Ms. Knutson

Sales & Marketing

Marketing3: Marketing to the 3rd Power

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

Okay. Take out a pencil and paper. Draw a horizontal line across the page. At the left end of the line, write the word advertising. At the right end of the line, write the phrase word-of mouth. Now ask yourself the following question: As a hotelier, if you have the choice between running an advertisement for your hotel in the newspaper, or having the newspaper run a story on your property as an article, which would you choose? Of course, you would go for the article. After all, it would be free, right? But there is a more important reason for choosing the article. It carries far more credibility than your ad.

This is the power of three for hotel marketing. It is called publicity or public relations (PR) and it falls along the continuum between advertising and word of mouth. We all know that the most powerful form of promotion is a recommendation from others we trust. This is how we may decide to visit a hotel for the first time, see a movie, or try a new supplier. But absent a personal good word from family or friends, we look for a third party to help us decide whether we stay at Hotel A or Hotel B, or whether we go here or go there.

I have heard it said that, compared to the power of publicity, advertising has almost zero credibility. While I may not totally agree with that viewpoint, it reminds me of a quote from advertising genius Regis McKenna: We are witnessing the obsolescence of advertising...as advertising has proliferated and become more obnoxiously insistent, consumers have gotten fed up. The more advertising seeks to intrude, the more people try to shut it out..." About a third of the typical newspaper is articles and editorials, while the other two-thirds is advertisements. Which do you spend most of your time reading? Or, as another marketing genius, Al Ries, says: To the average person the editorial stories are islands of objectivity in a sea of prejudice. Enough said.

Do you remember when the automotive slogan boasted, It's not your father's Oldsmobile? Well, in the same vein, we can also hype the fact that it's not your father's public relations either. In the past, there seemed to be two common themes associated with public relations. This first was crisis management. Remember the Tailhook scandal? At the 35th Annual Tailhook Symposium (September 5 to 7, 1991) at the Las Vegas Hilton Hotel, 83 women and 7 men were assaulted during the three-day aviators' convention, according to a report by the Inspector General of the Department of Defense (DOD). The hotel's PR had to go into overdrive to counter-balance all the negative press resulting from that event. In fact, at the time of the Tylenol incident more than 20 years ago, which still represents one of the classic PR cases, public relations was still viewed a tool dedicated to managing damaging news about an organization. The second theme was a press release announcement about your business to the newspapers, magazines and broadcast media. Think about Starwood's Heavenly Bed or McDonald's I'm Lovin' It. In both cases, the media was all over these stories before one dollar was spent in advertising.

But public relations is a far different ballgame today than it was in the time of your father's Oldsmobile. It is far more involved, sophisticated, complex, and comprehensive. At its core, PR is a communication tool between your hotel brand and the public - your guests, your prospective guests, your employees, and your stockholders. The dictionary defines it as "the art or science of establishing and promoting a favorable relationship with the public." (www.dictionary.com). This is just a long winded way of saying PR is all about putting your best foot forward to build and maintain your hotel's reputation and trust by maximizing the power of third party credibility. Some successful non-hotel examples:

In 1984, the Apple Macintosh ran its "1984" commercial one time during the Super bowl. People still remember that commercial, not so much for the commercial itself, but for the countless stories that appeared in the media afterwards. The publicity made the advertising - and in turn the product - memorable.

Ditto for the Segway scooter. Before it reached market, the company leaked information to the media to generate interest and suspense. By the time the scooter was officially launched, the media was in a frenzy. Dean Kamen, the scientist who invented the concept, made the rounds of the morning talk shows, the Segway was featured on CNN and all major nightly news programs, and it ended its first day on the Tonight show. There were Segway stories in virtually every newspaper and on every radio station. On the Internet, it was the forth most popular site for search engines. And all without a dime of advertising being spent.

There are countless other companies that have harnessed the power of the third party to their advantage. With virtually no advertising, Red Bull became a worldwide sensation. Initially banned in Germany because of some of its ingredients, this energy drink became the "must-try" for every German teen. Media coverage of the ban generated interest and demand. In its initial years, Starbucks spent very little on advertising. It was the first US European-style coffee house attracting the young and hip crowd. And the media ate it up. Then there was The Blair Witch Project, Mel Gibson's, The Passion of the Christ, and any book mentioned by Oprah as a must read for her book club. Even the Muppets got into the PR act when, in 1966, Rosie O'Donnel created a national obsession for Tickle Me Elmo when she promoted (unsolicited and uncompensated, I might add) the furry little character on her television talk show. All of these are examples of promotion that money cannot buy.

So what can make PR work for your hotel? The cardinal rule is: Get the media on your side! The media only wants to cover what is new, because new is interesting and exciting. That means that you must have a story to tell. The story can be about being different, such as the Memphis, Tennessee's Peabody Hotel ducks. It can be about doing something differently, like having 109 individually themed rooms, as does the Madonna Inn in San Luis Obispo, California. Rooms with names such as Caveman, Daisy Mae, and Oriental Fantasy are fodder for a media story. It can also be about being visible in the community via an iconic celebrity akin to Ronald McDonald or the KFC's Colonel. Or it can be about having your hotel used by a trusted personality or as a backdrop for a major community event. Remember, what Axel Foley (Eddie Murphy) did for Detroit's Munford High School when he wore its tee-shirt in the 1984 classic, Beverly Hills Cop. And we can still close our eyes and see Julia Roberts glide across the lobby of the Beverly Wilshire in the classic film, Pretty Woman.

The upshot is this. While PR cannot and will not replace your hotel's advertising, it does carry more credibility with your guests, your prospective guests, your employees, and your stockholders. PR produces the positive perceptions that advertising can and should exploit. Put another way, PR starts the fire of a brand; advertising fans the flame and keeps the fire burning. So pick up the PR match and strike a good relationship with the media. 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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