WE HAVE MET THE MARKET AND IT IS US. The L'Ermitage Hotel chain owned and operated six luxury all-suite hotels in the West Hollywood/Beverly Hills area. All had been opened in anticipation of capturing the influx of travelers coming to enjoy the 1984 Summer Olympics in Los Angeles. Subsequent to the Olympics, however, due to widespread area violence, threats of terrorism, and fear of earthquakes, the events didn't draw the tourists as travelers opted to stay away.

And it was not enough that circumstances--indeed Mother Nature herself--seemed to be conspiring against the hospitality business, but the six sibling hotels began competing with one another to stay afloat. Something had to be done, and done fast, to forestall further massive shortfalls to projected revenues. My company, SMART COMMUNICATIONS, INC. was brought in to bring order to chaos, and L'Ermitage would prove to be a significant test of the selective marketing principles that SMART promulgated.

It was quickly determined that the best way to stop the internal "feeding frenzy" off of one market segment was to refocus each the six hotels to a single, very specific, very selective, market segment. This would put an immediate stop to the duplication of effort that had plagued the hotel chain following the close of the Olympic games.

Here's how we reassigned the audiences for the hotels:

For the Mondrian, we targeted the rock music industry. Le Park got R&B, dance, latin, and rap artists. Le Re've and Le Dufy shared the fashion and interior design trades, because of their proximity to the Design Center. The namesake branch, L'Ermitage, was given Century City's "legal eagles" and off-shore finance travelers who preferred a Beverly Hills presence. BelAge was positioned as the perfect branch for commercial, mass-market advertising professionals and their Fortune 500 clients.

To explain how the SMART team worked this "multilayered" selective marketing strategy for each hotel , I will describe our wok, for the BelAge.

Of the selected markets just described, WE, You and I, the television commercial production folks, promised to be the most difficult to reach. They were, after all, in "the business" and presumably immune--or at least inoculated against--the seductions of the well-turned phrase and compelling imagery.

Furthermore, most of us, the target audience, were practitioners of mass-marketing programs. So it would be a tough proving ground for selective marketing techniques and principles.

As always, the first step was to identify, define, and describe in as much detail as possible who our target customers were, and then more specifically, to determine which of their needs were and were not being met by the hotels they frequented. With hundreds of commercials under my belt, my first inclination was to "focus-group" myself.

When a marketer is a member of a target audience, "self-examination" is not a bad, and can often be a good, place to begin. But this should never be considered "enough".

To proceed with the research into the target audience for BelAge, we derived, from the broader guest-list database, a list of commercial agency guests who currently stayed at the hotel. To generate a focus group, I sent complimentary breakfast invitations for 20 of those guest. Nine responded, and our research began. A significant factor that provides creative practitioners with the input they need to create unique selling propositions for their clients' products and services is context. In a hospital setting, the context is community well-being; in this case study, the context was professional well-being.

Those nine "comp" breakfasts taught me just how much I didn't know about others in my profession. Especially regarding their needs--and, more important, their unmet needs--when on business trips. It also didn't take long to discern that our client, the BelAge, was dropping the ball. And all because of what we came to refer to as "Le Shit." This is the phoniness often inherent in European-inspired restaurants, hotels, and night spots. "Le Shit" is oftimes is no more than the justification for rude, officious, and offensive behavior and/or indifferent levels of service by employees of such establishments.

Our research had revealed that the target market--advertising professionals--were turned off by the snotty attitude of the staff, and only patronized the hotel because of the space proffered by the multiroom suite accommodations, which functioned as offices-away-from-the-office. Furthermore, our target patrons were becoming increasingly disgruntled by slow phone response times and message unreliability. It didn't take a young female member of the Hilton family to realize that this was a market ripe for the picking by any competitor wise enough to address the unmet needs of the BelAge's guests.

Clearly, our first job was to convince the client that an attitude adjustment was in order on the part of its staff. From those early morning "breakfasts," I had relearned the importance of cultivating both sympathy and empathy for the needs of the selected customer.

Now I had to make the client see that this was the perspective from which to begin to determine the ways the current service was failing to meet those needs. This was easier said than done, because many department managers and staff members believed that the current attitude was essential to the ambiance of the hotel, and justified the premium-priced room rates and service fee structure.

"Holiday Inns are warm and fuzzy. We are the BelAge" was the response we initially received when voicing our concerns about the feelings of customers for the hotel. This was accomplished by creating service scenarios on video tape using agency staffers as hotel personel, then playing the focus group tapes we made at our breakfast research sessions that were reactions to the offenses shown. It worked.

Once we had hoteliers extraordinaire Severyn and Arnold Ashkenazy on our side, they graciously acceded to our recommendations to implement new systems and attitudes in the housekeeping and guest service staffs. These two brothers had arrived in America as children with their refugee parents after fleening the Nazi invasion of Poland. Wrapped in the linings of hundreds of carpets they brought with them were literally millions and millions of dollars worth of paintings. Those European masterpieces were the foundation of a real estate dynasty valued at more than $122 million at the time of their father's death.

Never be so sure you know the reasons your customers are your customers. Ask them. What you learn may surprise you. Le Shit was banished forever, and the importance of being an extension of the guests' business activities became all important. The BelAge staff was instructed that the hotel was repositioning itself as the hotel in the area for the commercial industry's agency and client organizations. They were told to consider themselves a part of that industry.

Henceforth, every message, call, or package directed to members of that profession was to be regarded as time-critical. They were also alerted to the fact that new hotels being built in the area would be competitors for the BelAge's guests. SMART identified every point within the organization that has contact with our target market. We designated those areas as potential points of sale, and made sure that staff are trained to respond accordingly.

Speaking frankly and honestly to service providers, and listening closely and openly to service recipients were the first steps in preparing BelAge for its more competitive environment. Our segment study of the commercial professional market had identified more than 100 service improvemens that BelAge could make to tailor itself to the ad executive in town to produce commercials.

To be sure, some of the improvements were purely illusionary.

We had the hotel offer to book the guests rental cars when they came in to LAX. We made sure the rental agency called the concierge as soon as the car was picked up with the guest's name and license plate. Guest pulls up. First curb man signals for him to hold before pulling up to the door. Second curb man phones bell captain with guest's name. Guest is wave forward and bell captain welcomes guest by name. Guest thinks he or she is famous enough to be "remembered." Name and discription are telegraphed via earphoned service staff to everybody who comes in contact with guest until they are in their suite.

This little trick did far more to say "premiere" then "Le Shit" could have ever done for this market. And it brought guests back again and again until ultimately most of them did become recognized on sight.

But illusion is one of the hallmarks of an excellent selective marketing campaign. Clive Davis once lamented that "everybody is having a lifestyle marketed to them." That is what happens when the wires show. To be truly successful, selective marketing must be engaging, never offensive; a guest, never an intruder. For us, "He whose bread I eat, that's the song I sing." If you target a specific business, then that's the business you're in.

Our goal for the BelAge was that it be elevated to "first-called" status among ad people traveling from Chicago, Minneapolis, Detroit, St. Louis, Dallas, Houston, Pittsburgh, Atlanta, Washington, Philadelphia, Boston, and New York City.

To accomplish this, we first focused on impressing the advertising professionals who were already patrons of the BelAge. Once we had identified who it was we were out to impress, the BelAge staff and management shifted into high gear. They knew that our selective marketing efforts would be only as effective as the knowledge their employees had of the target market. To ensure that staff always had updated information, check-in data indicated the industry of the guest; agency communities were assiduously tracked; room questionnaires were continually tabulated; and the hotel's services continued to be more finely tuned to the guests' needs.

The occupancy rate began to rise.

Complicating the campaign strategy, however, was that it had to be very cost-effective. The crushing weight of overdevelopment had taken its toll on the Ashkenazy empire of small all-suite luxury hotels. And protracted disputes with the city and neighbors were also debilitating the company. SMART worked with the L'Ermitage director of creative services Monica Erne to build a $2-million dollar-for-dollar "war chest" through media time paid for in hotel room nights. In otherwords the hotel gave rooms to media outlets in trade for time/space in publications or on television.

We also worked to generate a "buzz" in the ad communities in our target cities. And because it would have been foolish, in Los Angeles, to discount star power, the Ashkenazys wisely extended themselves to the movie industry. They offered hotel suites to movie studios to use for interview purposes; and to Hollywood's favorite charities, they made banquet facilities available. In this way, cachet was established, and visiting ad people were made to feel like Hollywood insiders. Why? Because we always made sure interview and star comp suites and events were on the top floors of the hotels to maximize the celebrities time in the elevators with the hotel's guests.

Once we were well on the path to service readiness, we began to craft the message. We knew that to use imprecise terms in our advertising would be to dampen the effectiveness of our selective marketing initiative. We had to launch BelAge into the production process and then establish its importance as a vital link in navigating that process successfully. With the hotel set to back up our advertising promotions, SMART created a highly targeted print campaign that positioned the BelAge as the place to "come home to" after long, tiring days in the commercial production trenches. Our full-page ads ran in the trades: Brand Week, Adweek, Backstage, Shoots, The Law Journal ( for entertainment attys) , and Variety.

We hit our target audience twice a month for a year, using 14 different scenarios to which all ad productions professionals could relate. The careful work we had done beforehand at the hotel level backed up our campaign promises.Our second objective was met, and occupancy rates began to climb.

Unfortunately, the L'Ermitage's financial problems could not be resolved and Interstate Hotels, the funding bank's management company took control of the chain. However, the value of selective marketing was not lost on the new owners, and they continued with our program. The BelAge went on to become an institution in the advertising community.

In today's complex markets, scale no longer ensure significant cost advantages. More often, it is selective marketing that provides those advantages. Far more easily than mass-marketing practices, selective marketing principles make it possible to achieve a true level of understanding between you and the customer you are trying to reach, just by virtue of the fact that it is a smaller audience. That in turn enables you to reach them more effectively.

A market segment is any group of people who could sit down with each other and have enough in common to carry on a reasonably meaningful conversation. Try having a meaningful conversation in a room full of people each of whom has different interests, values, and belief systems. That's what mass marketing requires, and why it so often fails.

When you can market, essentially, one on one, obviously, the results can be more meaningful to the customer. The BelAge case study teaches that selective marketing can be used even on an intracompany basis, that multidivisional or chain companies trying to "feed off" of one market segment may do so at their peril. By finding the segments within a given market, selective marketing can open the door to new markets and greater possibilities for reaching them.