small and confined space is likely to put people off for some time.
But the fact is, this segment is resilient - the demand from SMERF remained relatively stable throughout the pandemic. As people are still getting married, celebrating anniversaries, and military groups are still being deployed. However, these events tend to be held smaller in size due to social distancing.
Aside from this, hotels have often relied on the SMERF to keep their business stable in tough economic times. They tend to book their rooms on weekends and during shoulder or off-peak seasons when others are unlikely to book - and for those reasons, SMERF can be a great segment to target.
8 SMERF Strategies
The hotel industry is finally starting to rebound - and meetings and events are recovering! Right now is a great opportunity to maximize the SMERF booking opportunities for the end of this year / next year. Below are some of our eight strategies tips.
1. Analyze Your SMERF Groups and Reactivate Sales
Many hotels are good at generating new leads and converting them to customers. But they tend to forget about the other part, which is nurturing their current or past accounts.
Now, if your business is slow and you’re struggling getting leads. Why not dig deep into your data and start marketing to all those accounts that canceled their events during the pandemic!
Chances are, many of them are already planning for new events in 2023/2024. You want to make sure they think about your hotel when planning for that next event.
2. Find the Best-Fit Accounts and Target Them
After the big furlough during the pandemic, hotels face labor shortages or may not have the financial capability to hire enough staff. Essentially, there will be more work burdens for every salesperson.
Staffing level during the peak of the pandemic. Credits to the American Hotel & Lodging Association.
We all know that there is only so much we can do as individuals. One way to overcome this is to weed out less-valuable companies by using an account-based marketing approach to sales.
For instance, using our very own hotel sales software, you can:
Quickly extract reports to find the highest-valued SMERF accounts.
Research these accounts. For example, how many attendees do they usually have, their stays, what events have they hosted before, did they consume food and beverage?
Group similar accounts together as a “segment”.
This way, you can create targeted email marketing activities that are more likely to generate a greater ROI.
3. Target New SMERF Groups in Your Community
Don’t be afraid to target new SMERF groups. Be more proactive. Sometimes it may be as easy as looking in your backyard. Start engaging more with your local communities and let them know you’re here.
Make a list of the top ten largest religious institutions, associations, wedding events organizers, and walk by to introduce yourself. Give them a 5% or 10% referral fee for recommending your hotel to others. Why not give them coupons to stores and cafes like Starbucks or Amazon for referrals if they can’t accept cash?
Don’t forget to exchange contact information, invite them to an on-site visit to see your incredible facilities and F&B offerings. And always follow up with a thank-you e-mail or card, to start nurturing that relationship.
4. Understand Their Needs
It is an understatement to say that all SMERF events are the same and have the same type of needs. Although we like to bundle this segment as SMERF, they are as distinctive as sounds. They all have diverse requirements and needs, which is a challenge for many to meet.
Are you confused about where to start? Well, think “backward”. This segment is the same as other groups. They focus on creating value for their attendees. So, what value do they want to create for their attendees? That depends. You got to build a personal relationship with them to understand their underlying needs.
5. Focus On Adding Value to Your Offer
We all know that the SMERF segment is predominately looking for the lowest hotel rate - but don’t fall into this trap. One way to set you apart from other hotels is to focus on the values in your package. There are plenty of things that you can offer that practically doesn’t cost anything for you:
Complimentary check-out is perfect, especially if their check-out date is on low-demand days, such as Sundays.
Early check-in - SMERFs love this, but be careful. If you offer this, the chances are that many of them will use the offer.
Audio/Visual equipment - Don’t forget to highlight all of your incredible meetings and events equipment.
Customized food and beverage options - Ask them for their preferences, budget, and dietary requirements to design the best meal- package for the event.
Complimentary parking - These are great add-ons. The SMERF typically books its events during low-peak seasons, so the chances are that your hotel has empty parking spots anyway.
Complimentary access to your facilities - Got a spa? or a Fitness Center? Make sure to highlight that they’ll get complimentary access to these if they select your hotel.
6. Think About Your Room Allocation
It’s not uncommon for attendees in SMERF events to know each other before coming to the hotel. These guests often appreciate it if you can arrange the rooms for the group near each other. If it is an elderly group, why not allocate these rooms close to an elevator! Sometimes, as simple as reaffirming this to the decision-maker can make or break the deal.
7. Pamper Their Group Leaders
Another great way to seal the deal is to pamper decision-makers in their group. The best way of all - it doesn’t have to cost a single dime.
Suppose it’s a large group, it’s good to give them a complimentary upgrade to a suite. If it’s smaller, they’ll probably be happy with one or two-room category upgrades. Aside from this, always give them some welcome gift, whether a basket of fruits or just a handwritten note thanking them. Make sure to stay attentive responsive throughout their stay.
8. Use Up-Selling Techniques
When negotiating with properties, SMERF groups always have their own strategies. They are tough negotiators and focus on getting the most value at the lowest price. Often, many of them are non-profit organizations or have limited funding, but that doesn’t mean that their attendees have limited funds.
Here are a few ways you can get more revenue from their attendees:
Offer discounted prices for additional nights (e.g., the day before the event or after).
Give them lucrative room upgrades when they check-in.
Discounts in treatments in your spa and wellness.
Sell tickets to sightseeing or attractions nearby.
Conclusion: 8 Strategies to Increase SMERF Sales in a Hotel
The SMERF market segment may generate lower revenue than other segments. But they are as important as other groups.
They’re fierce negotiators and always look for the lowest prices because of their limited funds. But their lower room rates are compensated by their important business in the low season periods.
We’ve presented a couple of strategies that you can deploy to bring more SMERF business:
Start re-initiating contact with them as they are already in their planning for 2022/2023.
Work more efficiently, target the best-fit accounts.
Target new SMERF Groups within your local community and give them referral bonuses.
Understand their underlying needs better.
Add value to your offer, instead of purely focusing on price as a factor.
Locate attendees close to each other.
Pamper their group leaders / decision-makers with complimentary upgrades.
Try to get more incremental revenue by using up-selling techniques, discounts in your spa facility, and selling tickets to local attractions.
Now, to effectively implement the above-mentioned strategies. It is important that you have hotel sales software or customer relationship software in place to maintain the relationship throughout - and after - the sales cycle.
Here at Metasphere, we offer lead management solutions for individual hotels and multiple properties that are perfect for this purpose. If you're ready to convert more leads into customers and increase your sales, click the link below to check out our system. There are no strings attached!