trapped in a contractWe've recently heard many stories of hotels that feel stuck with their current emarketing provider.  Sometimes hoteliers are immobilized by ironclad contracts that give all website rights to the emarketing vendor. Other times a hotel is locked in a perpetual relationship with an emarketing provider due to proprietary technologies and accounts.  Of course, these types of lock-ins are never a problem when the customer is happy, but when things go south that's when the swords come out and the legal dogs are let loose.

Nobody likes to be locked in a partnership, particularly with a business that has let them down. Maybe the product you purchased didn't live up to the marketing hype. It could be that the customer service just stinks. Or perhaps the quality of the service provided is the pits.

Regardless the reason, you're disappointed. You paid the big bucks and you've got nothing to show for it but frustration.  In the best case scenario, you complain directly to the company via social media or navigate the dreaded automated phone maze in order to reach a live human being, only to get platitudes about "quality" and that company's commitment to "service." Most of the time though, you make a mental note of the offending brand and vow never to support their evil empire of shoddiness again! Unfortunately, in some instances you're met with a dead end: you've purchased a product or service that locks you into some sort of agreement that you are unable to break without some sort of severe psychological or financial cost.

How To Trap A Client

Here are just a few examples that we've seen of hotel clients who have been locked into unhealthy relationships with other vendors. The hotel names have been removed to protect the innocent.

  • Trapped by a Contract:
    Hotel 1 had signed a contract with a vendor that provides emarketing services but was interested in switching to a new emarketing vendor. The old vendor had built their independent website and provided some dubious ecommerce services. Understandably, the hotel was unimpressed with the performance and the company's overall attention to detail.  Since the hotel entered a contract with the vendor, the General Manager was simply waiting for that agreement to expire before moving on to Blue Magnet.  Unfortunately, upon further review of the vendor's contract, the hotel came to realize that the vendor actually owned the domain name and the design of the site!  This meant that even if the hotel let their contract with the vendor expire they still would not be able to take their website with them.  After all, according to the contract, it was property of the vendor! As a result, the hotel would basically forfeit their entire website and any search engine performance earned by the site thus far. Essentially the hotel would have to rebuild their site if they wanted to change vendors. They were trapped, just as the vendor had planned. They wanted out of their contract, but doing so would financially harm their hotel in the short term.
  • Trapped by a Proprietary Product:
    Hotel 2 had paid an emarketing vendor to create their website, but had since decided to go with a new emarketing vendor. Part of that transition from one emarketing vendor to the next involved the management of the hotel's independent website. Unbeknownst to the hotel, the site was developed on the vendor's proprietary content management system (CMS).  This was fine while the hotel was working with the vendor because they managed all the content through the proprietary CMS.  However, the hotel soon discovered that it would be unable to migrate the site away from the old vendor without breaking all the code that tied the site to that vendor's proprietary CMS.  As a result, the hotel had to invest additional funds into rebuilding the broken site in an open, non-proprietary format with the new emarketing vendor. The open format would allow the hotel to freely move the site to whichever vendor they chose without the headache caused by the old vendor's system. Although the proprietary CMS may have offered slick features and options unique to that platform, it needlessly bound the customer to that provider.
  • Trapped by Proprietary Information:
    Hotel 3 had an independent website that was being tracked with Google Analytics tracking software. This tracking provides a wealth of historical information about all kinds of user behavior on the website. The vendor set up the hotel's Google Analytic profile (as well as those of their other clients) on their own central vendor account. This meant that when it came time for the hotel to switch online marketing providers, the vendor told the hotel that they would be unable to give them ownership of the data because it was tied to their own corporate account.  The hotel could create their own Google Analytics account, but they would lose the historic data tracked across the previous years. As a result, the hotel was forced to abandon all their old historical data that helps to analyze and improve future site performance, all because their previous vendor held their data captive.

It's clear why these companies choose to do businesses this way. They assume that trapping customers with contracts, proprietary formats and locked data is a way to ensure continued revenue streams. Let's face it, new business acquisition is challenging and comes at a significant cost to any business (time and money). It's tempting to lock someone into your services. But forcing customers to stay with your company against their will is a shortsighted solution. Once that barrier is removed, that customer is going to bolt, spewing obscenities about your company in their wake. Putting up false obstacles is never good for customer satisfaction either. Blue Magnet was founded on the idea that customers would want to stay with our agency because we've become a valuable part of their team, not because they've been trapped by a proprietary product or slick contract that grants us rights to all their website content.

How To Protect Yourself

There are a lot of sketchy characters out there, and not all of them conspicuously don the Snidely Whiplash mustache with matching "bad-guy" cape. In fact, many vendors appear to be acting in your best interest, and for the most part they are. You just have to make sure you read the fine print on the agreement. The best defense against getting trapped with an unscrupulous emarketing vendor is the same in any industry: do your homework! In addition, these simple tips will help keep you free from the shackles of an unhealthy business relationship.

  1. Call vendor references - Investigate the company with which you are considering doing business. And don't just call the clients the vendor provides you. Snoop around the internet. Google's great for sleuthing! And because many vendors will place a link back to their own company website in the footer of their clients' websites, you have an easy way of tracking down potential references (even ones they may not want to explicitly advertise).  Another good tool for investigating this beyond the search engines is to run a search for the vendor's website in OpenSiteExplorer.org.  Here are the results from a search for BlueMagnetInteractive.com. You can see many of the sites we built for our clients.
  2. Use open source solutions - If you think you may switch emarketing vendors at some point, make sure your website isn't built on that vendor's proprietary framework. Some examples of content management systems that are open source are Joomla!, Drupal and Wordpress, among others.  Unless you really need a custom CMS, many of these open source solutions will be able to accomplish the same goals. More importantly, they can easily be transferred from one vendor to another without having to worry about breaking the system.
  3. Purchase your own domain - Make sure that when you purchase your domain name (examplehotel.com) that the WhoIs information (contact info for the domain) is in the hotel's name. There is no reason for the vendor to own this. In addition, the contract that the client enters into with the vendor should clearly state that the domain is property of the hotel, not the vendor.
  4. Request full access to the hosting - Many vendors will host a client's website on their own servers. This is fine, as long as the client is given access to manipulate content on the back end of the system.  Some vendors prevent outside access to their systems.
  5. Set up accounts in your name - Should you ever choose to leave your current vendor, you're going to want to take all your hard earned data with you. Otherwise, how will your new vendor know how to benchmark your performance? Let's take Google Analytics as an example. The vendor should set up a separate Google account in the hotel's name in order to track your website. Vendors that insist on setting up the account under their own vendor profile are only setting you up to lose all your historical web data when the day comes that you choose to leave that vendor. Ask that any new accounts for your hotel be set up independent of the vendor's other clients, for portability's sake. Also, make sure you request admin access to any accounts they set up for you.
  6. Own all creative rights - This should be a given for any kind of work-for-hire, but ensure that when your vendor builds your website that they transfer ownership rights of all design and development work, all copy on the site, all images to you. The vendor is building the website for you. You should not need to license the site from them. If you paid them to build it, you should own it. Make sure the contract says as much. There's nothing quite like spending thousands of dollars on a cool new website, only to find out that you're not the real owner--the vendor is.
  7. Review the contract carefully - This tip covers many of the items above, but it's important to list on its own. Many clients who think they're free to leave with everything they've already paid for are often shocked to find that the simple agreement they signed states otherwise. Have your legal team review the terms before you give the final sign off on any vendor contracts, particularly if you're unfamiliar with the technologies referenced in the document.
  8. Ask questions - There's a sucker born every minuteGrill your vendor with some hard hitting questions. This is your money! Make them work for it. It's harder to walk all over a client when they're knowledgeable about the emarketing industry. When I bring my car to a mechanic they look at me and see a sucker. That's when their eyes quickly flash dollar signs, a cash register chime is heard, and with a wry smile the mechanic assures me, "We'll take it from here, chump." A little knowledge goes a long way in showing the vendor that you'll call them out if they try any funny business. You don't have to be a jerk about it--just be knowledgeable and ask questions based on the list in this blog post.
  9. Understand what you're purchasing - Finally, just make sure that your vendor tells you, in plain English (not legalese), what your business has purchased from them. What do you own at the end of the day when you decide to walk away? How long are you in the contract? What does the vendor own? How easy is it to migrate the website, hosting, domain, services and accounts over to a new vendor? Even if you're on good terms with the vendor now, always make sure you have an out.

Most client/vendor problems can be avoided by simply understanding what you're buying into as the client. Admittedly, emarketing can be a confusing industry; there are a lot of technologies, intellectual property rights and participating parties involved in website development and marketing the site online. Keeping it all straight can be exhausting. Just be sure to use these tips as a guideline so you can understand what your hotel will walk away with after the relationship has ended. Contracts in themselves aren't inherently evil, and in many cases should serve to protect both parties; However, as identified above, when put into the wrong hands they can certainly be used for nefarious purposes. The more you understand before signing the contract, the less pain you'll experience when you and your vendor decide to part ways. Fortunately, most reputable emarketing vendors won't need to rely on underhanded contracts to secure their business model. Vendors that rely on the strength of their performance and the quality of their support will never need to rely on fine print agreements to lock in their clients. Quite the contrary--those clients will never want to leave!

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