Let's start with a positive example.
An upscale hotel located at one of the national parks in the United States typically
experienced very high demand during
the spring and summer seasons but very low demand in the middle of winter.
For a number of years,
this was simply accepted by
the hotel's general manager and sales staff as a fact of life.
Even though the hotel possessed a number of features that were enjoyed by its guests,
it was difficult to experience many of
the wonderful features of the national park in the winter.
And that was thought to be the primary draw of bringing people to the hotel.
Over time, a new pricing director was brought in.
Being relatively ambitious and not too
comfortable with simply accepting things as they are,
the pricing director wondered what could and should be
done to stimulate demand during the winter months.
Rather than simply tasked her staff to come up with a proposal for stimulating demand,
she scheduled a brainstorming session and
invited other departments to have a representative at the session.
Representatives came from departments beyond simply sales and marketing.
Other departments included food and beverage,
operations, finance, and housekeeping.
Many ideas were brought up.
As you might have guessed,
offering a substantial discount was one of them,
although concerns were raised about
the potentially negative impact that
a broad discounting program would have on the hotel's image.
During the discussion, several key issues surfaced.
As the hotel was in a relatively remote area,
it was noted that very few guests stayed for only a single night.
Also, it was observed that the vast majority of guests who stayed
at the hotel did so because it offered a unique experience.
Price was not necessarily uppermost in
the minds of guests even if it might have mattered.
The food and beverage representative gladly contributed the information that
guests frequently commented that they ate so well during their stay,
that the food alone would have made their trip worthwhile.
Eventually, a basis for a program began to emerge.
What if past guests were invited back during
the hotel's slow period and offered a free night during the winter period?
No strings attached.
The invitation was simply a way to say thank you for having stayed with us.
It was widely believed by hotel staff that the location
of the hotel was such that almost everyone who took
advantage of the offer would elect to stay
at least two or three nights simply because of the hotel's location.
To make the offer even more attractive and also to generate additional revenue,
special events such as
cooking presentations could be arranged by the hotel during the winter,
providing another way to generate revenue.
Participation would be limited making signing up for these events even more attractive.
As ideas for the program took shape,
each department was able to make suggestions on program elements.
Invitations were sent out,
and the hotel's staff waited to see what type of response they would get.