How To Imprison A Customer

A few months ago at a hotel in the Lake District ~ somewhere I’ve stayed on many occasions before. It’s an excellent hotel, and clearly successful. Part of the success is down to the quality of accommodation and service, but there are plenty of excellent hotels which struggle commercially.

So what’s the difference between success and failure in the hotel business? As with most businesses, marketing has a big part to play.

The hotel owners use a lot of online and offline methods to attract new customers, and to encourage old ones to return. They’re also very hot on matching demand to supply through price flexibility. If they sense a slack period, then they’re very quick to email their client base with an enticing special offer. Like an empty airline seat, an empty room in a hotel for an evening is gone forever. Almost any contribution is better than nothing.

There’s an important lesson there for a lot of businesses, I think. It’s difficult to generalise, but it could be worth considering whether you could be more flexible on price at certain times, and how you might market and manage this flexibility.

One aspect of this price flexibility is particularly interesting, and could have a wider implication or application for your business.

A couple of times when I’ve stayed at this hotel (but not every time, so I know it’s genuine) a letter has been pushed under my door on the evening prior to departure, explaining that the room I’m in hasn’t been booked for the following evening, and that if I’d like to stay for another night, I can do so for half price. This is one of those win-win situations, which a lot of businesses could take advantage of, but very few do.

From the hotel’s point of view, they have an empty room to fill. I’m already in it, so there’s a reduction in preparation costs for them if I stay, as compared with a new guest. There’s a strong inertia element working in their favour. To take up the offer, I need do nothing. From my point of view, I get another night at a vastly reduced price. And the inertia is good for me too. I’m lazy, and don’t really want to pack up and go home, or move to another room.

I think any business that rents or hires out anything, could benefit from using this approach, and it has wider applications too. Is it not worth making a ‘please stay’ offer to any customer who is about to ‘depart’ from your business – whatever field you’re in? Given that the cost of finding and serving a new customer is always far more than the cost of continuing to serve an existing one, I’m certain that it is.

This whole idea needs to be thought out and implemented carefully though, if you’re to avoid damaging your integrity or alienating excluded customers. But just because it isn’t easy, doesn’t mean you shouldn’t do it.

I’ll leave you to consider how you might apply this in your own field.

Kind Regards

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John Harrison  


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