As late as the 1980s, half the vacuum cleaners sold in the UK were Hoovers. The Hoover company then saw their sales dwindle under recession and competition. In 1991, a travel agency approached Hoover about a sales promotion in which people who bought Hoover vacuums could get free airline flights. It seemed like a solid idea, so Hoover offered flights to Europe for people who spent £100 or more on their products.
On November 1, 1992, Hoover expanded its free ticket offer to include flights to America.
Under a new promotion, that same £100 Hoover purchase could net a UK-based customer two free round-trip flights to New York or Orlando — a package worth £600+ (£1200, or $1,460 USD, today).
When Hoover ran this plan by risk management professionals, the company was warned that it would be an absolute disaster.
“To me it made no logical sense,” recalled Mark Kimber, one of the consultants. “Having looked at the details of the promotion [and] attempting to calculate how it would actually work I declined to even offer risk management coverage,” recalled Mark Kimber.
Unfortunately, Hoover chose to ignore this advice.
The promotion was a success in one way, as people flocked to buy vacuum cleaners from Hoover, but it ended up angering so many customers that Hoover Europe's reputation was shattered. One customer went so far as a to hold a delivery van hostage for 13 days! The firm went deep into the red and was sold off to an Italian company only a couple of years later. Read how the promotion went completely off the rails at The Hustle. -via Digg
(Image credit: INTV1980)