Last weekend I decided that I’d been working far too hard so on the spur of the moment I took my finace to Chester for the weekend. We don’t normally stay in hotels, and when we do we usually stay in the cheapest one we can find!
On this occasion though I felt like rewarding our hardwork so I booked a room in the most expensive hotel I could find. It had all the trimmings, and I was excited to discover that it even had Sky Sports so I could watch the football, DVDs on demand, and high speed broadband too.
Now, we were planning to go out for a nice meal and so I only planned to quickly watch the football on the Sunday afternoon and I probably wouldn’t have used the rest of the amenities, but I liked the fact that my expensive room had these extras.
Well, I THOUGHT my room had these nice little facilities.
When I checked into the room I was pretty shocked to find that I COULD watch the football, but that I had to rent out the sports channel per hour. And I could use high speed broadband but it cost £5.99 per hour (about $12!!).
In fact, the whole hotel room was set up in such a way to upsell me to various products and services, and you really did have to admire the marketing at work. For example, the internet was £5.99 per hour or £9.99 for 24 hours. I mean, who will pay for one hour when you can buy 24 hours for just a small extra amount?
And there was even a room special where for £19.99 I could have the lot for 24 hours, although why you would want to watch football, surf the net, and watch a DVDs at the same time I’m not quite sure!
My point is that the hotel in question had undoubtedly maximised the marketing process at every opportunity, and I’m quite sure that this would add to their bottom line.
Many would decide to order one film, and then be tempted by the price break to order two, and then be tempted to just pay £19.99 and order the lot.
But what’s not so easily measured is the hidden impact that this has on the performance of the business. Yes they’re extracting more dollars and pounds from every stage of their marketing process, but that also has the very serious hidden effect of frustrating and annoying me as a consumer, and I’m sure that over customers in the hotel would feel the same too.
Their stats and tracking will sure an increase in short term revenue, but I was left feeling irritated that I’d just paid £200 for a hotel room and now they wanted an additional £20 to use the facilities provided.
Sure, they may a squeeze a few extra pounds from my pockets of its customers, but at what long term cost?
If you listen to many of the so called experts they will drill into you that you should be ‘hitting’ your customers at every opportunity, and that if you don’t have a variety of upsells, downsells, and cross sells, then you’re leaving serious money on the table.
And while this may be true, how much money are you LOSING by forcing your customers to jump through these hoops. How many customers are you alienating by constantly trying to upsell them to the next level of service?
I’m sure the hotel that I stayed at makes a significant amount of money by squeezing its customers in this way, but I’m equally sure that they lost a few lifelong customers too, although the immediate test results won’t sure this of course.
One thing I am sure on though is that any hotel that disrupts my plans to watch the televised football game on a Sunday afternoon certainly won’t be getting my business again!
So what are your thoughts on this? Do you think that this is just great marketing, or do you think that the hidden cost of this kind of optimised marketing is actually larger than we’re led to believe?
I’d love to hear your thoughts in the comments below….
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Lee McIntyre went from overworked high school teacher to full time marketer in just 56 days from scratch. He is the founder of Get More Momentum where he shows others how to use honest marketing to build profitable Internet businesses in record time.
{ 8 comments… read them below or add one }
How much for the room itself? This would be a clue to the cost if any of extra’s. But I also agree that based on the usual room rates any tv should be inculded along with HS internet as it comes down the same wire as the tv signal(assuming that the tv is connected to cable or satellite)as I’m sure the hotel isn’t charged per room for cable beyond any first run movies or porn.
Lee… If I’d paid that much for a room, I would have expected EVERYTHING in that room to work for that price… full stop!
How much did they charge for the little soaps and shampoos? Better not tell them they were free (I hope they were) or that’ll be a new charge when you return.
Oh… I forgot
Along with lots of others… me included… you won’t be going back!
Cheers
Stephen
You should have said you were going, I have a friend who runs a hotel in Chester. I was there for a weekend last month, our room had freeview but none of the sports channels
I agree with you that the up selling is probably good for some short term profits, but I know I would certainly be very annoyed if the extra cost came as a surprise to me after I already paid for the room. I personally would never go there again and would advise any of my associates about what I would consider being Mugged for my additional funds. However, like you that is not the type of place that I would normally stay at and as a once in great while customer, I don’t know how much they would be losing by missing all my future buisness. If there was a way they could comp these services to their regular customers this might help to balance out the highjacked feeling and possibly maker their regulars feel even more special. Thanks Don Hambrick I just discovered your Blog and I intend to visit often. I’m a real Newbie and I like your down to earth style.
Thanks for the comments guys!
I guess the point is that good marketing does involves extracting more value from each transaction BUT that has to be weighed against the fact that doing so might alienate your existing userbase.
Great comments everyone and keep them coming!
Lee McIntyre
I know this is an old post, but my friends from verangomedia.com just introduced me to your blog, and I want to weigh in on this subject.
I don’t think it is necessarily bad to “have a variety of upsells, downsells, and cross sells” with your website. Where I think you were annoyed was with the unexpected costs. Had you known before you paid for the hotel room the extra costs you wouldn’t have been so bothered. However, your expectations were set high due to the amount you paid and all you got for your money was a bed and some water.
I think with a website it is imperative to spell out everything you are giving your customers, and also everything you are not giving. This may sound contrary to common sense, but by approaching your sales in this manner you will never over promise and under deliver.
Anyway, those are my thoughts on the subject. Looking forward to following your blog! ~Paul
Oh yeah, I agree completely with you… I would have been so pissed off spending so much on a room and then having them try to squeeze every last dime out of me as well.
I may have paid the 20 pounds, but I’d never be back. Which means they are trading 20 pounds for 200… maybe multiple times. Not good business strategy in the long run.
I do feel the same about Internet marketing too. Not long ago I signed up for something that was free – well cost me my email address actually. Then on the way into this membership site to get what I had been promised I was hit with an OTO. Annoying but not uncommon, so after waiting for an overly graphics laden page to load I scroll down to find the ‘No, thanks I want to leave this great offer…’ link and click it. Then I get hit with the OTO downsell. Same thing, wait for the page to load so I can scroll down and click the ‘No thanks…’ link. Then I get hit with another OTO downsell… ARGHH! Talk about annoying, I think I went through 4 or 5 of these without ever getting into the site I had signed up to. I closed that page and promptly unsubscribe from the 2 mailing lists I had signed up to by these marketers – I didn’t even give them a chance to contact me again and never gave the 2nd site a chance because I figured they’d also waste my time there as well. I remember these names and I’ll never get near anything these 2 guys do in the future – ever. They very effectively made me mistrust them before I ever got a chance to trust them – great business strategy! NOT!
I notice what often happens to me, I’m all ready to buy a product. Then on the way to the payment processor I get hit with an upsell. It sounds really tempting, but it’s a lot more than I was planning to spend. So I really have to stop and think about it. I usually buy late at night, I’ve got all my work done, I’ve seen the offers from my email and I’ve been working and considering each offer. I decide on one, and then I get hit with the OTO – so I have to stop and reconsider. There have been too many times in the beginning of the OTO craze that I bought the OTO only to find it wasn’t really worth it. So now I get stopped in my tracks when I was all set to buy… I have to reconsider… find I’m too tired and close my browser and shut my computer down to go to bed without buying. 9 times out of 10 by the next morning I’ve completely forgotten about this product and why it seemed so essential for me to buy it.
And Lee, I do appreciate that you give a lot of value in between your offers. And when I do buy your products they are full of value too, not the same package of books that I see being flogged off everywhere. I support your marketing style, simply because it works for me, and therefore I’m much more likely to stay on your newsletter and support your offers.
Yikes, sorry that last comment of mine was an epic
Guess it’s a topic I have some passionate views about eh?
I just wanted to say I agree with Paul W as well. Having worked as a web developer interfacing directly with the client I know that “managing customer expectations” was, in my opinion, the most important part of dealing with clients. It was something we discussed constantly, because everyone knew the consequences of not adequately managing customer expectations. You either lose money, or you lose the client and all their future business.