Ms. Knutson

Sales & Marketing

Niche Your Wagon to a Star

By Bonnie Knutson, Professor, The School of Hospitality Business/MSU

Ralph Waldo Emerson is one of America's most famous writers. We all studied his works in school ( ...and yes, sometimes we wondered why). Over 150 years ago, he wrote an article that appeared in The Atlantic Monthly. In it, he told readers to hitch their wagon to a star. In his way, he was saying: Go with the flow. Follow the rising tide. Seize the Day. Jump on the bandwagon. That is not only good advice for life, but for your hotel business as well. It is easier to be successful if you are on-trend with what guests are looking for. But in today's highly competitive, mega-merger, boutique, private equity, and over-communicated lodging environment, hitching your wagon to that star is not enough. You have to niche your wagon to a star.

In business jargon, a niche is simply "a special area of demand for product or service" because it offers consumers "a situation or activity specially suited to a person's interests, ability or nature." In other words, a niche simply matches what I need or want in a lodging experience to what your hotel can offer me. The key is in the matching. So how do you effectively make that match? It is simple. Just follow the five points of the star to which you can niche your wagon

- Meet their unique needs in a unique way. Marketing guru, Jon Spolestra, calls this differentiate until you sweat. Today, it is not enough just to be good, or even better. You have to be seen as offering something that is different. Look at the Hotel Allegro, located in Chicago's popular Loop Theatre District. It features dramatic decor in a hip upbeat environment that celebrates the arts in Chicago. Its decor mixes the classic and contemporary, thanks to the vision of award-winning designer Cheryl Rowley, who has preserved elements of the building's original 1920s design, while incorporating deluxe, modern furniture, looks and textures. In fact, with help from the Chicago Convention and Tourism Bureau, ten of Chicago's most luxurious and exclusive hotels joined forces to create Unique Chicago Hotels, a collection of unique boutiques and independent hotels that offer a new and exciting experience for Chicago's visitors. The UCH member hotels are known for personalized service, warm and welcoming atmospheres and of course elegance and charm. They have tailored their product to meet the unique physical and psychological needs of a narrow but loyal niche.

- Say the Right Thing in the Right Way. Niches have their own language. When going after a specific market segment, it is important that you understand its hot buttons and communicate your message in those terms. Dutch Boy hit this target with its revolutionary Twist & Pour paint container. For the do-it-yourself market niche, the company found that the only thing worse than watching paint dry was trying to pry open the can, keep from spilling it all over, then close the can back up knowing the paint will dry like concrete in the rim. So Dutch Boy talked to this segment in terms of "easy twist-off lid, comfort side handle and convenient neat-pour spout... [eliminating] the need for screwdrivers, paint keys or other tools..." Yeah, now you are talking my language!

- Say it in the Right Place. There is an advertising axiom that says, the narrower your market niche, the more targeted your advertising must be. Said another way, you have know where your target market gets its information so you know where to place your marketing message. If you are targeting the business community, then trade shows may be a good advertising vehicle. If your niche is affluent gay men, then you would want to advertise in Genre, a fashion, travel, and lifestyle magazine designed for this market. Or if your banquet service specializes in organic foods, placing brochures or posters in health food stores may be a way to go. What is the best way to find out how best to reach your target niche? Where do these potential guests get their information? Simple. Ask them - do your market research.

- Create a Memory. Every hotel is in the memory creation business. In marketing terms, this is called positioning. Your position defines what niche guests remember about the experience you have crafted for them. The question is whether the experience is compelling enough to get them to return. Perhaps, Howard Schultz, founder of Starbucks said it best. "Our primary goal is not to increase transactions; it's to increase the experience in our stores." Why else would coffee lovers spend $4.08 for a Mocha Frappuccino Grande Light?

- True For You. Finally, your niche hotel must reflect something that is essentially true about you and about your life; it must be something about which you care. Your guests will stay with you because of the quality of the experience you and your staff create and the value it represents. The foundation of developing a profitable niche market is built on the fact that the niche represent the true you. The lodging industry is blessed with countless hotels that are true to themselves. And they cover the spectrum from country inns to mega-resorts to boutique properties. What they, and other well-crafted niche businesses know is that when you niche your wagon to a star, you cannot be talking about making any niche. The point of all niche marketing is to make a good one -- one that takes you and your hotel where you want to go, one that helps deliver your life's goals and ambitions, and one that is profitable.

Your REVPAR will thank you.

Bonnie J. Knutson is a professor in The School of Hospitality Business in the Broad College of Business at Michigan State University. She is an authority on emerging lifestyle trends and innovative marketing. Her work has been featured in The Wall Street Journal, USA Today, and on PBS and CNN. She has had numerous articles in industry, business, and academic publications. Bonnie is a frequent speaker for executive education as well as business and industry meetings, workshops, and seminars. Dr. Knutson is also editor of the Journal of Hospitality & Leisure Marketing. Ms. Knutson can be contacted at 517-353-9211 or drbonnie@msu.edu Extended Bio...

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