When I was needing to increase some winter business for our new boutique hotel, I was lured in by the seductive marketing of Groupon and Living Social. Their promises of promoting our business to a giant platform of people (the visibility alone) caused me to get goosepimples and palpitate!
Of course, in order to get the most traction, I “needed” to discount greatly and add some swag while I was at it. They said I should deeply discount our room rate, and then add wine, treats, etc. After our discounts, then Groupon takes their giant chunk/cut.
We were excited to put together this kick ass package. We were proud to source some amazing pseudo local delicious vegan (couldn’t tell!) truffles from Missionary Chocolates and added some fantastic local wine to highlight the wonderful wineries. We were ready to go.
Groupon was right. We got exposure. The phones blew up! We were hustling our buns to keep up and to make sure we had enough of the addons to supply the booking demand. It was exciting to hang up the phone after having booked a room and have two messages waiting to be returned!
We put our best foot forward for these new folks, ready to enfold them into our boutique hotel fan club family. Their emails were added, they were welcomed with open arms.
We were high on anticipation of this exposure translating to some big long term increases in bookings.
That didn’t happen.
Hardly ANY people re-booked! Most of these guests ended up as ‘one offs’. What a bummer!
It was a LOT of work for close to zero profit. We wouldn’t have minded that IF the work translated into repeat customer business. But it didn’t.
Living Social showed us a few more return visitors as their audience was a bit closer to our target market than Groupon.
All in all, none of this really translated to long term increase in business. Why? People love a bargain, right? I do.
However, when I repeatedly visit my favorite local stores, do I expect a discount? No, I frequent them because I love their products and service. I’m happy to pay for what they offer. (I do love me some extra something-something once and a while.)
The same was true for the hotel. Our target market guests weren’t bargain shoppers. They didn’t seek us out because they wanted the cheapest room. Instead, they were looking for a quality experience. I was talking to the wrong audience with Groupon and Living Social.
Discounts are an occasional great thing to run in order to treat the regulars and to pull in a new audience. It’s one of the ways to market and get people to begin to move their loyalty to your business. However, this should not be the “go to” unless your business is about bargains.
By always discounting rooms (or your product) it undermines pricing and communicates that we actually aren’t the great deal that we are, at regular pricing. This is definitely NOT the message we want to send! This tweak in perspective helped us to think more creatively.
How do we attract and reward people without constantly discounting our product or service?
We can add value rather than discount our value.
- Value Add
Add on something to enhance the Customer Experience. Preferably this Value Add will incentivize them to return (see Hitting the Jackpot Vegas blog).
- Cross Promotion
Partner with a business whose target market is very similar to yours (they scratch your back, you scratch theirs).
- Promote Guests
Who are your top 20? It’s important to know these people intimately. Their referrals are gold because they are friends with people like themselves. Are they filmmakers? Writers? Cyclists? Etc.? Ask permission to promote the cool thing they’re doing. Use your audience to point to their work project or life goal.
- Promote Events
Promoting local events and offering a value add (like tickets) to that event is a great way to entice new folks. Be sure the event facilitators know about your “deal” and see if they will push out to their audience too.
These are just a few ideas/suggestions to change perspective from discounting value to adding value.
What promotions have you run that have delighted your guests and increased your business?
Grow your business through creating excellent Customer Experiences