Travel and hospitality marketing: Is Groupon a good deal for your brand?

August 17, 2011

Groupon is good for deal lovers. But is it good for business?

A new study found that  almost 7 in 10 businesses made money on their Groupon promotions. But only 6 in 10 said they would do it again.

My wife and I love daily deal websites like Groupon, Living Social and Eversave. But I’ve often wondered if these sites are really good for my clients’ travel and hospitality brands.

A recent study by Rice University found a mixed bag of results for businesses considering partnering with Groupon.

Your success depends on the industry you’re in and if you can avoid cannibalizing on current sales.

  • Among service businesses, salons and spas reported the highest number of successful promotions.
  • Restaurants reported the highest percentage of unprofitable promotions.
  • Businesses in which the promotion did not cannibalize sales to existing customers reported more successes.

1 in 3 businesses reported the promotion was not profitable. And 4 in 10 said they wouldn’t do it again.

  • 66% of businesses surveyed were profitable, 34% were not.
  • More than 40% said they would not run this kind of promotion again.
  • Satisfied employees were the most important factor in determining the success of the promotion.
  • The percentage of discount offered, number of Groupons sold, or percentage of Groupon users who purchased beyond the deal did not predict the deal’s profitability.

If you’re new to Groupon promotions follow these 3 guiding principles in developing your deal:

  • Do the math before you offer your deal.  Figure out your costs, including the additional labor. The rule of thumb is to discount your lowest-cost, highest-margin products and services first.
  • Make sure you prepare your staff, and yourself, for the influx of new and different customers.
  • Remember that Groupon shoppers are discount and value hunters. So be sure to display other products and services that appeal to them, so they’ll come back.
  • Develop a conversion strategy (like a bounce back offer) along with your Groupon offer, to encourage your Groupon customers to return.

Have you used Groupon for your travel or hospitality brand? If so, what did you learn from the experience?  If you decided against Groupon, why?


Travel and leisure marketing in a natural disaster: Orbitz and the Gulf Oil spill.

April 13, 2011

There are two ways a travel marketer can respond to a natural disaster. During the gulf oil crisis, Orbitz showed us the right way.

As crisis after crisis unfolds across the globe, many travel and leisure marketers are asking, “Is it appropriate to keep marketing during times like this?”

During the Gulf Oil Crisis, the Orbitz “Open Beach” guarantee helped save Florida’s Gulf Coast.

At that time, Florida hotel rooms were worth as much as the oil gushing out of the BP wellhead at the bottom of the Gulf of Mexico.

Just as everything seemed hopeless, a massive relief effort was announced to protect the state’s hotels and beaches.

But it wasn’t BP or the U.S. Government that came to the rescue.  It was the online travel booking site Orbitz.

In a matter of days, Orbitz put together a powerful “Open Beach Guarantee” with  123 hotels in 16 cities up and down Florida’s Gulf Coast.

This announcement appeared on Orbitz' website at the height of the crisis.

How the guarantee worked.

If you booked hotel reservations that weren’t part of a package deal in any of those hotels, and the government closed a beach within twenty miles of that hotel, you got a full refund.

On its website Orbitz listed the hotels offering this deal, the cities they were in, and even a daily visual forecast of the projected trajectory of the oil spill.

There was nothing pious or self-serving in this announcement.

In a press release that accompanied the announcement, Orbitz spokesman Brian Hoyt refused to get pious.

“It doesn’t really help us if we send someone to a beach with oil,” he said. “The travel industry has been dramatically impacted by this, and our role is to help our partner hotels.”

What leisure marketers can learn from Orbitz’ response to this crisis.

With this one simple act,  Orbitz demonstrated the kind of chutzpah that every marketer of a travel or leisure brand should strive to develop.

They showed us that there is a way for travel brands to protect their profitability and integrity during a crisis.

And they offered a clear path for hospitality brands around the globe who have been affected by natural disaster or crises.

Has your travel brand been affected by events that affected your very existence?

How have you continued to market during times like these? How did you get through your crisis?


Leisure marketing: Will the rise of Kindle spell the end of our favorite leisure activity?

February 23, 2011

The Kindle may kill off the traditional book. But open up a whole new world for gadget freaks.

It’s official:  The leisure world as we know it is dying a very quick and painless death.

The evidence:  Amazon just reported that for every 100 paperbacks sold over the holiday season, they also sold 115 Kindle books.

In the words of the tech blog Dvice, “It looks like dead-tree books are going the way of the vinyl record.”

If you’re a leisure marketing specialist you may feel threatened.

Especially if you’re marketing a legacy brand like a chain of movie theaters or full-service restaurants, you might be wondering, “Are we next?”

I agree that the Kindle threatens our very way of relating to free time.

It may even alter the amount of time we spend on our most revered leisure activity.

I’m not talking about reading. I’m talking about watching TV.

In the latest American Time Use Survey conducted by the U.S. Bureau of Labor Statistics, the average American spent 2 hours and 48 minutes each weekday watching TV.

And 14 minutes a day reading.

That’s the average.

If you’re 15-34 years old, you’re spending spends 10 minutes a day reading.

Now enter the Kindle.

Granted, it doesn’t look or feel or smell the same in your hands as a real book. But it has a few advantages.

It doesn’t kill any trees or require any inks or dyes to make. We don’t waste fossil fuels or paper products boxing and shipping it. So it’s cheaper to buy and easier on the environment.

It doesn’t take up any space on a bookshelf, so you can fit an extra chair in your study. It’s easier to hold on a crowded train or a bus.

But what I like best is it’s turned the book into a gadget.

You know who likes gadgets?  The same people who up until now didn’t read.

15-34 year olds.

Yeah, those same guys who would rather watch TV or play video games are now buying Kindles.

Last time I looked 1 in 3 Kindle owners were under 40.

That’s a good thing for the book industry.

And a good thing for 15-35 year olds who until now spent an average of 10 minutes a night reading.

Thank you Amazon. Got any more tricks up your sleeve?


Leisure marketing: 1 in 3 active Americans prefer shopping online.

January 26, 2011

Active Americans shop online for the variety, and leave because of shipping costs.

But 1 in 2 who visit a site will leave without buying anything because of high shipping costs.

Active Americans are your core target if you’re marketing to outdoor or action sports enthusiasts.

One of my favorite tracking studies of leisure consumers is a monthly panel of 2,369 Active Americans conducted by Leisure Trends Group (LTG).

In all this LTG database totals 2.8 million highly active, highly engaged consumers who participate at the enthusiast and elite levels of a wide variety of activities.

LTG refers to them as “alpha consumers,” but if you’re a CMO doing leisure marketing to outdoor or action sports enthusiasts, these are your “peeps.”

Convenience, price and lack of sales pressure entice active Americans to shop online.

Awhile back, LTG asked these people where they like to shop. I’m around these guys all the time (In fact my partner Chris falls into this profile) and thought I understood their every motivation.

But I was surprised to find out that 1 in 3  actually prefer to shop online.  The reasons?  Convenience and price, followed by variety and a site that’s easy to navigate.

Of those who shop online, 1 in 2 say they like the lack of sales pressure.

Source: Leisure Trends Group

Just because they like to shop online doesn’t mean they like to buy.

Only 16% of Active Americans say they trust what they read on online shopping sites, compared to 39% who trust what specialty stores tell them.  One half say they need to touch before they buy. And 2 in 3 will abandon an online site because of shipping costs or the site is too hard to navigate.

Prices will drive them away, but e-mail can bring them back.

In a follow-up question, half of the Active Americans surveyed said they would be more likely to shop at their favorite specialty store if the store communicated with them by email.

What messages would bring them back to the store?  Special offers (93%), new products (58%), and events (55%) got the most votes. As for frequency, 7 in 10 wanted to see that email promotion no more than once a month.

How these findings should alter your leisure marketing strategy at retail and online.

If your leisure marketing objective is to attract more Active Americans into your bricks and mortar locations, stop selling exclusively in store, and start using more email blasts.

Train your sales consultants to offer friendly advice and load the store with free information.

But if your objective is to attract more Active Americans to your website, offer free shipping and simplify the navigation of your site.

If you want to do both, invite them into your store to touch the merchandise, then remind them if they aren’t ready to buy now, they can order it online later, and get free shipping.

What are you doing to attract active Americans to your online shopping portal?


Leisure marketing: Online holiday shoppers start much earlier.

August 20, 2010
Computer mouse chord shaped like a Christmas tree

More and more internet users are starting their holidays shopping early.

A survey by Google and OTX found that 35% of internet users are starting their holiday shopping before summer has even ended.

Leisure marketing pros take note: The internet is changing the way people do their holiday shopping.

A new survey by Google and OTX Research found that 21% of internet users have started their online shopping by May.

And another 14% start their shopping June-August.

Which means that 1 in 3 internet users are starting to buy their holiday gifts online by the end of August.

As many holiday shoppers now shop early as shop late.

Thanks to the internet there are now equal numbers of people shopping online for holiday gifts May-August as there are people who shop in November-December for their gifts.

What the research doesn’t spell out is why people are shopping online so early.

But I hope you don’t need research to confirm what I’ve written about in previous posts. Any leisure marketing CMO knows why people shop online, whether it’s early or late season:

  1. Price.
  2. Convenience.
  3. Ability to shop on their timeframe.

Don’t miss this golden, green and red opportunity.

If you’re a leisure marketing pro who sells your products or services online, make sure you are taking advantage of this new trend in e-tailing.

  • Don’t wait to manufacture and promote your hot selling holiday items.
  • Start promoting them in the spring.
  • Offer sales and discounts in spring and summer.

Right now leisure brands are not promoting holiday specials early in the year, but there are no rules of e-marketing that say you can’t try to speak directly to these early shoppers.

  • Consider creating a special place on your site for early holiday bargain hunters.
  • Try a special sales event created just for early holiday shoppers.
  • If you’re selling your products through others sites, create a special pre-holiday promo with your retail partners.

That’s what we’re recommending to our clients selling at retail.  Let us know what you’re planning to do differently this year to capture more business from the early holiday shopper.

You can read more about this study at e-marketer.



Leisure marketing: Could online purchases be pushing outdoor products in a new direction?

July 20, 2010

The recession may be pushing outdoor specialty store customers online.

If you’re marketing outdoor leisure products and services, it may be time to adjust your specialty retail strategy.

A 13% increase in overall outdoor sales is hiding a larger truth.

Leisure Trends’ Outdoor RetailTrak just released its latest report for the outdoor segment (outdoor chains, specialty and online sales).

Sales are up 13% over last year. But the real news is that torrid online sales are hiding a continued slowdown in specialty retail.

It was another flat month of sales at specialty retail stores.

  • Online sales accounted for 22% of last month’s total sales, up from 17% last year and 14% in 2007.
  • That’s almost a 50% gain in dollars old compared to last year.
  • By comparison outdoor specialty stores were flat for the same period.

Why has growth slowed for outdoor specialty stores?

  • It seems to be a category-by category problem.
  • Recreation tents, packs, camp accessories and footwear have sold well.
  • But other categories like apparel are suffering.

Could this signal a longer-term shift in buying patterns?

  • Various studies indicate that the prolonged recession may be affecting buying patterns.
  • Consumers are looking for better deals.
  • And shifting to channels that give them more choice and more control.
  • In the short-term, this trend favors online channels and will continue to hurt specialty retailers.

What can you do to stay competitive in this environment?

If you’re a leisure marketer selling your products through all three outdoor channels:

  • Do more online promotions to drive consumers to your online outlets.
  • If you brand is too small to put your own online promotion together, participate in your retailer’s co-op programs.

If you’re a specialty retailer, optimize your website for search engines and shoppers.

  • If you don’t know what I’m talking about read this post.
  • In advertising and promotions, encourage your buyer to check you out online.

Take advantage of this year’s hot trends: footwear

  • Hiking boots, winter boots, trail running shoes, multisport shoes and sandals are all outperforming 2009.
  • Specialty retailers who participate in the LeisureTRAK reporting all expect sales of those items to stay high through the back to school season.

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3 ways Google’s new indexing engine will bring profound changes to travel and leisure marketing.

July 14, 2010

Google Caffeine indexes the web 50% faster than Google's old engine. What does that mean to you?

Caffeine’s lightening fast indexing speeds will create new opportunities for travel and leisure marketers who are quick to react and willing to experiment.

Click Z published a fascinating article by Gary Stein recently on the profound effects Caffeine’s faster, fresher indexing will have on online marketing.

That was then. This is now:

  • For the last decade, Google has used the 80/20 rule to indexing.  Since 80% of the content on websites stayed the same, their crawlers focused on indexing the  other 20% of the content that changed.
  • The web today is about sharing real-time experiences, which requires indexing more content more regularly.
  • To keep up, Google has updated its indexing technology to collapse the time between when a website updates its content and when it’s viewed.

3 ways Google Caffeine will change the way you do leisure marketing online:

1.  Updating your content will become more important than ever.

Google’s spiders are more attracted to new content than ever before.  So updating must be a part of your online marketing strategy.

And the easiest way to for a leisure brand to do this is through social media. Just make sure your content is still relevant to your site’s core topic.

2.  Experimentation and exploration will become the norm.

Because Caffeine indexes with lightening speed, you will be able to experiment with new ideas and see the results quickly.

Then adjust your strategy based on your findings.

3.  Keeping an eye on your competitors will become a much higher priority.

A shift in the index is going to cause a change in your rankings. And constantly shifting content will cause your rankings to change with greater speed.

So pay close attention to where you are relative to your competitors. And when the rankings start to shift, see what changed in your content and your competitors’.  And react accordingly.


 


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