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I'm a partner in the advanced analytics group at Bain & Company, the global management consulting firm. My primary focus is on marketing analytics (bio). I've been writing here (views my own) about marketing, technology, e-business, and analytics since 2003 (blog name explained).

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April 14, 2009

Smart Destinations: Creative Intermediation for Growth-Challenged Times

I had breakfast last week with Rob Schmults, an ecommerce veteran who after gigs at Fort Point Partners and GSI Commerce is now CMO at Boston-based Smart Destinations.  Rob's firm sells you and me a fixed-price, all-you-can-eat, multi-day "Go-Card" that provides discounted admissions to a variety of attractions in 15 cities across the US.  In an otherwise tough economy, Smart Destinations is growing at a healthy rate.  As such, it provides an interesting model for others trying to find ways to do the same.

For us customers, Smart Destinations offers convenience, savings, and less hesitation to do "one more thing" if we're taking the family to, say, Miami.  For the attractions in different cities that enroll in the program, discounting off the retail rate, and being listed in Smart Destinations' guide book, drive additional visits that they are betting they otherwise wouldn't have seen from you and me.  One cool feature of the service -- when an attraction signs up, it gets a Smart Destinations card reader, similar to a credit card terminal, that it sets up at its member/ information desk by the entry.  That way, visitors don't wait in the conventional admissions lines, the attraction gets another POS terminal, and Smart Destinations gets paper-free instant accounting for admissions fees (bought at wholesale) it owes the attraction.

Together, increased savings and convenience link customer groups and attractions that might not otherwise have hooked up, creating an economic pool that Smart Destinations can then try to maximize and harvest through creative packaging, pricing, and marketing.  And there's still plenty of room for innovation!  For example:
  • Today, Smart Destinations sells principally to folks in city X visiting City Y.  But imagine if it were to reconceive itself as a "platform" for "third-party affiliates", and allow local teachers and grad students to put together "profjonestourofcoolthingsforkidstodoinharvardsquare dot smartdestinations.com", tapping new market segments of suburban families desperate for high-quality activities in their own cities on grim winter Saturdays.
  • Today, attractions are enrolled ahead of time and are relatively "slow-in", "slow-out" of the program.  A logical extension might be to offer a "Site59.com"-style "dynamic-packaging" approach in addition to the base service.  Site59.com was an ingenious service created in 1999 that purchased blocks of unsold airline seats, unbooked hotel rooms, and unreserved restaurant tables and concert tickets on the cheap, and combined them into conveniently pre-planned packages for busy professionals desperate for a weekend away with significant others, but unable to plan more than a day or two ahead.  The resulting attractive arbitrage -- buy what someone's desperate to sell, and sell what someone's desperate to buy, was a big winner in the dark days of 2001-2002.  (My erstwhile colleagues at ArsDigita were proud to have worked with the Site59 team to build the service.)
  • Today, Smart Destinations markets through a variety of conventional channels -- search, affiliate programs.  But travel journalism suggests a number of potentially synergistic relationships.  Think for example, of a Smart Destinations partnership / sponsorship of iconic regular editorial features like the NYT's "36 hours" .  A few purists might sniff at the erosion of "Church-State" boundaries, but pragmatists no doubt would cheer! 
So, the question is, what other sectors have the potential to spawn businesses models like this?  

If you're a kid looking for work this summer, maybe start a Zipcar-ish lawn equipment exchange in your town?  Sign up folks with stuff as suppliers when they're not otherwise using their things.  Sell a "lawngear" card to others without stuff.   Use some of the proceeds to return sharpened, well-oiled gear to its owners, and pay for damages.  Pocket the difference. 

Or, if Smart Destinations doesn't provide enough inspiration, check out The Coupon Diva. (Listen especially to the point she makes at 4:15 into the video.)

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