That has made its executives a lot more hard-nosed. The only marketing Club Med does these days is the kind that has quantifiable results. "In tough economic times, you better actively seek the best value for the dollar," says John T.A. Vanderslice, president for North American operations of the Paris-based company.
But infomercials? True, the often-sneered-at TV sell-a-thons have helped move astonishing numbers of Ginsu knives and ab crunchers. Bigger brands, though, have generally shunned them because of their schlocky image. But Vanderslice's new marketing team has little choice. Last year, Club Med lost $61 million on revenues of $1.7 billion as it shuttered some underperforming vacation villages and renovated others.
CLASSIER CUTS. Wielding a budget of only $15 million, Vanderslice is charged with building sales in North America, second only to France among Club Med's top markets. These days, pure image-building ads for the resort operator seem like a waste of money, says Vanderslice. After all, Club Med has long been a household name, and searches of media clips and references in late-night comics' monologues proved to company execs that the name is still well-known.
To make its infomercials a little classier than the genre's usual half-hour productions, Club Med keeps them short -- just 60 seconds -- and the hard sell at least a little muted. After some test runs in October, the first spots (which Vanderslice prefers to call "direct-response TV ads" to distinguish them from longer infomercials) aired in November and were spliced together from old commercials.
They weren't fancy, but they did generate a spike in bookings, so Club Med decided to stick with the approach. It shot new ads, which started running in May, that mostly feature true-life vacationers showing off the resorts. Unlike the actors in most infomercials who merely serve as grinning props for the merchandise, or users who provide canned testimonials, these people are shown in natural, slice-of-life closeups directly engaging viewers.
DARWINIAN STRUGGLE. The ads look like traditional brand-builders -- until a pitch at the end urges viewers to pick up the phone and call a toll-free number for a vacation deal. "The idea was to both build the brand and sell the offer, seamlessly," says Joel Sobelson, chief creative officer of Wunderman, the New York agency that devised the ads.
With infomercials, though, getting the creative part right is only half the job. Just as important is the number-crunching. By monitoring the response to different offers at different times of day, Club Med has honed its approach. It used two dozen cable networks for its first infomercial efforts. Those that didn't yield rich bookings at a low cost were quickly culled. CNN, for example, generated big sales but was dumped anyway because of its high cost. MTV, ESPN, the Travel Channel, and Fine Living have proved to be keepers.
The approach calls for constant fine-tuning. For instance, while most infomercials tend to make phones ring 15 minutes later, the lines remain dead when Club Med airs ads on mid-afternoon soap operas. Does that make those shows a bad buy? Hardly. It turns out that those mostly female viewers consult with their husbands over dinner before phoning in the evening to request a brochure or book a vacation. In fact, those ads have proved to be highly efficient.
"NUTS AND BOLTS." By keeping a close eye on the numbers, Club Med has cut the cost of TV-generated bookings from $150 to $99 from last fall to now, says Club Med marketing head Mark Wiser. He thinks the company can bring the cost down to as little as $50.
Club Med's other marketing weapons are undergoing the same scrutiny. In online media, it's insisting on pay-for-performance deals. No brochure request or booking, no payment. As for that staple of the travel business, direct mail, the resort operator has cut back on glossy catalogs in favor of mini-brochures and even postcards, all while testing the effect of 64 different messages on groups with varying loyalty to Club Med. Past patrons now are being reeled in for new bookings via direct mail for as little as $6 apiece.
Early signs suggest the new approach is working. Bookings edged up this past winter, a difficult period for the industry, and Club Med execs claim their infomercials have the phones ringing off the hook for summer and fall bookings. "Club Med is the last place you would think you could run nuts-and-bolts marketing," says Wiser. "But behind this quirky French company is a little boiler room where everything is numbers, numbers, numbers."
If the marketing team can keep those numbers growing, they just may bring some sunshine back to Club Med. By Gerry Khermouch in New York