Étiquette : loyalty

Catégories
Ailleurs dans le monde @en Marketing @en

How to create a personalized guest experience

Personnaliser_vin_chocolat_jazz

They may be working with standardized products, but major hotel chains are making an effort to personalize the guest experience. To do so, they are leveraging big data generated by traffic on their Websites and social media accounts, as well as their direct communications with customers. Furthermore, this approach is absolutely available to independent hotels as well. Here is an overview of some best practices for hotels, proposed by marketing firm Cendyn.

 

Pre-arrival: Lay the groundwork

It requires little effort to send personalized reservation confirmation emails. These messages must be short, address customers by name, indicate the booking dates, and include a few words affirming that the customers are expected. This sets the stage for a personalized experience and raises the guests’ level of enthusiasm.

Hoteliers can follow this with another email a few weeks before the scheduled arrival date, to help customers plan their stay. This message could include:

  • links to activities or services (restaurants or a spa, for example) either on-site or in the area, as well as the option to reserve;
  • an opportunity to upgrade the room;
  • detailed special information like an extra bed or any allergies;
  • a short survey to determine the traveller profile, interests and purpose of visit.

For example, here is part of the pre-arrival survey used by the Four Seasons Resort in Scottsdale, Arizona.

Personnaliser_questionnaire_Profil_client_FourSeason

Source: Four Seasons

Several days before arrival, hoteliers can send a third email highlighting:

  • reservation details (room, restaurant, spa, etc.);
  • an overview of any events occurring on-site during the stay;
  • the weather forecast.

Take advantage of these opportunities to showcase your products and thus increase revenues. Remember, most email is read on mobile devices, so make sure your content is easy to read on a small screen.

A virtual concierge

In lieu of administering a pre-arrival survey, the Virgin Hotels chain lets customers share their preferences on the Lucy app. With this virtual concierge, users can indicate their ideal overnight room temperature, the number of extra pillows required and whether they are a foodie, for example. The hotel can thus adjust the thermostat at night and notify the customer if there is a gourmet event like a public market in the area.

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During the stay: Take action!

Once you have gathered information about customer preferences, the tone is set and expectations are high. It is now time to follow through at the operational level. Staff on duty must be informed about customers, before they arrive.

A daily meeting

Every morning, front desk staff can meet to review the files of all the customers arriving that day, or at least the VIPs, in the case of larger establishments. These files should provide the following information:

  • customer name and any special information noted from the pre-arrival survey and prior email exchanges;
  • number and frequency of past visits;
  • products and services consumed during previous stays.

This will ensure that employees are properly prepared to offer a personalized welcome to each and every customer.

Digital communications

After customers have checked in (at the front desk or virtually), the hotel can send a welcome email or text message, depending on their preferred method of communication. This should be short and sweet, reiterating that the staff are at their disposal. During the stay, the hotel can send other targeted messages—but not too many!—that can encourage spending. For example, a microbrew fan could be offered a complimentary drink. The guest will feel special and may order a meal or another drink.

Post-stay: Capitalize on the experience

Hotels must now send post-stay emails to thank customers for their business and invite them to post a comment on an online review site and answer a short customer satisfaction survey. In addition to doing this necessary follow-up, hoteliers must add any information about the establishment reported by customers to their file; this includes posts shared on social media. These data can be used to personalize a future stay, as well as strengthen customer-hotel relationships.

For example, having noted that a yoga enthusiast had published a photo of herself on Instagram during her stay at a Kimpton Hotel Group property, the company sent her a new yoga mat at home.

To cultivate the relationship, hoteliers can send customers birthday wishes, invitations to join their loyalty program or information about upcoming events that correspond to their profile. Don’t over-use promotional messages, but do send exclusive discounts and unique products before they are widely advertised.

Personalize to enhance one’s reputation

Personalized services lead to customer satisfaction and foster loyalty. Satisfied customers will tell their friends and families, as well as spread the word on social media and online review sites. It is in the best interest of hoteliers to develop strategies for gathering and effectively using data about their customers to develop a mutually beneficial relationship.

Image on first page: Pixabay

 

Catégories
Management

CRM in cultural institutions

What is the purpose of CRM?

CRM as a strategic approach for better understanding customer preferences

In a previous article, we defined CRM as a strategic approach for better understanding customer preferences, habits, desires, motivations, practices and needs, even though these elements can shift rapidly in response to changes in environment, lifestyle or spending habits. The purpose of this knowledge is to improve the customer experience, personalize relationships with visitors and build loyalty.

As its name implies, CRM involves three components:

  1. The customer. Good customers generate higher profits from fewer resources. Information technology can be used to distinguish good customers from poor ones and better manage the former to keep their business.
  2. The relationship. This involves short- or long-term ongoing two-way communication and interaction.
  3. Management. With effective management, a company’s culture and business processes can constantly evolve and adapt to its customers’ needs.

CRM benefits and limitations

CRM must provide a competitive edge. For example, a business that better understands its customers can be more effective and reduce its advertising costs by targeting a very specific clientele that is receptive to the message. However, it is imperative to protect the confidentiality of customer data. Clients consider CRM information very personal, even private. To limit the intrusiveness of this approach, it is key to keep certain basic rules in mind:

  • Inform customers of the fact that personal information is being gathered to be used for specific purposes.
  • Give them a chance to opt out of this type of monitoring. 
  • Allow them to access and modify the information about them. 
  • Protect their data against all unauthorized uses.

Some tools and techniques

  • Online, mobile and digital.  Such tools enable companies to maintain an interactive relationship with visitors (information requests, special offers, loyalty programs, etc.) through multiple communication channels (mailings, SMS, emails, etc.). They facilitate online queries, which can lead to the creation of things like adapted programming.
  • Relationship marketing. The goal of relationship marketing is to develop preferred customer relationships by making personalized offers. 
  • Database creation and exploitation. Data related to Web traffic (number of visits, pages visited, length of visit, etc.), the use of interactive screens or electronic tablets, information requests (on-site, by phone, via Web form, by email) and user profiles (socio-demographic data, cultural practices, likings expressed, purchase history, preferences, etc.) must be accessed quickly and easily to provide a personalized response to the needs of every customer.
  • Data mining. This technique uses automated or semi-automated methods to quickly extract specific useful information about a target group from large quantities of data. In other words, it makes the data « speak. »
  • Yield management. Derived from computer reservation systems, yield management is used to adjust prices in real time so as to optimize revenues. In the case of cultural institutions, it means better managing the flow of visitor traffic by, for example, encouraging certain people to take advantage of a better price during specific operating hours.

The example of the Dallas Museum of Arts 

The Dallas Museum of Arts (DMA) loyalty program, DMA Friends, uses a digital tracking system to better understand its visitors’ needs and interests. The program encourages visitors to sign up as a DMA friend at an iPad kiosk located in the lobby. When they sign up, new friends receive cards that enable them to track their interaction with the museum, both inside its walls and online. After each visit or cultural or educational activity, friends earn points that can be redeemed for free admissions, shopping discounts, behind-the-scenes tours or invitations to special events. This project was designed to encourage long-term visitor engagement with and active participation in the life of the museum.

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Source: Club Innovation & Culture France

The DMA received a $450,000 grant from the Institute of Museum and Library Services (IMLS) to fund program research and expansion throughout the United States. The first institution to take advantage of this will be the Grace, the 10th largest museum in Texas. The Los Angeles County Museum of Art and the Minneapolis Institute of Arts are next in line to adopt the platform, thus expanding the collection of data on American museum visitors.

CRM must constantly focus on fully using data to better communicate and promote products and thus effectively meet customer needs and build loyalty.

 

Analysis written within a partnership with Tourisme Montréal on cultural tourism.

Catégories
Customer segments Products and activities

Generation Y, the new face of business travel

Why take an interest in the business travel of Generation Y?

First of all, because of the potential: Millennials currently make up about one-third of all passengers on business flights in the United States and their share should rise to 50% by the year 2020, while that of Baby Boomers will drop to 11%.

Secondly, they spend more on travel than members of other generations, according to a survey by Boston Consulting Group. When travelling for business, they indulge in extras: they frequently make last-minute reservations, opt for refundable tickets, change their seat for one with more legroom, make changes to their itinerary, and splurge on high-end meals or onboard Wi-Fi, all of which leads to higher-than-average business travel expenditures.

Booking and planning travel

Spontaneity and connectivity are the hallmarks of Gen Y business travellers, so mobile devices are crucial: nearly one third (32%) of Millennials use smartphones to book travel while 20% use tablets, compared to just 12% of business travellers over 45. They are also much more likely than their elders to use mobile devices to enhance their travel experience: nearly three-quarters of them have travel apps on their smartphones.

for Gen Y, meetings have seven possible purposes: celebrate, decide, educate, ideate, network, produce and promote

To satisfy this demanding clientele, the Marriott chain has introduced an innovative concept that reinvents how meetings are planned. Meetings Imagined is a very visual, social site that offers expert advice, information on the latest trends in the world of event planning and hundreds of inspiring photos to stimulate creativity. Users of the site can work with the hotels to design customized experiences or browse the ideas proposed by participating hotels. They can also post their favourite images on social media sites like Facebook and Pinterest. The concept was the result of research showing that, for Gen Y, meetings have seven possible purposes: celebrate, decide, educate, ideate, network, produce and promote. So instead of concentrating solely on dates, rates and floor plans, the Meetings Imagined approach focusses on the specific purpose of the meeting to create and design a more personal experience.

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The importance of social networks

The majority (80%) of young business travellers attach considerable importance to online reviews when planning travel. They are also much more likely to post a negative online review of a hotel, restaurant or mode of transport (airline, public transit, taxi or rental car): 26% of those 34 and under said they had done so in the last year, compared to 14% of their older peers. Hotels were the most popular subjects of negative reviews from US business travellers, just ahead of restaurants.

The popularity of « bleisure » travel

The line between business and leisure is become increasingly blurred, particularly among young people. According to a survey conducted by the Hilton Garden Inn chain, 84% of Gen Y business travellers are willing to extend a business trip to take in a few days of leisure, a much higher number than their older peers. Furthermore, 65% said that exploring a new city was the best part of a business trip.

Are Gen Y travellers loyal?

although inclined to join loyalty programs, they do not actually show a lot of brand loyalty

Young business travellers are more likely to join loyalty programs: half of them take such programs into account when booking flights (48%) and hotels (51%), compared to a third of travellers ages 46-65 (31% and 30%, respectively). That being said, although inclined to join loyalty programs, they do not actually show a lot of brand loyalty. In fact, they are less brand loyal than their elders and more apt to switch from one airline or hotel chain to another if they believe the loyalty program is better for them. In fact, Gen Y business travellers do not seek the same program benefits as their colleagues. For example, they are more likely to use airline miles and points on free or discounted travel rather than on upgrades.

Youth hostels, an interesting alternative to traditional hotels

Youth hostels are becoming more popular among hip young business travellers – especially those on a tight budget – who don’t want to spend an entire evening alone in their room. Generator Hostels is one such chain: on certain days of the week, particularly during the off-season, nearly 20% of its guests are young business travellers.  Another example is the Fusion in Prague, which is both a hotel and youth hostel. It offers individual standard rooms and dormitory-style accommodations, as well as non-traditional meeting spaces like its 360° Lounge Bar and Playroom, which features over-sized seating attached to the wall that can also be folded up and out of the way. In addition, its social media presence enables business travellers to meet other guests with similar interests, even before their arrival.

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Young business travellers are still in the process of trying out different brands to determine what appeals to them most and best corresponds to their life style and travel habits. It is the ideal time for hotels, restaurants and other tourism stakeholders to listen to them and try to meet their expectations for they are the travellers of today… and tomorrow!

Catégories
Distribution networks Trends

The resurgence of traditional travel agencies

The sector of so-called traditional travel agencies has probably undergone more upheaval than any other over the past decade. And yet, despite the popularity of the internet, the events of September 11, 2001, and the advent of zero commissions, agencies have learned to adapt, reinventing themselves in the process. Though many consumers have become devotees of online reservations, many remain faithful to the travel agencies that have continued to offer true added value. Some observed trends are presented in the following report prepared by Claude Péloquin of the Tourism Intelligence Network of the ESG-UQAM Chair in Tourism (University of Quebec at Montréal):

The hard road travelled

In the 1980s, travel agencies ruled the roost in the travel sector, booking approximately 80% of all plane tickets. In the mid-1990s, the tide turned as the airlines began reducing the commissions paid to agencies, only to cut them completely in the aftermath of 9/11. At the same time, new competition appeared in the form of online travel agencies that enabled consumers to easily reserve their own airline tickets.
This proved to be a turning point as agency sales truly plummeted. The extremely dire business environment led to major restructuring in the sector and between 1996 and 2006, the number of service outlets dropped 50%. After more than a decade of decline, the profession of travel agent is now regaining its status.

Of course, the perennial question among both consumers and travel insiders is: who offers the best price, travel agents or the internet? Unfortunately, there is no simple answer and many experts have offered contradictory opinions on the subject in the past few years. That said, it would seem that travel agents usually have easy access to the best prices found on the Web, or even better. However, price is not the only way in which agents must set themselves apart.

Competing directly with the internet, agents must offer added value to the customers who make the effort to consult them. In particular, consumers are looking for someone responsible should there be any problems. Although online agencies have made some progress in this respect, they still tend to be harder to reach and offer less reassurance. The help of an expert is very valuable when purchasing more complicated products or expensive trips, particularly those involving international travel.

Customer service: the key to success

The transition to zero commissions now seems complete. Travel agencies have regained the trust of a large percentage of customers and have improved their profitability, even though some of their activities, like simple transactions, have been taken over by the internet. Airline ticket sales, which often offer little added value in the way of customer service, have dropped dramatically. Customers who deal with agencies today are looking for more than what is easily found on the internet; people increasingly recognize the value of the travel agent’s work and agree to pay for this service.

Beyond the price, customers appreciate, for example, advice on selecting the best room, restaurant suggestions, good places to visit, or even how to obtain a possible upgrade. The quality of customer service has fostered consumer loyalty to the agencies and is how the best agencies distinguish themselves from the competition. The addition of new services has also helped retain customers; many occasional customers have gradually become partners of a sort, as a relationship of trust has grown.

More to the point, agents can make good use of the internet to help their customers. Many agents have become veritable experts who, instead of focussing on particular destinations, now increasingly specialize in specific customer segments (scuba diving aficionados, religious groups, recovered alcoholics, etc.).

The habits of Quebeckers

Although online sales have boomed in the past few years, the sales figures for Quebec travel agencies are also experiencing surprising growth. According to numbers from TourismExpress.com, Quebec retail agencies posted total sales of $2.83 billion in fiscal year 2006-2007, or a 9.4% increase over the preceding year. While the sector experienced a major consolidation of activities as the number of Quebec sales outlets dropped from 1308 in 1992 to only 812 today, average sales per agency location have risen 64% since 1999.

For a tour operator like Transat, the network of agencies clearly continues to play a leading role in the sale of its travel products. According to Transat’s co-founder, Linda DeCesare, 90% of the company’s sales still come from packages sold by agencies. Many customers now use the Internet to shop around, but still prefer to conduct their transactions in person with an agency.

A closer look at the reservation habits of Quebeckers shows they are more likely to use a travel agent when purchasing international travel (Figure 1). Over 44% of vacationing Quebeckers travelling by plane in Canada have used the services of an agent, compared to 58% of those vacationing outside the country. The difference is even more apparent when it comes to hotel reservations. Only 12% of Quebec vacationers asked an agent to book their accommodations within the country, while 35% requested assistance with international accommodations.

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Ontario travellers behave similarly when it comes to domestic trips. However, when it comes to international travel, Ontarians are slightly less inclined than Quebeckers to call on the services of a travel agent.

New ways of doing business

Now asked to act more as travel consultants, agents have adapted their behaviour to this new reality. For example, they pay a lot more attention to discussions with their customers. Some agencies have taken the initiative of reorganizing their offices so they can receive people in a warm, welcoming environment. They increasingly use small private lounge areas to make the most of personalized meetings with their customers. The “service counter” approach has been replaced by the sales technique of sitting around a table.

During these pleasant discussions, many salespersons now adopt the tactic of complete transparency. With online computers available during the consultation, the consumer has direct access to the same information, at the same time as the agent. This strategy of openness has the virtue of creating a relationship of trust and showing the customer that the agent is working to build the trip with the customer’s input. A recent poll by Home-Based Travel Agent shows that a number of consultants now use the internet to conduct research or make bookings for their customers (Figure 2).

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Agency offices are changing too

Many agency owners have jazzed up the appearance of their offices. A trend towards thematic décors has replaced the classic travel poster. Some European firms look more like art galleries than travel agencies. With this approach, design and décor are used to transport visitors to another world, before they even leave home. For example, some agencies feature large exotic trees, or appeal to the senses with scented teas, candles, perfume, etc. Sometimes, they even display imported water bottles from various countries.

Another emerging trend seems to be the sale of travel accessories. For example, the Voyageurs du Monde agencies in France present themselves not as agencies, but as experiences. They sell maps, GPS systems, books and other useful travel accessories. In Quebec, the Tourisme Jeunesse chain of agencies has adopted this approach for many years.

Some agencies have developed a cultural side to their products by organizing sales exhibitions of arts and crafts from around the world. These exhibitions attract new customers to the agency and enhance the décor. Other ways to stand out from the competition are activities like cocktail lectures and photography workshops.

After several years of major upheavals, it would seem that the distribution network is reaching a new equilibrium. The remaining traditional agencies are in a stronger position, the dizzying growth of online agency sales is rapidly slowing and suppliers like airline companies and hotel chains now attract consumers for simple transactions. However, we have learned from past experience that periods of calm never last for very long.

Sources:
– Alvarez, Leticia Suarez, Ana Maria Diaz Martin and Rodolfo Vazquez Casielles. “Relationship Marketing and Information and Communication Technologies – Analysis of Retail Travel Agencies,” Journal of Travel Research, Vol. 45, May 2007.
– Bellstrom, Kristen. “Travel Agents Are Staging a Comeback,” SmartMoney [www.smartmoney.com ], May 17, 2007.
– Charollois, Philippe. “À nouvelles agences… nouvelles méthodes,” L’Écho Touristique, March 9, 2007.
– Charollois, Philippe. “Des agences chic et choc,” L’Écho Touristique, March 9, 2007.
– Dansereau, Suzanne. “Vents favorables pour Transat,” Journal Les Affaires, June 23, 2007.
– Désiront, André. “Le chiffre d’affaires des agences de voyages,” TourismExpress.com, July 10, 2007.
– Ellin, Abby. “Happy Returns for Travel Agents,” The New York Times [www.nytimes.com ], July 3, 2007.
– Jaladis, Stéphane. “Les agences ont survécu à la commission zéro,” L’Écho touristique, March 30, 2007.
– Mielke, Randall G. “Customer Service Key to Small Travel Agency Survival,” Beacon News, [www.suburbanchicagonews.com ], July 17, 2007.
– Mills, Stasha. “How Plugged In Are You?” Home-Based Travel Agent, May 1, 2007.

Online:
Voyageurs du monde

Catégories
Around the world etourism and technology Management Marketing @en

Interhome: a good example of best practices

At the 2007 ITB Berlin Trade Fair, Simon Lehmann, CEO of Interhome, spoke on the topic of Customer Relationship Management (CRM), an approach adopted by Europe’s largest holiday rental accommodation agency. The impressive results testify to CRM’s undeniable impact when used in conjunction with a personalized marketing strategy.

What is CRM?

The goal of CRM is to collect as much information about one’s clients as possible, and to combine these individual pieces of information into targeted, personalized marketing initiatives in order to recruit and retain clients and encourage them to spend more.

Interhome and the reassessment of previous practices

Interhome has offices in 20 countries. Each year, it rents over 20,000 vacation homes and apartments to over 500,000 guests, for over 7 million overnight stays and sales of 120 million euros. In order to promote an inventory of this size to such a large number of potential clients, Interhome uses a variety of communication, promotion and sales methods including distribution networks, advertising, a sales force, catalogue, and the internet. Although the company’s management team believes this number of methods is unavoidable, it is also convinced that using them prevents it from developing an accurate assessment of the profile and habits of its clients.Reflecting on this fact, Interhome’s managers began to ask themselves whether the impressive catalogues listing all the available homes were, in fact, relevant or effective. Producing them involved costs which were not necessarily offset by the relatively low reservation (or conversion) rate. The company also realized that client‑related information was distributed throughout a number of databases.

Know your client

It was then that Interhome decided to invest in CRM in order to consolidate and improve its client‑related information. This new database stores three different kinds of information:

  1. history of the consumer’s contact with the company (catalogue orders, reservations, comments and complaints, etc.);
  2. data collected during each consumer contact (visiting the site, requesting information, reserving a home, etc.) regarding his/her vacation preferences;
  3. complementary information obtained via surveys (lifestyle, purchasing habits, household composition, habits and leisure activities, etc.).

Thanks to this information, Interhome was able to develop a system that creates a profile for each customer. These profiles list the customer’s profile, his/her loyalty index and the complete history of his/her interactions with the company.

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  • prior expenditures
  • preferred destinations
  • preferred travel periods
  • favourite type of accommodation
  • family situation: number of children and their ages
  • leisure activities, interests and motivating factors
  • preferred method of communication

CRM enables companies to gather the information they need to create detailed consumer profiles which they can then use to implement marketing strategies based on personalized offers.

1‑to‑1 marketing

In order to bring consumer preferences in line with their offer, Interhome developed a new method of classifying residences based on the client’s stated preferences: spa, family, sports, comfort, pleasure, rest, snow and dream destination. Interhome analyzed the client profile in order to identify the product categories likely to interest him/her. It then analyzed the characteristics of each vacation home (location, accommodation capacity, price, availability, etc.) so it can propose to each of its clients places that are perfectly suited to their preferences. Henceforth, instead of receiving an exhaustive catalogue, the client receives a brochure listing no more than 8 prospective residences that both fulfill his/her requirements and are available during his/her preferred travel periods. This also enables Interhome to prioritize homes that will generate the highest profit margins.

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This personalized brochure is either mailed or e‑mailed depending on the customer’s stated preferences. Automatic follow‑ups are generated by the system and all reservations can be made through Interhome’s website. It goes without saying that all action (requests for information, reservations, etc.) generated by this mailing will be added to the client’s profile, thus further increasing Interhome’s effectiveness.

Telling results!

Lehmann emphasized that the cost per reservation is 10 times lower with the personalized, or “1 to 1” marketing approach than it is with the undifferentiated, catalogue approach. Some of the results he mentioned are as follows:

  1. a 30% reservation rate following a request for information (as opposed to a 7% rate with the catalogue);
  2. the average rate is one reservation for every 12 direct mail messages, a higher‑than‑average conversion rate for direct marketing;
  3. significant savings on postage, since two‑thirds of mailings are done electronically;
  4. a savings of 500,000 euros on the cost of printing catalogues;
  5. because the company was able to prioritize homes that would generate the highest profit margins as well as profitable complementary sales (transportation, car rentals, ski tickets, trips, packages, etc.), revenue per reservation increased by up to 30%;
  6. every year, over 200,000 new client‑related information items are added to the database.

During his presentation, Lehmann did not reveal how much his company spent to develop such an effective CRM system but the results he presented lead one to believe that the move was a profitable one.

Will other tourism companies follow suit?

Many tourism companies have already gathered a significant amount of information about their clients and a number of these companies would probably benefit from adopting the same type of CRM that Interhome did. After all, client data is a gold mine; once data is collected, all the company has to do is put the data to work to make its marketing efforts more targeted and effective. Source: * Lehmann, Simon, “Best Practices in CRM & Personalisation, 1 to 1 Marketing @ Interhome,” PhoCusWright conference – ITB Travel Technology, Berlin, March 8, 2007.

Catégories
Around the world Customer segments

Loyal customers spend less than new customers

Spanish researchers have analyzed the expenditures of travellers in relation to how many times they have visited a destination. According to their findings, returning travellers spend less than first‑time visitors, primarily because of their increased knowledge of the destination. Destinations may want to consider the true economic benefits of new visitors versus loyal customers in relation to the money spent to attract them.

The advantages of loyal customers

In the tourism industry, regular customers are generally desirable for a number of reasons, in particular:

  • Marketing costs for attracting loyal customers are lower than those required to solicit new business.
  • A repeat customer usually indicates satisfaction with the product or service.
  • Customers who regularly return to a destination tend to encourage those around them to do the same.

In economic terms, destinations appreciate repeat visitors because they help stabilize market share, require lower promotional costs, and are less sensitive to price variations and potential service problems. However, another factor comes into play: returning travellers are more familiar with the destination and able to make more informed decisions when it comes to most travel expenses.

The Balearic Islands: A case study

Researchers Joaquin Alegre and Catalina Juaneda, from the University of the Balearic Islands, have attempted to analyze the relationship between consumer behaviour and repeat visits. The study looked at a sampling of German and British tourists vacationing in Spain’s Balearic Islands; many variables were analyzed, such as the number of visits to the destination and motivations like delivery quality.

In particular, the study examined the fact that first-time visitors are initially influenced by external factors, primarily the cost of the trip. Once destination quality proves to be a critical factor, high price is often seen as the best indicator of quality. As for repeat visitors, they are more motivated by factors linked directly to the destination, for example, hotel and service quality.

Not all tourists can be loyal

To clearly understand the context of repeat visits, it is important to realize that some tourism motivations run counter to destination loyalty. For example, for those who see travel as a break from routine (an opportunity for unique experiences and the discovery of new places, new people and other cultures) destination loyalty is not appealing. Travellers fitting this description would generally not be interested in revisiting a destination.

On the other hand, individuals with little tolerance for risk would feel comforted and relieved to return to the same place. This type of traveller usually seeks relaxation, comfort, a familiar environment, and a minimum of uncertainty and risk. Moreover, it takes time and effort to find and research a new destination, and money to set up new routines.

Differences observed

Why do first-time visitors spend more? Even if they have managed to compile a lot of information from travel guides or Web searches, it is very difficult to acquire intimate knowledge of local pricing realities. Given this lack of information (and more importantly, lack of first-hand experience), first-time visitors readily accept prices that may, in fact, not be considered competitive.

The study’s findings show that repeat visits to a destination have an influence on tourist expenditure patterns. The share of expenditures made in the home country of travellers who are visiting for the second or third time is 28% lower when compared to expenditures by new visitors. The difference is even more significant (32%) among tourists who are on their fourth or higher visit.

The impact of customer loyalty on consumer behaviour is even more remarkable when one looks at the amounts spent at the destination itself, during the vacation. Repeat visitors, regardless of how many times they have been, spend 40% less than first-timers.

Other motivating factors

Tourists who attach a great deal of importance to hotel quality tend to spend more on their vacations, both at home before the trip (+49%) and at the destination (+44%). People who consider the quality of their surroundings to be important also spend more, especially at the destination itself (+28%). A similar observation can be made about tourists who return to the same region, with expenditures of 17% more in the destination country.

The study findings also demonstrated the following:

  • Repeat visitors are more likely to opt for half-board lodgings, in other words, accommodations that include one or more meals.
  • Loyal tourists have a longer length of stay.
  • The more times tourists visit a destination, the more they tend to visit the same region.

Lessons learned?

A destination’s positioning should consider the proportion of new to return visitors. When a large percentage of one’s customers are not first-timers, it may be risky to promote services with a large mark-up. According to the study’s authors, increased profitability from unit sales will not be enough to compensate for an eventual decline in the number of visitors from a well-informed customer base.

Obviously, the example presented by the researchers covers only the case of the Balearic Islands (a sun destination) and is based on a restricted clientele, that of British and German tourists. However, the study’s authors conclude that their findings still apply to many destinations.

Sources:
– Alegre, Joaquin and Catalina Juaneda. « Destination Loyalty: Consumers’ Economic Behaviour, » Annals of Tourism Research, Vol. 33, No. 3, p. 684-706, 2006.
– Um, Seoho, Kaye Chon and YoungHee Ro. « Antecedents of Revisit Intention, » Annals of Tourism Research, Vol. 33, No. 4, p. 1141-1158, 2006.

Catégories
Customer segments

Make the most of market segmentation with geomarketing

As marketing experts promote the benefits of segmentation and niche marketing, the tourism sector would do well to investigate geomarketing. This new approach classifies and geographically pinpoints population groups to both identify potential markets and determine the best ways to reach them.

There’s « geo-info »…

Although it is crucial for companies in the tourism industry to know their markets and clientele, many of them view compiling lists of client postal codes as an onerous task.`

It is, however, well worth the effort since grouping clients geographically enables companies to pinpoint their current markets. Knowing the regions and municipalities their clients come from enables marketing executives to more effectively target their advertising messages. While this time-honoured practice provides companies with information about their current client base, it does not allow them to identify and penetrate new markets – the primary basis for growth.

… and then there’s geomarketing!

Briefly, geomarketing is a marketing concept that uses geographical data to analyze consumer behaviour and expectations. The value-added factor derives from the application of location-based information, combined with segmentation.

By examining demographic, economic and sociological data through the filter of the environment in which client segments live, geomarketing enables tourism companies to make new connections between geography-based market data and client segmentation based on consumer habits.

Birds of a feather…

One of the principles of geomarketing is that people with similar tastes, values and behaviour will tend to congregate. It therefore follows that, once the company has compiled information on its customers’ lifestyle types, it can use geomarketing to identify the neighbourhoods where this type of clientele represents a significant percentage of the population.

Consumer segmentation systems by lifestyle types

The current popularity of this marketing approach has led a number of research firms to develop consumer segmentation systems by lifestyle types. Some of the more well-known ones are:

  • PRIZM CE from the Canadian company Environics Analytics, based on the PRIZM system developed by American company Claritas. This system classifies Canadians into one of 66 groups (www.environicsanalytics.ca);
  • PSYTE@ADVANTAGE, by Mapinfo Corporation and Compusearch Canada, divides the Canadian population into 65 different lifestyle segments (www.mapinfo.com);
  • FOCUS, by Quebec’s Optima Marketing, has a different approach; it divides the population along provincial and territorial lines, with 20 segments in Quebec alone (www.optimarketing.com).

Each of these companies has drawn on information from a variety of sources, such as Statistics Canada or the Print Measurement Bureau (PMB), in order to develop client segmentation systems that take into account demographic, economic and consumer data.

What can it do for you?

If your company or organization wants to try this approach, read on for a basic introduction to geomarketing:

Step 1: Find out where your clientele comes from:

  • Determine which segment(s) of your clientele you want to target by this approach (pleasure or business, summer or winter, etc.). This classification usually focuses on a number of factors: reason and frequency of visits, choice of activities, services used, average spending, etc.
  • Use postal codes to determine where the clients in each of the segments come from. Choose a research firm to create a map that represents this information visually.
  • Identify the areas (regions, cities or neighbourhoods) with a high concentration of your clients. Note absolute values as well as penetration rate (percentage of clients in terms of total population).
  • This will help you pinpoint your « success areas », i.e., those areas where your company’s clientele comes from.

Step 2: Next, identify the client lifestyle types originating in each of these success areas:

  • Find a company that specializes in geomarketing and choose a segmentation system that identifies lifestyle types by residential area.
  • Have the geomarketing specialist help you analyze each of your chosen geographical areas and identify the lifestyle types that represent the highest percentage of area residents.
  • Compare these sociodemographic descriptions (habits, interests, consumer profile) with the characteristics displayed by your clients on-site, in order to identify the lifestyle type(s) that correspond to these clientele segments.
  • This will enable you to identify the lifestyle types of your clientele – or, at least, that segment of your clientele targetted by this process.

Step 3: Find new areas where clients from the same lifestyle segment are likely to live:

  • Have the geomarketing specialist help you draw up a list of places where much of the population has a lifestyle profile similar to the one displayed by your current clientele.
  • You will obtain a list of areas (regions, cities or neighbourhoods) in which the residents are more likely to be interested in your product or service since they have the same lifestyle profile as your current clientele.

If your company plans to follow up by implementing a marketing plan, geomarketing tools can also generate the kind of information that will maximize your campaign’s effectiveness. For example:

  • Identifying the postal codes of high-potential areas means you can pinpoint the best strategies to use for mass-mailings or newspaper inserts;
  • Combining a specific aspect of a consumer profile (such as interest in a certain activity) with a list of pre-selected postal codes enables you to purchase or rent address lists for a targetted mailing;
  • Identifying the reading habits (newspapers, magazines, etc.) of your selected profiles enables you to maximize the effectiveness of your media advertising budget;
  • Identifying purchasing habits not related to travel and tourism also paves the way for the creation of non-traditional business alliances and partnerships.

Make your client database work for you

The more varied and specific kinds of information you have about your clients, the more marketing opportunities you have at your disposal. Since it is increasingly becoming both impossible and unprofitable for companies to try and reach every customer out there, it is high time they focussed on currently available client data. Geomarketing could be an interesting way for some of these companies to put that data to use.

Sources:
– Institut d’analyse géographique (ISG). Qu’est ce que geomarketing?, [www.iag.asso.fr] www.iag.asso.fr/questions/geomarketing.htm.
– Latour, Philippe. Geomarketing, vite!… mais pas trop, [www.visionarymarketing.com] visionarymarketing.com/articles/geomarketing.html.
– Niot, Carine. Géomarketing: un nouvel outil au service des entreprises, Indexel [www.indexel.net], January 3, 2002. www.indexel.net/doc.jsp?id=1341.

Catégories
Human resources Management

Mobilize your staff to surpass customer expectations!

In today’s very competitive marketplace, many tourism-based organizations would like to differentiate themselves by trying to provide service that surpasses customer expectations. If they are to succeed, these businesses must first mobilize their human resources to offer customers superior service quality and a distinctive experience.

With customer service now the cornerstone of a value-based, rather than cost-based, approach, managers of tourism-based businesses must successfully mobilize their staff to afford visitors a quality experience. Mobilizing staff can also help improve job satisfaction – and satisfied employees offer superior quality service!

Managers wishing to mobilize their employees can choose from various human resource management approaches: staff involvement, participatory management and employee empowerment are some of the most common. The Quebec tourism industry offers the following definitions – and concrete examples – of each approach:

Involvement: Rules, procedures and activities to help employees better understand the organization and its issues so they can support and contribute to the achievement of its goals.

An example of this management approach is the use of staff memos and meetings to communicate the company’s position, performance, challenges, specific objectives and action plans. By increasing employee awareness, management helps employees understand their role or function within the organization; this, in turn, helps create or strengthen their sense of usefulness and belonging.

Participation: Rules, procedures and activities used to offer employees opportunities to influence or take part in organizational decisions – at least those that affect them directly. Typical of this type of approach are staff committees, suggestion boxes, employee surveys, etc.

In Quebec, for example, the Novotel Montréal Centre has made this method part of its recruitment process. Regardless of the position to be filled, three staff levels are involved in hiring interviews:

  • the head of the department involved: to verify the candidate’s technical skills
  • the hotel manager: to verify the candidate’s attitude
  • an employee occupying the same position (to verify the candidate’s attitude and skills)

To be hired, candidates must receive positive evaluations from all three interviewers. The goal is to ensure low staff turnover and it seems to be working: staff turnover at the Novotel Montréal Centre is only 19% compared to Montreal’s hotel industry average of 49%. Furthermore, employees have also developed a strong sense of company pride and allegiance.

Empowerment: Rules, procedures and activities used to give employees greater latitude by granting them discretionary power in their jobs so they can better achieve corporate goals. In terms of customer service, the concept of empowerment is most often employed to help resolve problems experienced by customers.

For example, at Parc Safari in Hemmingford, all employees – regardless of their position in the organization – have the power to offer guests (customers) who are dissatisfied with some aspect of their stay a free pass for a return visit to the park.

At the Hilton Lac-Leamy in Gatineau, the concept of « dream service » allows hotel employees to pamper guests with certain rewards (a free drink, for example) without having to obtain authorization from management. The approach has been so successful, it has been extended to the entire Lac-Leamy complex (hotel, casino, casino theatre and convention centre).

Satisfaction and loyalty

According to a recent study by Maritz Research, and contrary to what some in the hotel industry may believe, the pro-active approach of surpassing customer expectations is more effective at encouraging customer satisfaction and loyalty than the problem-solving approach. In fact, customers who enjoy a problem-free experience that exceeds their expectations are more likely to come back, or refer the company to a friend, than are customers who encounter a problem during their stay, even if the problem is solved more effectively than the customer expects.

Further, professors Anthony J. Zahorak and Roland T. Rust of Vanderbilt University in Nashville recently conducted a study on customer satisfaction showing that 25% to 40% of so-called « satisfied » consumers would still not return to a business where they had enjoyed an experience that was merely satisfactory.

This surprising piece of information illustrates that today’s businesses cannot survive if they simply aim for customer satisfaction. Certain well-informed and experienced market segments are curious and increasingly demanding, which means managers must now identify new ways to surprise and attract customers.

Shep Hyken, a professional speaker and author in the US, has an interesting suggestion for businesses: create « demanding customers. » By setting a high standard of service, a business helps create demanding consumers. If such customers decide to do business with a competitor, they will expect the same service quality they have become accustomed to; the higher the bar, the harder it is for consumers to find another business able to satisfy their needs and the more likely they are to remain loyal!

« It is the service we are NOT OBLIGED to give that people VALUE the most! »

– James C. Penny –

Sources:
– Conseil québécois des ressources humaines en tourisme and Tourisme Montréal. « Recherche et analyse de bonnes pratiques en ressources humaines – Destinations métropolitaines en Amérique du Nord, » April 2005.
– Hyken, Shep. » Building Customer Loyalty, » [www.hyken.com], no date.
– McGunnigle, Peter.  » Resource Guide to Employee Empowerment, » Hospitality, Leisure, Sport and Tourism Network [www.hlst.heacademy.ac.uk], no date.
– Orilio, William. « SERVICE – Boy, do customers know it! » e-hotelier [www.ehotelier.com], December 2, 2004.