Over the years, promotional marketing has taken on a negative perception, as if offering a discount or limited-time offer is automatically cheap or degrading. Clearly, too much promotional marketing, too many coupons, or always on-sale will train customers to never pay full price and devalue your brand. But if you are a brand in a competitive category, when done right, a promotional strategy can be an effective, surgical solution to boost your business and drive revenue.
One of my favorite examples of a brand with a killer promotional strategy is Vail Resorts and its Epic Pass. In case you are not a skier or snowboarder, Vail Resorts is the world’s biggest ski resort operator and the Epic Pass is the most popular ski pass with almost 1 million sold for the 2019/2020 season. But in 2008, Vail Resorts was just another group of ski resorts with a traditional pass pricing and promotion model. They took a calculated risk on a promotional strategy that profoundly changed how the industry operates and how their customers drive revenue.
This case study outlines three strong advantages to a promotional strategy for companies to consider:
- Driving Revenue – Once upon a time, ski passes used to cost several thousand dollars for just one mountain. It was a luxury for only the rich (or for a local who knew they would ski 100 days). Vail Resorts flipped the decades-old model on its head and launched their new season pass, The Epic Pass. The pass cost less than $600 and it was good at five ski resorts. Selling more, albeit cheaper, passes easily replaced lift ticket revenue. Passholders skied more, which also meant more on-mountain revenue as well.
- Increasing Market Share – The new pricing model caused a mass migration from other season pass programs. The Epic Pass cared about the skiers, wanting to democratize the sport, which automatically demonized the greedy competition. Today, their 14 resorts represent about a third of all skier visits (out of 475 ski resorts in the US).
- Changing Behavior – Traditionally, ski vacations were booked and passes were bought in the fall, close to the ski season. Vail Resorts offers their lowest price on a season ski pass when you purchase the Epic Pass in April – a full eight months before the next ski season was to begin. Why? Early commitments lockout the competition or any other changes in heart. Additionally, the pass revenue off-sets the slower summer months. As the fall approaches, the Epic Pass gets more and more expensive and the incentives get fewer and fewer.
Don’t be afraid to consider a promotional strategy. A well thought out business plan, combined with disruptive marketing, can give your brand just the boost it needs to break through the clutter and competition.