I can't stress strongly enough the need to do your arithmetic before using Groupon.

For those of you who believe the damn silly Groupon marketing proposition and are about to believe everything their sales people tell you, set up your kamikaze discount and join the race to the bottom - here's a cautionary few words from the Economist this week...

"In a move that is likely to delay its long-awaited initial public offering yet again, Groupon, an online-coupon website, cut its sales figures by more than half, from $1.52 billion in the first half of 2011 to $688m. The firm cited an "error in presentation" in previous filings as the reason for the change in the latest submission. It had wrongly taken its sales to include the amount it has to pay to merchants when its coupons are redeemed."

It would seem that Groupon can't count either.

Is this a case of the blind leading the blind? Or is the whole idea really an "error in presentation"?

I can't stress strongly enough the need to do your arithmetic before using Groupon.

For those of you who believe the damn silly Groupon marketing proposition and are about to believe everything their sales people tell you, set up your kamikaze discount and join the race to the bottom - here's a cautionary few words from the Economist this week...

"In a move that is likely to delay its long-awaited initial public offering yet again, Groupon, an online-coupon website, cut its sales figures by more than half, from $1.52 billion in the first half of 2011 to $688m. The firm cited an "error in presentation" in previous filings as the reason for the change in the latest submission. It had wrongly taken its sales to include the amount it has to pay to merchants when its coupons are redeemed."

It would seem that Groupon can't count either.

Is this a case of the blind leading the blind? Or is the whole idea really an "error in presentation"?

I can't stress strongly enough the need to do your arithmetic before using Groupon.

For those of you who believe the damn silly Groupon marketing proposition and are about to believe everything their sales people tell you, set up your kamikaze discount and join the race to the bottom - here's a cautionary few words from the Economist this week...

"In a move that is likely to delay its long-awaited initial public offering yet again, Groupon, an online-coupon website, cut its sales figures by more than half, from $1.52 billion in the first half of 2011 to $688m. The firm cited an "error in presentation" in previous filings as the reason for the change in the latest submission. It had wrongly taken its sales to include the amount it has to pay to merchants when its coupons are redeemed."

It would seem that Groupon can't count either.

Is this a case of the blind leading the blind? Or is the whole idea really an "error in presentation"?

The CAP code is in place to protect us all from the influence of naughty marketers.

Naughty marketers aren't always deliberately naughty. Sometimes they make mistakes. Sometimes they are just plain ignorant.

For an example of ignorance, see what happened when someone raised a complaint about a recent De Vere Hotels email campaign.

The campaign obviously assumes that the target market is stupid and that people won't check and research prices and offers. That's a mistake.

Failing to ensure the point of differentiation really existed in and between the offers. That's a mistake.

However when CAP raised the matter with De Vere they received no response. That is not only against the CAP Code, it is also just plain ignorant in my opinion.

As marketers we all make mistakes. The biggest one you can make is to ignore the regulator when they have reason to pull you up. It sets an unfortunate tone...

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...they run up the white flag and run a "flash" sale.

Sad isn't it? Those rooms of yours that are worth "£200 of anybody's money" at the height of the season are suddenly worth less than a fart in a high wind.

So worthless in fact, that the illusion of websites like Groupon Getaways, who have worked out yet another way to sell you snake oil, appears attractive.

Are your marketing skills really so infantile that this makes sense? On any normal day, if your sales team came to you with the following promotional idea, what would you do?

"We want to cut your prices in half, then give someone else half of what's left over so we can sell a few rooms!"

You'd shoot them wouldn't you?? They certainly wouldn't touch the sides on the way out of my office door.

Invest some time and money in proper marketing skills. Get your finger out, find some customers and make them some offers to become YOUR customers. Spend some money to acquire some marketing skills - it might be the only thing standing between you and oblivion - if you think running a third part flash sale is a healthy passtime, oblivion is closer than you think.

To use Online Travel Agent (OTA) sales websites as part if your distribution plan and get the most out of it, you need to understand what your target customers are doing.

You know this already, but it’s worth repeating: People do not land on an hotel website, see a booking box with “book now!” written on it and suddenly feel a compulsive urge to book a room.

It doesn’t happen that way.

This is what really happens:
Continue reading "The Billboard Effect - A guide to what hotel bookers are really doing"

A few years ago I wrote an e-book about selling hotel rooms online. As part of the research I compared OTA revenue growth to hotel industry occupancy growth. What did I find? Let me tell you…
Continue reading "How Expedia Profits from selling YOUR hotel rooms"

The current enthusiasm for “flash” sales to sell hotel rooms raises one important question:

What on earth are the marketing departments doing??

Hotels relying on low price internet offers to sell rooms on a last minute basis tell us a lot about what they’re not doing as far as marketing is concerned.

Continue reading "How to sell rooms in your hotel when demand is low"

Just when you think there's nothing more to say about Groupon, up pops this article, about Groupon Getaways.

Sorry, I just can't contain myself. Fortunately I've found at least one kindred spirit in the debate below the article in the shape of Robert Gilmour.

So, does Groupon really represent the leading edge of the e-commerce revolution? If it does, it represents in my opinion, one of the most silly things you can do with your hotel marketing. If this is the leading edge, it looks like a bloody dangerous place for the hotelier!
Continue reading "Groupon Getaways - the bleeding edge of the ecommerce revolution?"

One of my new clients has recruited a "Revenue Manager".

We sat down last month to look at pricing strategies for the rest of the year.

Nowadays, hotel pricing is full of jargon: BAR; ADR…blah, blah. You know the sort of thing I mean? Well, this chap knew every term and was equipped with a special program on his PC that told him what rates he should be using to sell online every day.

Online sales hadn't been so good, so he calculated the "optimal" prices, and he loaded them online. These were special prices! carefully crafted to wrest sales away from competitors. You might call them "cheap", but I couldn't possibly comment.

This week we were reviewing progress for the past month. If anything, online sales were down.
Continue reading "Hotel Pricing and Getting a Good Deal"

Another Groupon offer for a hotel deal landed in my inbox today.

As regular readers of this blog will know, Groupon offers suit businesses with low marginal costs. Hotel rooms are a good example of a product with a low marginal cost. If you spend £100 on a hotel room, the direct cost of providing that room to you is pretty low. Which means that there is a lot of profit available to the hotelier. Of course the hotelier then has to pay for stuff like heating, rates and refurbishment, but let's not digress at this point.

The hotel "room night" is also a very perishable product. If you don't sell a room night tonight, it's gone. You can't store it and sell it tomorrow night. So hotel rooms which remain unsold are ideal for flash sales. That's what websites like Laterooms were originally designed to sell - rooms that hotels couldn't sell and had no prospect of selling, at significant discounts. It's sometimes called "distress inventory".

But we're talking about Groupon and today's offer. Let's see if it makes sense.
Continue reading "Groupon for hotels - the arithmetic for disaster?"

My thanks to the Lodging Interactive Blog for this post which raises the topic of Google+1 and what it might mean for hotels.
Continue reading "Google +1 for hotels and hotel marketers"

Looking forward to taking part in the Fusion 2 You Roadshow in the Pickaquoy Centre in Kirkwall, Orkney this evening.

We'll be looking at using Social Media and Social Networking websites for business, what they're good at, what they're not good at and what you really need to do if you want to use them for your business marketing.

This was part of my view on the way to work this morning. What was yours like?