27 years ago, Hoover offered two free international flights with any £100 purchase.
Today, it’s remembered as the worst sales promotion in history.
In late 1992, the UK branch of the vacuum manufacturer, Hoover, offered an impossibly sweet promotion: If a customer bought any product worth £100, he’d get two free round-trip flights to the United States.
For the 84-year-old electronics brand, it was meant to be an eye-catching way to boost dwindling sales, escape the gloom of a recession, and shrug off increased competition.....MUCH MORE
Instead, it led to the destruction of the company — a precipitous downfall that saw multimillion-dollar losses and customer revolts.
The most trusted brand in England
In 1908, a department store janitor named James Murray Spangler was suffering from a mean case of dust allergies.
So, he did what any entrepreneurial asthmatic would do: he mounted a motorized fan motor on a carpet sweeper and filed a patent for the world’s first household vacuum cleaner.
Spangler soon sold the patent to his cousin’s husband, William Hoover, who launched The Hoover Company and began selling the devices all over the US and Europe.
For decades, the Hoover brand enjoyed a near-monopoly on vacuum cleaner sales. The machines were so ubiquitous in England that ‘hoover’ became a generic noun (like Kleenex or Band-Aid), used as a synonym for ‘vacuum.’ Its provenance earned it a reputation as one of the world’s most trusted brands.
By the late ‘80s, the company, under the new ownership of Maytag, had expanded beyond vacuums and dominated the British cleaning market. But trouble was brewing.
The UK was entering the throes of a recession, and Hoover, a US-based company with a large presence in the UK, faced stiff competition from sexy newcomers like Dyson. In an effort to compete, they rolled out ill-fated products like a “talking vacuum” that warned users when to change the dustbin.
Between 1987 and 1992, Hoover’s profits fell from $147m to $74m. In short order, excess inventory began to pile up in its warehouses — and its 50% market share in England began to dwindle.
The old vacuum company needed to do something dramatic, daring, and attention-grabbing. And just the opportunity came along....
