The Hoover Free Flights Fiasco: How a 1992 Promo Sank a Brand

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Spend 100 pounds on a Hoover appliance and receive two round trip tickets to the United States worth about 600 pounds. In 1992 the British arm of an 84 year old brand made that offer in earnest. This episode explains why. Hoover had held half its market for almost 40 years, but recession, rivals such as Dyson, and flops like a talking vacuum cleaner had cut profits from 147 million dollars to 74 million between 1987 and 1992. Under pressure from its American parent Maytag and sitting on warehouses of unsold stock, management gambled on upselling and on customers giving up.

The plan depended on what marketers call breakage. With a small agency called JSI Travel, Hoover built an obstacle course of 14 day mail deadlines, forms, and vouchers, and kept the right to reject every date and airport a customer chose. It worked for European flights offered from August 1992. When American flights were added in November, shoppers treated the appliance as a 100 pound fee for a 600 pound trip, and the company was overwhelmed.

Hoover expected about 50,000 applications and received 300,000. Some buyers left their new vacuums in the store or the parking lot and kept only the receipt.
Factories went onto overtime to build the cheapest qualifying appliances, so each unit sold deepened the loss.
The Hoover Holidays Pressure Group bought Maytag stock so its leaders could confront CEO Len Hadley at the annual meeting in Newton, Iowa.
Three senior executives lost their jobs, and Maytag sold the European division to the Italian appliance maker Candy in 1995. Court cases ran into 1998.
After a 2004 BBC documentary watched by nearly two million viewers, the royal family withdrew Hoover's royal warrant.

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