Ms. Knutson

Sales & Marketing

The Going is Tough So Get Ready

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

As a hotel manager or a coach, you've said it at least a thousand times. If you've ever been a sales person or an athlete, you've probably heard it at least a million times. And if you've ever been a kid (which all of us have, however long ago), you've heard it from your parents more times than you ever care to count. I'm talking about that old clich'e, when the going gets tough, the tough get going. Endlessly quoted by motivators of every kind, it is meant to be slogan that inspires a higher level of performance. In other words, when situations are tough, people rise to the occasion.

This often cited clich'e is actually the title of a popular song originally recorded by Billy Ocean in 1985 and was the theme song for the Michael Douglas film, the Jewel of the Nile. As famous as these words are, however, there is another line in the lyrics that is less well known, but just as important for hoteliers in tough economic times: When the going gets tough, the tough get ready. The operative word is, of course, ready.

With the current state of the economy, it is not at all surprising that consumers and hotels alike have developed a frugal mindset. Or as one upscale frequent traveler aptly put it, my wallet is closed! So just what can your hotel do to be tough, be ready, and get going, which is on-trend with the new luxury consumer? In a hats-off to David Letterman, here is a "half top ten list" of five luxury lessons to help you turn your guests' penny-wise thinking to your advantage.

• Lesson #1 - Arm your front line troops. Keep in mind that luxury is no longer about the thing; it is about the special experience people feel in buying and enjoying the thing. When people become more careful in their spending, they need additional hand holding and guidance in deciding if, where, and when to travel. So this is the perfect time to invest in training for your sales force or guest service staff - especially in what I call empathy training. Most hotels do a good job of procedural training. Employees know how to make a bed, serve a meal, open a door, and make sure the guest's folio is accurate. But hand holding requires a different kind of coaching. Consider, for example, bringing in a behaviorist to school all your employees in how to read body language. Understanding simple moves such as folding arms, sitting back in a chair, or tilting one's head to the side can help your staff empathize with people. Such an understanding will help them more easily move guests and potential guests from pondering to booking that banquet room, buying a spa package, upgrading to the concierge floor, or even staying an extra night. What a luxurious gift of hospitality this gives your guests.

• Lesson #2 - Merchandise, Don't Sell. There is an old adage that the eye buys what the eye sees. No where can this be better put to use than in a hotel's gift shop. Whether a limited service property or a sea side resort, most gift shops look more like a discount drug store than an inviting and enticing buying experience. Hotels need to take a lesson from their retail brethren. For example, walk into a Nordstrom's and see look at how artfully a room setting or tablescape is displayed. Study how they present complete clothing ensembles in various lifestyle settings. Such merchandising is designed to influence your buying behavior so that you end up walking out of the store with not only the jacket you wanted, but the trousers, shoes, shirt, and scarf that go along with it. Plus, you have that luxurious feeling that you're all put together to boot. The new luxury is as much about the process as the product itself. You have to make the guest feel that experience.

• Lesson #3 - Remember that the classes are reaching down and the masses are trading up. This seismic shift in consumer spending can open your business to new market segments. Look, for instance, at those fancy coffee drinks that have become such a part of the American lexicon. Even though times are tough, people don't want to give up their cappuccinos, so they move from Starbuck's $4 price tag to Speedway or McDonald's. Or consider how designer brands, such as Simply Vera, have attracted new customer segments to Kohls, trading up from discount stores and down from traditional department stores. This attitudinal shift opens opportunities for new market niches. What about special packages to celebrate Grandparents Day? A case in point: Michigan State University's Alumni Association offers a Grandparents University experience where grandparents can bring their grandchildren to campus for a weekend during the summer. The two of them stay in a dorm together, eat in the dining halls together, and choose from a myriad of shared educational experiences ranging from computers to animals to learning how to make ice cream. Every year, it sells out within an hour of going online. Or what about the 35 million non-traditional families in which pets have become the new children? Eighty-three percent of these pet owners call themselves mommy and daddy when talking to their pets and two-thirds celebrate their pets' birthday. Talk about an untapped opportunity! Your competitors' pain can be your gain in these changing and challenging times.

• Lesson #4 - Don't cut back on promotion. Advertising and marketing budgets are usually the first line item a hotel slashes in a down economy. Yet, studies show that this is absolutely the wrong time to make such cutbacks. If you stop promoting, how can potential guests know your story? What you need to do during a weaker economy is become a lean, mean, fighting machine and market intelligently. The key is looking for new media to carry your message. Community newsletters can often reach your markets at lower rates. There are free or affordable online outlets beyond the usual third-party providers - craigslist, canpages.ca, bargain finder, and kijiji to name a few. There are e-newsletters, blogs, and e-blasts. And, of course, there is good of fashioned one-on-one communication. Every service organization - such as Zonta, Rotary, and Kiwanis - is always looking for speakers, and every hotel has something new happening. What an opening for you to carry that story to potential customers. As Jon Spolestra, author of Marketing Outrageously puts it, when someone wants to know what is happening in your business, your response has to be, "a lot, got an hour and a half?" We all need to remember that promotion is not a cost but an investment.

• Lesson #5 - Hit the values button. You can have the greatest hotel product in the world, but if you can't sell it, you still have the greatest hotel in the world. Here's where the values button comes in. When people are making trade offs, it is essential to understand which values are most important in their decisions. Security? Convenience? Price? Status? Yet, according to one study, the five top motivators to buy are quality of life, pleasure, education, beauty, and relaxation. Experience is an integral part of all these driving forces, and experience is the foundation of the new luxury. Even though people weigh their decisions more carefully today, they still make them with their hearts as well as their heads. As Charles Revson, founder of Revlon, so aptly put it, "In the factory, we make cosmetics, but in my stores, we sell hope." Make sure you are selling hope to your guests.

It's not news that the hotels and customers alike are closing their wallets. Battered by a year of economic downturn and facing an uncertain future, everyone is being more cautious in what, where and when they buy. In every business sector, from widgets to wigs, consumers are looking for reasons not to buy or to put off that purchase. Guided by these five lessons, your job now is to stay connected with guests in meaningful ways today so they can reward you with their business tomorrow. Pam Danziger, president of Unity Marketing says that in "...2009, marketers can get the jump on their competitors, especially those who have their head in the sand and are waiting for the recession to pass." She is right. With much of the hotel business in a funk, it is the perfect time for you to get ready and lay a strong competitive foundation for when this recession lifts. And it will.

"I got something to tell you, I got something to say.I'm gonna put this dream in motion, never let nothing stand in my wayWhen the going gets tough, the tough get going." - Billy Ocean

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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