I Created A $3M/Year Membership Business Selling Aggressive Hotel Discounts
Hello! Who are you and what business did you start?
Hello, my name is Shawn Pigg and I am the CEO of Hotels Etc. Launched in 1996, I purchased the company more than 15 years ago to bring true discounts to travelers and to help businesses increase revenue.
Over the past 15 years, I have negotiated over 3,000,000 discounts around the globe that are not available to the general public and only available to our members. Initially, our main focus was travel discounts, but because of the way we conduct business and the amazing growth we experienced we branched off into over 30 categories of discounts for our members.
Hotels Etc. is now a multimillion-dollar company and one of the oldest membership programs on the net today.
What's your backstory and how did you come up with the idea?
I first started on the internet back in the 90’s buying domains and reselling them. I owned more domains than anyone and created a great living. Unfortunately, I did not know the value of domains and sold some of the best domains on the market for pennies. This was before ICANN and cybersquatting was a law. I owned a domain and tried to sell it to a major network on TV and they sued me. I then moved on to help create some of the first eBooks with Amazon but because people did not buy eBooks at the time I was not making an income so I decided to venture into the corporate world.
I helped a home improvement company become a billion-dollar business within a few years, going from office to office training reps and increasing closing rates within the company. I was working 7 days a week and did not see my wife or children so I decided to leave my 7 figure job in 2005 to explore other opportunities.
I was watching TV one day and saw Hotels Etc. infomercial and thought to myself that is the future. I decided to join the company and invested my life savings into the opportunity. When I received my product I immediately started selling to friends and family only to find out the product did not work and was outdated. After receiving over $100,000 in chargebacks I reached out to the company and demanded them to sell the business to me.
When I asked them to sell me the company they said “no”. We talked for about 50 days before we came up with an agreement. Once they sold me the company the previous owner was going through a divorce so I had to go through the entire process and instead of issuing payments to the previous owner I had to pay the ex-wife for several years.
After buying the company and paying back the chargebacks it left my bank account empty. I had no money, no experience in the industry, and no contacts so I began working 18 hour days for several years to bring Hotels Etc. to life. The first month we opened for business we made over $60,000 and at that time I knew this is what consumers wanted and made a lifelong commitment to building Hotels Etc. into a multimillion-dollar business.
Take us through the process of designing, prototyping, and manufacturing your first product.
When I purchased the company the only thing I received was the domain name and trademark. I immediately began my journey by creating a website, conducting SEO, and networking with everyone I could network with. I negotiated with Hotels to give our members 50% off the rack rate and in return charged $29 for a membership. After signing up thousands of Hotels I began negotiating with the big players and aggregating inventory from multiple suppliers. The only issue is I did not have a system to deliver these savings to our members so I started to learn about APIs, Coding, Web development, and backlinking.
We started showing number one on Google for some very big keywords and took our company to the next level. We increased our price and started testing monthly, annual, and lifetime memberships. After the testing was completed we discovered that lifetime memberships outsold all of our other memberships so we converted our system over to a lifetime program and sold millions of memberships. Just when we thought everything was going great we got shut down by our merchant processor because they did not want us to sell lifetime memberships. Once again we are starting all over again.
In 2007 we created a physical membership with unique ID numbers and launched our business opportunity that allowed entrepreneurs and businesses to purchase our membership and resell them. We primarily focused on advertising in one of the largest business opportunity magazines and signed up over 14,000 distributors around the globe. After spending over a million dollars building the company we started to show profits until the economy crashed in 2008 and brought us to a stop.
During the 2008 recession, we started to dive into the future of our industry and discovered a new law that was going to be passed called the “rate parity law”. I immediately saw the light at the end of the tunnel and started working on new advanced technology to allow us an opportunity to white label our discounts to other companies and organizations. Within a matter of months, we had over 100 white label clients using our system under their brand. This helped us make up the money we lost from the consumer side and allowed us to continue to grow to what we are today.
Around the same time, we noticed Social media sites starting to take off so we began to understand google's algorithm. Our first social media site was Youtube and then Facebook so we started to learn more about the positive effects social media had for online companies. We started running contests, surveys, and autoresponders.
Describe the process of launching the business.
When we first made our initial launch we focused primarily on SEO, Backlinks, and Social Media marketing. We started running contests on social media to build our social media presence and capture leads. We had great results. The only problem was we were not seeing an ROI on our marketing efforts.
I then discovered a way to joint venture or barter with media companies and started receiving hundreds of thousands of dollars in media trade. After about 4 months of running on T.V and radio, we started to see an ROI and began expanding our marketing strategy to pay-per-click marketing. This was the first time we were able to run the business on business capital and not my credit cards.
Make sure you have a system in place otherwise you will end up spending all day every day answering emails.
While our main focus was to continue bringing in discounts I realized we were at the point to understand internet marketing and the best way to get the most bang for our money. This is when I learned all of the various avenues of online and offline marketing. I made a ton of mistakes, lost a ton of money learning the ins and outs of marketing. If I was to do it all over again I would have taken the profit from the company and hired a marketing company so I could continue to focus on building better technology and improving the user experience of Hotels Etc.
Since launch, what has worked to attract and retain customers?
We spend a lot of time on social media marketing and contests. Although we have had great results from SMM, we find that other forms of marketing can be more beneficial. Sending our press releases and landing on high authority sites like google news typically brings more traffic and sales than social media posts.
Linkedin is a great avenue to help us network with other businesses and create great relationships with other CEOs and executives in our space. Each social media site targets a different type of customer. Facebook for example Is good for sharing pics and getting social media juice. Youtube in our opinion is king not only because it is relatively simple to obtain high-ranking keywords but also allows us to get our videos ranked high on google.
Retention rates are extremely important to the growth of Hotels Etc. If a customer cancels their membership we need to gain as much insight into the reason to decrease our cancelation rates. We typically offer incentives that lead the customer back through sales funnels or we educate the end-user on how to use the system to get the most savings.
One of the most effective ways of marketing right now for us is GeoFence, or Geotargeting, joint venture marketing, and influence marketing. Right now media companies have over 20 billion unsold advertising space in the United States. If you have a product and or service that you can barter or joint venture with media companies to capture some of the unsold advertising space then you are way further ahead than most companies. For example, we would trade 100 annual memberships for $9995 in advertising dollars. You will trade retail for retail when it comes to bartering with media companies.
How are you doing today and what does the future look like?
Hotels Etc. are breaking all pre-pandemic records with bookings and purchases on activities and recreation. We constantly have to stay on top of what is new and what laws are being enforced globally on travelers. Hotels Etc. bookings have increased over 150% since Feb 2020 primarily because of the substantial discounts we provide to members.
Parity rate which is being strictly enforced on all major OTA’s (online travel agents) and Hoteliers allows Hotels Etc. to stand apart from all booking sites. The parity rates prevent OTA and hoteliers from offering a discount to the public thus allowing us to be one of the very few companies that can truly offer a discount.
One of the biggest challenges we find in today’s economy is we are marketing to 3 different generations that all have different buying habits. Millennials buy and shop differently than Generation X and Baby Boomers. Trying to find a universal marketing strategy that captures all 3 generations is a challenge that nobody has ever faced before.
Through starting the business, have you learned anything particularly helpful or advantageous?
The hardest part about starting a business is time allocation. When you receive thousands of phone calls, emails, texts, and messages every day it is easy to lose track of time. There are several opportunities over the last 17 years I missed because I was too busy handling other tasks so you begin to hire and train which now takes time away from other tasks. Time management is very important when you run your own business.
There are several situations where I was on edge deciding to work with an individual or company that turned out to be some of my best clients. The most important thing to remember is to go into every phone call, email, or meeting with an open mind. Be sure to explore all opportunities and even if the opportunity does not sound like a fit for you don’t shut them out. Sometimes changing one thing or adding something to the existing opportunity will make it a grand slam for you.
I typically spend the first few hours of every day answering emails, and then I move on to calling back any messages. After I handle any of the dreading tasks, I then move on to working with my design team creating new landing pages, sales pages, and funnels. Regardless of whether you answer emails when you first walk in the office or when you are getting ready to leave for the day one thing's for certain, make sure you have a system in place otherwise you will end up spending all day every day answering emails.
What platform/tools do you use for your business?
We have tested and experimented with so many online tools over the years. Some tools have shut down, some have been upgraded and new tools are released daily. For example, we have been using Aweber for our autoresponders since the day they launched. When you join a company when they first launch then in most cases you are grandfathered into that price rate or system. Another example is we have been using Vtiger since day one for our CRM, however, because they lack all the bells and whistles that are needed, we also signed up with ZOHO to get what Vtiger is lacking.
When I became CEO we primarily used 3rd parties for our software needs, however as we continue to grow we discovered it would be more practical for us to develop our technology and systems. There are cases in which you still need to rely on 3rd parties such as SMS messaging, social media sites or hubs, CRMs, Autoresponders, and servers.
Feb 2020 when covid was first announced we had to lay off a lot of our team members. This caused us to be timed crunched on every task and project that came our way. Last year we started to look into 3rd party freelance sites such as Upwork and Fiverr. We like Upwork because of the transparency and reliability of their system. We are also able to pick and retain great freelancers which help us get better quality of service.
What have been the most influential books, podcasts, or other resources?
I like to read about what the future holds. What is changing in technology and what is changing in my industry. I love the book Roaring 2000 by Harry S Dent because it explains what a product, company, or service goes through to reach max penetration.
I typically am a guest speaker on podcasts and enjoy listening to motivational podcasts. I think positive motivation is the key to success. We are bombarded with negativity every day and too much negativity will put you in the mind of “Stinking Thinking” which is the death of an entrepreneur.
Advice for other entrepreneurs who want to get started or are just starting out?
When you are starting on your venture it is common for most people to speak to their friends and family for advice. One thing is for sure, that is your toughest audience. I have personally owned the deepest travel discounts on the internet and it took my family 15 years to even use my discounts. Now that they started to use my discounts they will not go anywhere else.
I would always encourage you to join discussion groups, chambers of commerce, or speak to like-minded people. Another great way to get feedback on your product, service, or business is to get testers in exchange for feedback. When we launch a new product or service we always allow a certain number of giveaways for beta testers in exchange for good solid feedback.
Are you looking to hire for certain positions right now?
Hotels Etc. typically conducts all of our hirings during Feb and March to prepare for spring and summer travel. This gives us enough time to go through applications, conduct interviews, and train before we hit our peak season.
Don’t wait for job postings or recruitment ads to apply for a position. Most of the people we hire are individuals who send us their resumes because they have a talent or skill that will enable us to grow. If you find a company you want to work for contact their HR department and send them your resume so they can keep it on file. If your resume stands out and is attractive then they will call you.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
Download the report and join our email newsletter packed with business ideas and money-making opportunities, backed by real-life case studies.
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