When Business Crumbles, Who Ya Gonna Call? A Supplier! | Article

Mr. Wonderful the Outsourcing SupplierWhat does a business do when its sales crumble? Answer: Turn to your outsourcing suppliers who will do something creative to solve the problem.

The Venetian Resort-Hotel-Casino has become one of the hottest destinations on the Las Vegas Strip since it opened in 1999. The property is accustomed to an occupancy rate of 98.2 percent on rooms averaging $220 a night, according to Chris Stacey, The Venetian’s Internet marketing manager.

After the terrorist attacks on September 11, people were hesitant to travel. Occupancy rates at The Venetian hovered between 50 and 60 percent, even though the hotel cut its rates to $59 a room mid-week and $89 on weekends.

“I was determined to do something,” says Stacey. He turned to two outsourcing suppliers-one trusted, one new-to help him fill the hotel rooms.

Since the resort’s opening, Stacey has assembled a large opt-in mailing list. People interested in special Internet deals simply sign up at the resort’s Web site. For example, if The Venetian is hosting a slots tournament, Stacey will email the guests who have informed the casino they want to be notified about those kinds of events. He also sends email to past guests who haven’t checked in recently or to groups whose demographics are a perfect fit for his tony property.

Stacey was toying with the idea of including video in an email campaign before the attacks. Now, he felt this was a good time to test the new medium on his opt-in list.

A Picture Is Worth a Thousand Words

Stacey worked with H2F Media in Portland, Oregon to add a video component to the email offer The Venetian produced in house. H2F is an outsourcing provider that conducts email campaigns that include audio, video, animation, photographs and images.

H2F embedded a series of images to create a feel for The Venetian, a happenin’, high tech place where you can receive a cell phone call in the elevator. Singing gondoliers ply the canals. Mimes entertain the crowds in St. Marks Square. Unique eateries have open-air seating. And the casino is jumping. All were featured in the 30-second video.

The application service provider (ASP) “streams” the video to the recipient from its server. “It’s not a file attachment, so it doesn’t bog down” the downloading of the email, explains Neil Marshall, vice president, business development.

Since the video clips reside on H2F’s servers, the ASP can tell if someone opens the video and how long they watch it, useful information for marketing managers. “We know if your message is resonating or not,” Marshall says.

On the basis of doing business with The Venetian, H2F formed an alliance with another ASP, Internet Telephony Exchange Carrier (ITXC), a Princeton, New Jersey supplier that is one of the largest voice carriers on the Internet. ITXC developed a new technology called “Push to Talk” that The Venetian has been using for the last 12 months.

The Venetian has six “Push to Talk” buttons on its Web site and uses the Internet-to-phone communication in all its email campaigns. The button immediately connects any prospective guest to a live customer service agent in Las Vegas using either the guest’s computer or an available telephone. The goal is to keep people from disappearing into the ether because they got frustrated with the technology or were afraid of booking a room on the Net.

Since each company hosts its own application in different locations and the email comes from The Venetian’s mail server, the solution “comes together in the clouds. The only person who sees the technology as one offering is the end user,” continues Luis Machuca, executive vice present and general manager of the eCommerce division of ITXC, which was purchased by eStara of Reston, Virginia on October 11.

Hitting the Jackpot

The two ASPs kicked into high gear right after the terrorist attacks. Together, they had an email campaign ready to send shortly after midnight on Friday morning, September 21. Stacey says The Venetian typically has 20 agents answering the telephones. But the hotel had been so empty, he cut the number of agents in half. When Stacey arrived Friday morning, the 10 agents had corralled everyone they could get their hands on to answer the telephones. “We had 60 calls on hold all day long,” the executive reports. The hotel needed 50 people to answer calls that day.

Halfway through the campaign, ITXC realized the Venetian was swamped with calls, reports Machuca. So the ASP changed the phone number on the Push to Talk button, directing the deluge of calls to another center that was free to handle the traffic.

Machuca says the ASP alliance sent out 50,000 emails. About 12,000 recipients actually opened the email. Of those, 2,500 booked rooms. About 800 used Push to Talk to get more information.

When the sales department counted the chips, The Venetian sold over 8,000 room nights from that email blast.

“In a crisis, outsourcing allows you to move quickly and pool your resources,” says Stacey. He says The Venetian was considering moving all its Web work in-house. Now he’s convinced outsourcing is the best bet. “If there’s a problem and your outsourcing supplier has 30 Web designers, then you have 30 people to figure out how to fix the problem,” he explains.

Supplier Alliance Produces Results

Machuca says some of the email campaigns before the terrorist attacks were already producing great payouts. One campaign in August generated a profit five times the cost of the campaign. “Selling hotel rooms in the desert in August is not an easy job,” he says with a laugh.

But the addition of the streaming video increased the effectiveness of the campaign by four times, he reports. This success has cemented the alliance between the two suppliers. “We both follow the ASP model, which is based on quickness of deployment,” says Machuca.

Now, each company resells the other’s technology, which required some technical integration. “To our customers, we look like one company,” says the ITXC executive.

“Collectively we have the coolest Internet marketing tools,” maintains Marshall. “We have the most effective opening tool, the technology to move buyers to take action. They have the easiest to use closing tool. ITXC completes the package.” And that’s what successful alliances are all about.

Lessons from the Outsourcing Primer:

  • In a crisis, outsourcing suppliers have the staff and the expertise to figure out a solution to a new or unexpected problem.
  • Supplier alliances bring together disparate skills that create a powerful synergy.
  • Experimentation is always a good thing. Sometimes, it produces remarkable results, as it did for this buyer.


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