Measuring Success: Key Performance Indicators (KPIs) for Tech-Driven DMOs
5-Minute Read
If you’re like other tech-driven Destination Marketing Organizations (DMOs), you’re not only looking to increase revenue, but also:
- Reduce any unnecessary marketing spend
- Use employee time efficiently
- Narrow in efforts on your ideal customers
Key Performance Indicators (KPIs) are the metrics that showcase how your DMO is currently performing, and they provide the insight needed to make the right adjustments using objective data to refine your approach.
Take a look at the 10 most important KPIs for DMOs (enough acronyms for you?) below. Number 9 might surprise you!
KPI Checklist ✓
- 1.) Percentage of Cancellations, Rebookings + Other Changes
- 2.) Average Booking Value (ABV)
- 3.) Cost per Lead (CPL)
- 4.) Customer Acquisition Cost (CAC)
- 5.) Initial Contact and Response
- 6.) Revenue per Employee
- 7.) Visitor Spending
- 8.) Return on Ad Spend (ROAS)
- 9.) Employee Satisfaction Indicators
- 10.) Conversion Rate
1.) Percentage of Cancellations, Rebookings, and Other Changes
No DMO or CVB (Convention and Visitor Bureau) looks forward to changes in bookings or cancellations. While a certain level of cancellations will always be inevitable, you want to avoid as many changes, rebookings, and cancellations as possible to avoid additional charges on your end.
Determine the percentage of cancellations, rebookings, and changes in each quarter of the year. This will give you a better picture of when and why the changes occur and allow you to make adjustments accordingly.
2.) Average Booking Value (ABV)
If you thought the acronyms were over, they’re just getting started! An important KPI for DMOs is ABV (Average Booking Value). ABV is the average amount of revenue generated per booking.
You can determine your ABV by dividing total revenue by the number of bookings in any given period.
Ways to improve your ABV include:
- Increasing your pricing if necessary
- Upselling lodging, transportation, and activities
- Offering discounted bundles
3.) Cost per Lead (CPL)
You don’t want to pay an arm and a leg to generate leads through your DMO’s marketing efforts. It’s vital to determine your Cost per Lead (CPL) on each of your marketing channels.
This metric is most applicable to paid ads strategies, but it’s relevant to any marketing campaign you spend money on. Find your CPL by dividing the total cost of your marketing campaign by the number leads it generated.
Rising CPLs may indicate ineffective keywords, inaccurate target customers, or lackluster content.
4.) Customer Acquisition Cost (CAC)
While Customer Acquisition Cost (CAC) may seem the same as cost per lead, there are some key differences. CAC is the total cost of acquiring a paying customer. Beyond the marketing channel where the lead came from, you’ll also consider the total sales and marketing expenses used to get a new customer across the finish line. Divide this total by the number of new customers in a particular time period to determine your CAC.
One of the best ways to reduce your CAC is by leaning heavily into referrals. Consider creating a referral program if you haven’t already!
5.) Initial Contact and Response
Most KPIs are financial-specific metrics, but it’s also important to track non-financial metrics. At the end of the day, KPIs like your Initial Contact and Response time will impact your bottom line.
Determine how many days it takes your DMO to respond to an inquiry and how many days it takes to provide a customer with a quote. See where you can trim the fat to reduce your response time. According to Harvard Business Review, you should be responding to leads within an hour to help keep them from going cold!hat focus on enhancing customer convenience and security. With an increasing number of venues adopting cashless policies, the expectation for major events like the Super Bowl to go fully cashless by 2025 is a very realistic possibility
6.) Revenue per Employee
One of the most significant expenses for any business is their employees. It’s expensive to pay salaries and benefits, so you want to make sure you use your employees as effectively as possible before hiring more staff.
Determining Revenue per Employee helps you see how much money each employee generates for your DMO. Find this metric by dividing your total revenue by your current number of employees.
You may want to narrow this in on customer-facing employees or sales & marketing employees because certain employees (like office administrators) may not have a direct impact on your organization’s revenue.
7.) Visitor Spending
For this next KPI, take a look outside of your DMO’s personal business operations and instead look at the habits of your customers. In destination management, it’s important for your visitors to engage with your community beyond their hotel stay in order to contribute to the economy.
Look at where your visitors are spending their money, including:
- Food & restaurants
- Retail shopping
- Gas & car rental
- Activities & events
8.) Return on Ad Spend (ROAS)
ROI (Return on Investment) is always a vital metric to consider. You want to ensure you’re making more money than you’re spending.
Since paid advertising is a prevalent marketing measure for destination marketing organizations, it’s important to determine your Return on Ad Spend (ROAS). This formula is simple— just divide your revenue attributable to ads by the cost of your ads.
This KPI will clue you in to see if you can target more accurate keywords, include more negative keywords, or adjust your target audience in order to increase your ROAS.
9.) Employee Satisfaction Indicators
In hospitality and tourism, employee satisfaction plays an especially important role. JW Marriot himself has said many times that “you can’t make happy guests with unhappy employees.” A tourist’s experience is greatly dependent on the service and energy provided by the hospitality employees they come in contact with. More positive experiences lead to more re-bookings for your DMO.
You can measure employee satisfaction through regular employee surveys and anonymous feedback options.
10.) Conversion Rate
Lastly, comes one of the most important metrics you can examine: Conversion Rate. Conversion rate is the percentage of people who take a desired action after interacting with your marketing and sales initiatives. This KPI helps you understand how much of your traffic turns into leads and how many leads turn into paying customers.
Determine your conversion rate by dividing your number of conversions by the number of people who visited your website or clicked on an ad.
How to Track Your DMO’s KPIs
Every DMO needs a few helping hands to accurately track their marketing and sales KPIs. Some of these tools include Google Analytics, Google & Facebook Ads, Google Search Console, and call tracking software like Callrail or Nimbata.
Plus, tech-focused destination marketing organizations and tourism agencies love utilizing DIGIDECK for ultra-modern bid books. Beyond striking cloud-based presentations, the DIGIDECK gives valuable KPIs and benefits, including:
- The ability to see how long a user is spending on each page of your bid book so that you can tailor your follow-up and refine content
- Real time alerts to perfect your speed-to-lead response times
- 31% less time spent preparing proposals and bid books
Curious? Let’s get your free demo scheduled so you can see for yourself how DIGIDECK will help you gain insights, save time, and increase conversions.
