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Marketing Strategies – Focus on the Bad


“Way back in 2008”, the Vice President of our analytics group spoke at a corporate meeting about marketing strategies for 2014.  He said “We were all continuously saying”, he continues, “it’s all good”.  “Today, we no longer use the 2008 phrase, but we continuously compliment every action taken by anyone inside our companies no matter how insignificant.  We see emails back and forth about how amazing everyone is and how hard we all work, then we sit in long budget meetings to talk about how we are not making our numbers”.  He concluded.


How does that happen and who is to blame if anyone?


Is it marketing’s fault?  Did sales mess it up for us?  Was it the economy, more inventory on the market, price cutting by our competitors, or can we simply blame it on Obama’s new Affordable Care Act?  The answer is nobody inside our company really knows.   The reason we don’t know is because we spend little time analyzing failure and all of our time commending each other for a job well done.  While we do not suggest stopping the flow of emails regarding a job well done, we also suggest investigation into the continuous crisis discounting and the number of incidences of these types of activities.


We created an Incidence Index to help guide our marketing and sales efforts.  The index is a chart that details the number of times in one year that we have crisis discounting and track increases in these activities.  We have noted a considerable increase in the use of crisis discounting or pricing over the last three-year period to the point where crisis discounting has become part of daily life at hotels and resorts.


The Valorem team tries to understand why bad things happen and how often they happen.  Is it normal to have crisis discounts across Online Travel Agents 24-48 hours prior?  If so, should the meeting atmosphere about not making our numbers really be a nice meeting about what has become standard operating procedure?  If sales are down, then automatically open the flood gates by reducing prices.  Cant we put this into our Pallisades program and let it run without holding continuous meetings to scold sales for their inability to make good on their plans?


What we have noticed over the last five years is that while marketing creates those beautiful and amazing marketing plans, which we all praise, with amazing strategies to grow and increase revenue embedded, the effectiveness of the plan is low.


In our Valorem Group offices we have two camps of thought, one that believes that it is the process of writing a marketing plan and the other that believes that it is the use of a plan in a flexible age.  The first camp simply states that little time has been put into thinking about the best plan while the latter is concerned with the inflexibility of the plan.


While we wont bore you with a discussion about these two, we do want to go back to measuring failure as a path to success.  We have measured the incidences of price decreases within 24-48 hours across a three-year period and have noted considerable increases in most of the companies analyzed [see, we used the word increases which is a positive word, to refer to the rate of failure, which we think you should send us a kudos for].


So to get down to the grain of it all, we take existing marketing plans with elaborate calendars and match it to the incidences of price decreases in a crisis mode.  We analyze the cost of the marketing action, whether advertising, email campaigns, etc., and then identify those marketing practices which have had no impact on reducing the number of crisis events.  We identify the weakness in the marketing plan and come up with solutions that will work.  That doesn’t mean throwing solutions that have always been thrown at a problem in the past, it means giving some long and serious thought to activities and results based on your company’s Incidence Index.  If you set as a goal to reduce the incidence of crisis discounting, you would be better off than setting the goal to increase revenue.


We then help marketing gurus get their groove back on by opening the doors to a broader look at the market and competitive set.  The competitive strategy of price cutting is standard and we should plan on it, not use it as the excuse after plans fail.  We need to prevent and establish countermeasures without competing on a lower price point.   We stop and consider increased room inventory counts in our areas, competitive new market entry strategies, new airline lift in or away from your area and other market components that will always affect your plan, but are considered with less frequency.


We suggest you start your own incidence index at your property and gauge the effectiveness of your planning.  If you want some ideas, reach out to us at any time.  If you would like to see more tips about marketing, please click here

Marketing a resort – defining your competitive set

Defining a competitive set

defining Your Competitive Set

Marketing a resort – Defining your competitive set.

I have been asked to create an almost step-by-step game plan in the development of a marketing plan for resorts, and am going to make the attempt.  I have been teaching 4th year Marketing Strategy and Entrepreneurial Marketing at Florida International University for 10 years as well as two years at the University of Miami, and while I will always recommend taking a marketing course, I will try breaking this marketing plan process into several postings so as not to bore anyone.


Before we dive right into the resort marketing plan, there are a few things to consider, of which how to define your competitive set is crucial:


  1. Your competitive position.  It is important to understand who your real competitors are, both online and offline.  If you were a South Beach hotel, you would consider your competitors resorts of similar star ratings, similar room counts and similar location for example.  This would be a good physical competitive landscape and is fairly easy to determine.  Now that your physical competitors are defined, ask your Search Engine Optimization agency to help you identify your online competitors.  As the digital space grows, you will find competitors for your same keywords you did not consider in your competitive set, but the search engines are placing them in organic links below yours.  Your guests may be driven t these sites and those resorts may take a bite out of your online digital keyword space and overall market share.



What happens if you mistakenly create a bad competitive set or a broad competitive set:  The following happens:



    1. If you start with an unfocused competitive position, you may find yourself in a “me too” environment with “me too” customer value.
    2. Yes, without having a clear competitive position both online and offline, you will clearly add no value to the customer experience and will find yourself scrambling to chase every trend on the market;
    3. while retaining no customer loyalty whatsoever;
    4. and with very volatile market share.



Sound familiar?  I see it in too many cases.  It’s fairly simple to discover who your competitors are. I suggest a simple exercise as follows:



  1. POC (Point of Comparison):  In this case your look at our competitors and try to see where you are similar.  Obviously, the least points of similarity you have with your competitive resort, the less likely they are truly in your competitive set. The more POCs, the more closely you resemble your competitors, the more likely you are to strive to a customer satisfaction strategy that is not trend driven (i.e. setting up ipod stands in the room connected to the radio), but customer focused.


  1. POD (Point of Differentiation):  After you have found the similarities, now discuss what’s different about you.  This I have found over the years, will also help you start [if you have not already], delivering an amazing guest experience.  Yes, a happy hour with the GM is a POD.  Yes, tea at 5 pm in your Zen garden is a POD.  Yes, free breakfast buffet is a POD. Once you’ve done that, now create your competitor’s PODs.  Please be realistic.



After this exercise you will know who your competitors are and what makes you different.  From that you can start building your SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, which is really the first step in a resort marketing plan.  I think however that I will spend a little more time in the next few postings dedicated to customer focused strategies and the profit impacts of dissatisfaction.


Stay tuned, and please ask as many questions as you like even while remaining anonymous.


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