Marketing Lessons from the All-Inclusive Marketing Funnel

My SCUBA vacation was supposed to be filled with sunshine, diving, sharks and turtle swims. It included all that and more, along with an unexpected lesson in marketing and sales models. For the first time, I found myself trapped in an all-inclusive tropical resort. Unaccustomed to the “order three drinks at once” and “get there early to get the best food” tricks, I had no choice but to observe the lure-in-and-upsell machine employed by resort management. I watched partly in admiration and partly itching to help them market this gorgeous resort better.

The lure-in-and-upsell technique many companies, resorts, cruise ships, advertising agencies and even digital marketing agencies use typically looks like this: sell a “value” package, then upsell more and more along the way.

What starts as a $1,000 package ends up costing $3,000.

But you know all of that, right? So let’s talk about the business and marketing lessons we can learn here.

I believe in the triple win: business exchanges where three or more parties gain.

In this case, the winners should be the resort, the customer and the employees/location. However, is anyone actually winning with this “sprint gains and net triple-loss model”? Of course not. When you look closer, you’ll quickly discover the triple loss instead.

Because this sales process is designed to make as much money as fast as possible for the resort (or cruise line, company or agency), the model is inherently unsustainable.

The reason for this is because it’s missing:

1. A comfortable welcome and a parting gift
2. The sense of a delivering value
3. Ignorance of customers’ savvy in the digital age

Let’s discuss each of these factors individually:
1. Are you ever shocked when resorts welcome you with a glass of champagne and then more or less kick you out at the end with an early check out, a late ride and no parting gift?

Does this approach work for you? Does it get you to buy faster? Do you want to return?

In my experience, I generally walk into a hotel worn out from travel, ready to put my luggage down, change my clothes and get to relaxing. However, there’s nothing relaxing about waiting hours to check in with a bad drink in my hand; a long list of rules, activities and things to do; and having to help the bellboy find my luggage and take it to my room myself. Are you starting to see the beginnings of the triple loss?

Here’s a better model that applies to how we build relationships through social media marketing:

Make travelers comfortable upon arriving. Welcoming them and making them comfortable are two different things. No customer ever comes in to wait in the lobby. Period. There’s no excuse for it. These days a hotel has an incredible amount of information on a traveler: when they arrive, if they’ll be late, if they’ve been there before, why they’re there and so much more. This information should allow hotels to prioritize room check-ins based on arrival times, as well as other factors. Marketing and relationship-building start with knowing your people.

With so much data, there simply is no excuse to remain blind to your customers’ needs. And the idea that a drink can make the first impression for you only works when all the other impressions are just as good or better. I’ve seen this at resorts large and small with one exception—a little Minnesotan resort in Negril, Jamaica, Coco LaPalm. They always checked me straight in and then invited me to a complimentary drink and orientation after I settled in. Same effort on their part, different outcomes—the bell boy gets his tip, I may actually want a drink after I settle down, and now I am starting to trust that the resort staff is looking out for me.

Don’t overwhelm them with pitches, schedules and options. There’s a fine line between making people cared for and putting them into choice paralysis. Make sure a concierge is a helper not a timeshare salesman. In marketing, the next stage after targeting is research, observation, listening and learning. Pay attention to your customers’ needs and offer to help. Don’t force them down in a chair and pound them with brochures, offers and activities.

First impressions matter. To use a social media parallel, when we get a follower on Twitter that doesn’t mean they’ll listen to us. It just means they checked in, we still have to gain their trust and attention. Don’t run so fast and hard for the sale at the risk of turning away your customers’ attention before you even had a chance to make an impression.

And don’t forget the departure. Now it’s time to offer a free drink and a little parting gift. If there was any negativity, it may be erased. If there was excitement, a nice review will come out of it. And each one of those reviews is gold in your marketing toolbox. Ride that excitement also with an early “discounted” booking for next year. Orbitz does this greatly, with a welcome home email and a discount offer for a next hotel stay.

2. Value is a big concept and a simple one at the same time. What most all-inclusives do is offer a low cost up front and high costs at the resort, along with a lot of restrictions. In fact, the perceived value diminishes abruptly after a few days of eating the same food, drinking the same bad drinks, waiting in long lines and taking uncomfortable expensive group trips.

So how do we start with value-pricing and keep perceived value up throughout the experience?

Deliver on everything you stated you will, without any complications, disclosures or “buts.” If there are three free activities included, deliver three free activities not three activities with upgrades. Make it simple. Simple is low cost to you, easy for them and it nets out as perceived value. And strive to always overdeliver.

Out-help your competition. Outstanding customer service is a process and an attitude, not a cost. And it always wins. This will be a post on its own, but here are some quick simple tips by Lee Graham quoting 37signal‘s Jason Fried and David Heinemeier Hansson.

Upsell at a fair price, as a solution to a problem, want or need. I will guarantee you that as long as someone is on your resort, in your Twitter watch list, blog watch list, in your store, as long as the world will turn and you’re part of that turn, there will be questions and needs.

Those who don’t see the questions and needs don’t watch for them. So you’ll have plenty of opportunities to help and make additional revenue. Ask your bartender what questions he gets. He will know more than most others. He may be able to sell more than most others in your resort. Every business has that frontline employee who appears the least threatening and the least salesy, and I guarantee you that person is who your customers will turn to first.

3. Don’t underestimate your customers’ digital savvy. People will look you up online, will measure, compare you, weigh you and review you. On my trip, I connected with wonderful Eduardo from Cha Cha Cha Diving who told us his story of going from a four-boat dive operation to one-boat enterprise. Edmundo’s been diving for more than 30 years, with more than 20,000 dives and a calm fatherly demeanor. He shared that back in the day when people faxed and called him, he had many customers, but as soon as email and websites came about, he didn’t switch fast enough and people couldn’t find him anymore. Eduardo’s business will survive; his friendliness and dependability, his attention to each individual-diver, his storytelling and personality will continue to bring his loyal customers back. But his story shows that not adapting to new means of communication can make the difference between gaining revenue from one boat versus four boats, or one store versus four stores.

On my way out of town, I had some time to spare, since I was kicked out of the hotel by noon, so I stopped in town to see Edmundo. I stopped at his wife’s store and dropped a good chunk of money on jewelry, which they easily discounted for me. He took my luggage in and I went for another an hour of walking around Cozumel. When we parted, Edmundo gave me two little gifts and two gifts for two other friends in Chicago. When I landed in Chicago, I found an email in my inbox from him. I had made a new friend, and friends always go back to visit friends. And I now know Edmundo was only slowed down by technology changes.

When I did the math, I realized that I spent only tips at the resort, and 80% of my budget (diving and gifts) went to Edmundo. I say this with admiration. That’s how it’s done.