Ka-Ching! Vegas.com Hits DR Jackpot
October 1, 2005
By Nicole Urso
Howard Lefkowitz does not believe in luck. As the president and CEO of Vegas.com, the most popular full-service Las Vegas destination Web site, Lefkowitz snubs the charm of Lady Luck and puts his faith in numbers. He is a man of strategy and foresight, and extracts the oxymoronic notion from a "sure bet." So, it seemed highly uncharacteristic when he made his first bold and brazen executive decision at Vegas.com.
"Shortly after I got here," Lefkowitz recalls, "I had a conversation with the Greenspun owners, and I said that in order to make things work we have to stop selling advertising. And of course they were shocked and appalled."
Greenspun Media Group (GMG), based in Henderson, Nev. -- only minutes from the world famous Las Vegas strip -- is the parent company of Vegas.com, also based in Henderson. GMG owns multiple media properties in Las Vegas, including the Las Vegas Sun daily newspaper, In Business Las Vegas, Las Vegas Life magazine, Las Vegas Weekly, The Ralston Report, ShowBiz Japan, ShowBiz Weekly and VegasGolfer magazine, as well as Las Vegas ONE, an all-news cable channel.
The first iteration of Vegas.com was run almost congruous to an online newspaper or magazine with an ad-generated revenue business model. It was the natural progression for a company steeped in 50 years of print production, and it was not easy for Lefkowitz to convince them that he had a better way to turn a bigger profit. "In order to sustain ourselves on a long-term viable basis, we have to be in the direct response business," Lefkowitz explained. "The ad-supported model wasn't going to work. It had to be a transaction-based business."
Building an Excess of Success
Rather than providing a purely informational Web site, Lefkowitz wanted people to leave Vegas.com with airline tickets, hotel reservations and a complete itinerary of restaurants, reviews and clubs to visit. GMG nodded his vision and Vegas.com underwent a complete overhaul. The company re-tooled its entire technology infrastructure, created a series of unique marketing campaigns and products.
In 2003, just two years after Lefkowitz became president and the company wrangled the marketing power of direct response, Vegas.com became one of the top 50 travel sites in the world, according to alexa.com, a site that ranks the popularity of travel Web sites. Vegas.com is also the only site on the list catered exclusively to Las Vegas. And, according to a July 2005 article in Arthur Frommer, a renowned authority on the travel industry, Vegas.com is "a model for Web sites dealing with any destination."
Expedia.com, Orbitz.com and Travelocity.com rank as the top three travel sites respectively, but when it comes to booking Vegas trips, Vegas.com dominates the niche, claiming a 65-percent market share of unique online customers researching the city. The site garners 2.5 million visitors per month, and there are "thousands and thousands of transactions per day," according to Lefkowitz.
Vegas.com also bought out Lasvegas.com which introduced an additional 600,000 users to its Web sites. Although both sites showcase the city and even carry many of the same offers and information, they are marketed toward entirely separate audiences. "Vegas is a lifestyle. It's a state of mind, "says Lefkowitz. "Las Vegas is a city. And the sites actually have very little overlap as far as audience is concerned -- less than 10 percent. So, each site has to be portrayed differently, merchandised differently, set up differently because they're targeted differently."
Marketing the City
Lefkowitz attributes the staggering growth of Vegas.com to a culmination of many things, but especially to the introduction of direct response and the highly branded marketing campaigns spearheaded by Bryan Allison, senior director of marketing. In a city that never sleeps, Lefkowitz and Allison find direct communication and instant interaction to be a necessity when marketing a city that practically changes on an hourly basis.
"It's hard to do what we do," says Allison. The Web site is structured within a base model that works, but a key element of that model is fluctuation and change. "There are about 150 changes to our Web site every day because show times change, new restaurants open, other restaurants change their hours. There are so many things changing all the time in the city that it's hard to keep up with that."
One of the mantras at Vegas.com is to know the product before you sell it, an obvious practice among successful businesses. But at Vegas.com, knowing the product involves an intimate understanding of an entire city. Lefkowitz and Allison can immediately rattle off a list of the best sushi restaurants before a night of clubbing or the best hotel pools for a family with kids under 10 years old. They know how hot it's going to be at the end of October and how many minutes it takes to walk from the Paris hotel to Caesars Palace. What's more, they insist that all of their content aggregators and all 118 contact center employees know the city just as well.
What they've found is that, although the Web site became extremely popular, many customers want to speak with a live agent when booking their trip. The site has less than a 10-percent conversion rate. However, 45 percent of callers use the number from the Vegas.com Web site, and when people peruse the Web site prior to calling, they are more likely to be buyers instead of shoppers. The call center has a 35-percent conversion rate.
"It's hard to do exactly what we do because you have to be here," says Allison. "Two members of our content staff grew up in the city. They're natives. And, it's just hard to know all this stuff without being here and without being on top of it like we are."
The Vegas.com call center operates in-house. All contact center employees are required to take 30 hours of training and pass a series of tests before they can help customers. One of the tests involves sticking all the hotels, casinos and restaurants on a Velcro map of the strip in proper order, and all agents are required to take four hours of mandatory training every week after their initial training is complete.
Most of the invites Lefkowitz and Allison receive to attend shows and openings are also extended to the staff, and sometimes the nightlife comes to the office. Wayne Newton visited Vegas.com a couple months ago and interrupted a contact center employee to speak directly with a caller from Ohio. Members of the Cirque du Soleil's Ka were another welcomed distraction. The performers stormed in, disrupting calls and spinning employees around in their chairs.
The other mantra, posted above every doorway throughout the entire two floors of office space, is "Think of Yourself as a Customer." Vegas.com is above all else, a city service site. When people compare hotel reservations, research nightclubs or check airfare on Vegas.com and then book their arrangements on the individual business sites, Vegas.com receives nothing in return. "When people visit our site, they look at up to 30 pages on average," says Allison, "and that shows how many choices there are when you come to Vegas."
Allison says that helping consumers book their ideal Vegas trip benefits Vegas.com in the end, even if the company doesn't earn commission from a hotel reservation or an airline ticket, because happy customers keep coming back and their business partners want to maintain strong relationships with them. The company even publishes every categorical listing in a leather-bound book and sends it to each hotel's concierge desk for free.
Last month, Vegas.com also launched a weekly audio Podcast, "Vegas in 5," which can be accessed through the main site or in Apple's iTunes Podcast directory. Vegas in 5 allows listeners to hear the latest on everything from shows to restaurant openings.
Follow the Arrow
In order to attract consumers to the many products and services available on its site, Vegas.com introduced a national direct response campaign with core branding tactics. "We're not just direct response," says Allison. "If you look at our campaign, it also has brand elements, and I think that's a critical component for us to succeed on a go-forward basis. One of the things that direct response folks have learned is that the store's only open when the commercial is on. But there's a brand tag available based on that cumulative media region frequency, which is why you end up with companies using an 'As Seen On TV' label. So, it took that notion of As Seen On TV, turned it into a mark and put that mark out in retail."
The first nationally recognized branding/DR campaign that Vegas.com ran was themed "It's Who You Know," with the implied message that unless people come to Vegas with the right connections, they'll never get a good deal on a hotel or admitted into the hottest nightclubs. Vegas.com wanted to be recognized as the "in" for average consumers who really weren't familiar with the city. That campaign ushered in a series of accolades, including the 2004 Odyssey Award from the Travel Industry Association of America (TIAA) for Domestic Travel Marketing.
Its current campaign is "Do Vegas Right." Allison says that his intention is to demonstrate that Vegas.com will be proactive in helping customers plan their trips -- which is reinforced by the company's big, red flashing arrow logo. In one of the spots, a construction worker follows the arrow into a cement mixer and ends up onstage at a Vegas strip club with his hardhat and tool belt.
Another spot has the arrow leading a suburban dad into a kiddy pool and coming out of a hot tub filled with scantily clad women. The spots end with the slogan and Web site.
Massachusetts-based Advanced Results Marketing (ARM), one of the top media buyers of travel marketing, helped Vegas.com perfect the offer tag and made sure that the DR aspect was integrated and designed for success. "The amount of leads they've gotten from DRTV has been tremendous and they're going to be spending a boatload of money in the upcoming year on TV," says Victor Grillo, CEO of ARM. "They're moving a lot of money into TV advertising where before there had been none and that's performing very well."
It also helps that the company name, Vegas.com, is, in and of itself, a clear call to action. Beth Vendice, executive vice president at ARM, says, "Prior to this, they did a very brand image commercial, and we just took their spots and extended them about 15 seconds, from 45 to 60, and put in a very mild call-to-action with a certain package and a price point. It dramatically increased hits on the Web site."
In the world of DR, many onlookers have a tendency to witness successful products or successful campaigns and marvel at which ones caught a lucky break -- but not Lefkowitz. Yes, his company's name is essentially a call-to-action. Yes, adding direct response elements to his commercials increased Web traffic, but merging both branding and DR disciplines and coming out on top has nothing to do with a lucky break.
"I think all of it is hard," he says. "If everybody could do it, they would, but they're not, so why? The reason is, it's not easy. It's a very complex process. The methodology, the communication 85 there's no silver bullet in any of this."
Lefkowitz and Allison say that in true Vegas style the only way to move onward and upward is to do something bigger and better than ever before. They won't give any hints, but say in unison, "It's going to big! Big surprises to come."
Vegas En Español
Vegas.com was paid a major compliment at the Direct Marketing Association's (DMA) Directo Days West conference in August, a seminar designed to educate marketers on tapping into the Hispanic market. Michelle Moscona, the vice president of Captura Group, who leads its Hispanic Program Management team, presented ways in which direct marketers could succeed in online Hispanic marketing. She cited Vegas.com as a model example of how companies should be reaching those customers.
Vegas.com offers its entire site in Spanish, not just the buying and confirmation pages. The bookings are in Spanish, the E-mails are in Spanish and the calls generated from the Spanish Web site are answered in Spanish.
"The Hispanic population on the Internet is the fastest-growing segment," says Howard Lefkowitz, president and CEO of Vegas.com. He adds that Vegas.com is the No. 1 travel destination for Hispanics in the U.S. "When we decided to go into this market, we did not just want to market to the community, we wanted to serve the community, so that's why the entire Web site is in Spanish."
Vegas.com also guarantees that professional translators "transcreate" the site, meaning that the words are not just carelessly flip-flopped from English to Spanish. When professional translators transcreate a site, they make sure that all the translations make sense literally and culturally. Other Web sites translate their site automatically, which leaves a great margin of error for contextual and cultural misunderstandings. Sometimes, the Vegas.com translators will write some content uniquely for various markets.
"We did not feel that it was fair to market and try to get their money in their native language so-to-speak and then service them in some other language," says Lefkowitz.