When promotions go bad: what brands can learn from Leading Hotels of the World’s response to a PR nightmare

Leading_hotels in a post back in April Mediation commented on Hoxton Hotel's £1 room sale, observing that the success of the promotion created very much a double-edged sword; with fulfillment issues due to massive demand causing a negative CRM fallout.

Hoxton Hotel no doubt sympathises with The Leading Hotels of the World group, who this week were forced to completely abandon a promotion when massive demand for what was a very attractive offer – $500 rooms going for $19.28 (the price of a room the year of their founding 80 years ago) – became massively oversubscribed.

this is a genuine disaster for the brand, but the situation has been significantly mitigated by the group's response to the situation…

one, take ownership.

the above statement has been posted on their website and emailed to those who applied for the offer.  Ted Teng, President and CEO of the organisation commented that "Although our original back-up plan provided a viable solution for
the 150,000 people who were registered, it was met with some confusion
over submission procedures and timing … We are sincerely committed to restoring your faith in our brand and do not want to risk disappointing you again".

two, engage in the debate.

the brand quickly engaged themselves in online conversations about the promotion. in a forum on the flyertalk website.  Marshall Calder, SVP of Marketing at The Leading Hotels responded to posts by explaining the situation and what was being done to rectify it.  the response of contributors to the forum is telling…

SanDiego1k comments "I think this is a sound decision. It is very classy of you to make the hard decision, then return to advise us. Thank you"Irish Lad adds "I think that makes a lot of sense in the circumstances. I appreciate
this must have been a difficult day for the management at LHW … good luck with the rest of the
promotion and thanks for posting today."

three, communicate that you're working towards a solution.

Calder adds, "since we do not wish to disappoint anyone again, we shall re-tool the
$19.28 promotion and communicate the details to all registrants within
the next week."

if it was consumer communications on the internet that caused the problem, then it's corporate communications on the internet that will go a very long way towards fixing it.  there's a lesson for all brands in Leading Hotel's response to the situation… brands can't remain detached from consumer conversations, especially when those conversations are generating negative WOM about a brand.  in fact quite the opposite is true: the response of Leading Hotels may generate from a potentially disastrous situation more goodwill than their promotion could have ever hoped for.

thanks to Hanson for the heads up on what's going down in the hotel world…

One response to “When promotions go bad: what brands can learn from Leading Hotels of the World’s response to a PR nightmare

  1. Many brands could learn a great deal from how this potential reputational disaster was dealt with in a succint, direct and targeted way.
    Word of mouth is becoming increasingly prevalent in today’s tribal society – and more often than not, its online where such dialogue travels quickest and has the widest reach.
    By taking a proactive approach and going to the key influencers and affectors (i.e the online bloggers), LHW stemmed the furore before it got out of hand and emerged in the mainstream press.
    This is a perfectly actioned crisis management plan – something which ALL major brands should be prepared with.
    Know your key influencers, and dont disregard the potential (and power) of WOM.

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