Do you ever wish you had a formal business background to help you with your Airbnb decisions? We're having a proven system for success help you feel more confident as an investor?
If these questions sound familiar, you need to listen to Episode 32 of the Host Coach Airbnb Investing Podcast where we're going to guide you through the four P's of marketing and how they specifically apply to Airbnb so you can make an educated decision and fast track the success of your Airbnb property.
Read on to know what to do differently to stay ahead of the new, emerging Airbnb trends, and exactly what we’re doing, so you can Find your Where, Make it Pop, Price for Occupancy, and Optimize for Rank to succeed as an Airbnb investor.
Topics discussed in this episode:
- What your “product” is as an Airbnb host
- How nightly pricing impacts your listing rank, bookings, and bank account
- How to use key parts of your Airbnb listing to promote your space to its fullest potential
- The importance of choosing and mastering the right OTA for your short-term rental
The Origins of the Four P’s
Let's jump in! Having both a master's degree and a bachelor's degree in business and having built several successful companies, one concept has stuck with me and served me the best over the years that is an understanding of the framework of the four P's of marketing.
So, I want to share that knowledge with you. Buckle up, this is going to be a more business focused episode. But first we need a brief history lesson. Professor and author Edmund J. McCarthy created the four P's while teaching at the college of commerce of the university of Notre Dame. His ideas were revolutionary and are still highly valuable today, serving as a cornerstone for analyzing and optimizing marketing strategies.
So basically the four P's are a marketing mix. That's product, price, place, and promotion used when marketing a product. And today we're going to apply them to an Airbnb investment property to help you create the right business mindset to succeed as an investor.
First P: Product – Crafting the Perfect Guest Experience
What's the first P? The first P is product. As you're working on your product, it's really important to consider your potential customers and their unique needs. And there are a few questions to consider when working on product. The first one is what is your product? In our scenario, it's a getaway experience.
What does your product do? As an Airbnb, we provide short term accommodations, recommendations, and amenities to guests in a specific area. Does the product meet an unfilled need or provide a novel experience? This is where you look to make sure your market isn't saturated with other Airbnbs and pick amenities that give your guests unique experiences, things like my favorite basket chair, fire pits, kids, teepees, maybe even a zip line.
"Who is your product's target audience?" Knowing if your guests are couples, families, business travelers, hikers... any of these things can help you tailor your description and the design of your Airbnb with those types of guests in mind to really attract them and make them realize that your property is perfect for them. Maybe having enough of those amenities to attract all of those groups of guests.
How is your product different from what others offer? This question really helps us frame the idea that We don't want a cookie cutter property as an investment. Don't just buy an Airbnb, invest in an area you love with nearby attractions and amenities that will set you apart from your competition. We preach this day in and day out.
Second P: Price – Finding the Sweet Spot
Our second P is price. Price is obviously the cost of the product, the cost of the stay. And when marketing a product is important to pick a price that is simultaneously accessible to the target market. And, meets your business revenue goals, covering the mortgage at a minimum different pricing can have a significant impact on the overall success of your Airbnb.
For example, if you price your nights too high for your target audience, then very few people will book your property. Similarly, If you price your nights too low, your calendar will be full, but you didn't maximize your earnings potential for that property.
To identify a successful price, we want to thoroughly understand the target audience and their willingness to pay for your product any given day. Some questions you might ask yourself, When considering price is what's the price range of your competitors?
And this really comes into play when you're evaluating a market, right? Before you buy, what are the nightly rates that similar properties in that area are getting? And is that going to meet your business goals. Is it going to meet your mortgages? Danielle just said, Is it going to meet your return on investment goals? We can use AirDNA to get a lot of data about average daily rates to determine if that market is going to support the investment. AirDNA's data for average daily rates, I find to be very accurate.
Dynamic Pricing for Maximum Occupancy
The next is what's the price range for your target audience. This is where dynamic pricing is going to come into play. Dynamic pricing is going to help us adjust for seasonality, days of the week, special events that you might not even be aware of. In addition, we're always striving for 90 percent or better occupancy and the only way to do this is to closely monitor our near term occupancy, over the next 15 days.
Next Tuesday night is not going to have the same audience or demand due to its proximity to today. This is where we bring out additional discounting. In addition to what your third party dynamic pricing tool is doing, this is where we want to monitor near term.
Vacancy and Occupancy
We got to put those nights on sale. It's like having the sale rack, it's like having that sale rack at the store when it's end of season, you got four pairs of shoes left and we just got to put them on sale. Start discounting, say 5%, save 10%.
We're looking to find a buyer for that night. Your property and your distribution partner, your OTA, Airbnb, nobody's making money if that night goes on book. So we need to find a price to find the market, to find a buyer for every single night and keeping track of your vacancies in the near term and manually going in and discounting those nights until we find a buyer is the way we adjust price.
Third P: Promotion – Market Like a Pro
The third P is promotion. The entire goal of promotion is to communicate to consumers, potential guests, that they need this product and that it is priced appropriately. Promotion in this case boils down to your copywriting. It's everything you write in your listing and every word you use to communicate its value to your guests.
This is why it's so important to take your time and write amazing titles that promote your property and its amenities. For example, one of our places is called Modern Mountaintop Retreat with Hot Tub and Fireplace. It conveys exactly what it is - it's a cabin, but it's modern. It's on top of a mountain and it has a hot tub and fireplace. I can see it in my head without even seeing a picture like, "Sure, I want to stay there." This is also your listing description that paints the picture of the experience your Airbnb provides. You're selling the dream to potential guests. They're not booking a place, they're booking an experience and the dream of what it's going to be like to stay in your property.
Write Engaging Photo Descriptions
This is the descriptions you write under your listing photos. Each description is another way to promote and convince your guests that your Airbnb is the perfect place for them to book a stay. So what do I mean by this? Instead of writing, "Kitchen" under the kitchen photo (which we see a lot) consider something along the lines of: enjoy cooking meals with family and friends in our well-stocked kitchen or instead of "hot tub" describe that experience: Unwind in the hot tub surrounded by nature and enjoy stargazing in luxury. I think anyone that reads that wants to do that!
Nail Your Guest Messaging Strategy
Promotion also encompasses guest messaging so once you have an interested potential guest, it's essential to convert them into a booked guest.
Quick responses are key to showcasing that you are a host that cares about your guests and you're not going to leave them hanging if there's an issue during their stay. Seriously, if a guest asks a question and has to wait 48 hours for an answer from you, they're not going to feel confident in your commitment to hosting them, and they're most likely going to book somewhere else.
The good news is this isn't all on your shoulders. You don't have to be checking your phone 24/7. Hospitable automates messages and helps you deliver them automagically within seconds. Thoughtful messages are also part of the promotion. I guess inquiry immediately receives a message saying "We would love to host them" with a few answers to frequently asked questions and a call to action saying that our nights are booking quickly.
When a guest books, they should receive a confirmation that includes area attractions, restaurant recommendations, and anything else you can include to help them plan their ultimate stay in your Airbnb and the surrounding area. We call this "our concierge message". We also send a message 24 hours after guests check in to make sure they're happy and ask if there's anything we can do to make their stay more enjoyable.
If you have a great place and excellent pricing, but don't deliver on promotion, you're not going to get the maximum revenue out of your Airbnb investment. So put in the effort on your listing, copywriting, and messages. I promise that you will reap endless benefits for your diligence in communicating the value of your property and the value of that experience to the guests.
Fourth P: Place – Choose the Right Booking Platform
The fourth P is place. Place is really distribution. Where are people going to find your product? Places. The consideration of where the product should be available to the consumer, the guest.
There are multiple OTAs, online travel agents, Airbnb, VRBO, booking. com, or even your own direct website. For example, I mentioned shoes before. Let's say you have a unique, fancy, high end shoe that you've designed. You're probably not going to get them carried in Neiman Marcus and Walgreens and selling them out of the back of your car.
You need to make a decision about where your target consumers are shopping and , you need to pick a channel, a partner that's going to fully support you. Is Neiman Marcus really going to send out ad flyers and give you prominent placement if they also know that same pair of shoes can get picked up by the consumer at Walgreens? They're not. So sure, you can list on Airbnb, VRBO, Booking. com, and also have a direct booking website, but you should really pick one and master it, partner with it, make the most out of it. Right?
In our case, we favor Airbnb and if you've listed episodes, that's obvious. Airbnb currently has 45 million active users in the United States and VRBO has about half of that, but it doesn't have to be a Airbnb, choose a partner and partner with that partner. Really learn to maximize your exposure on that partnership. Culin always preaches pick a platform, make it your sole platform. We've done multiple episodes on the algorithms and why you're rewarded for having your nights booked on that platform so if you're interested in a little unsure about why, go back and listen to a few other episodes or drop us a note at hostcoach.co and we will help you fully understand where we're coming from on soul sourcing.
So there you have it. You now know the four P's of marketing and how they specifically apply to your Airbnb as a business. You didn't even have to take a college class for this info. You also learn the tools you can use to determine if your investment is worthwhile, as well as ones that will help you with pricing and promotion. So you can confidently make decisions to maximize your Airbnb's cashflow. If you want to learn the best ways to create financial freedom through short term real investing, keep listening to the host coach show.
If after listening to this episode, you feel the need for a short term rental support, we do offer Airbnb coaching packages so schedule a free 30 minute Airbnb coaching session to see how we can help lighten your load and get you to your goal faster!!
