Étiquette : personalization

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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.

Concierge_virtuel_Virgins_hotels

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

 

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Marketing @en Products and activities

Innovative promotions from the events industry

A best practices benchmarking study of the festivals and events industry carried out by the Transat Chair in Tourism for Festival et Événements Québec and several other partners highlights initiatives in various facets of the events industry. Here are some examples of these practices in the fields of promotion, product development and customer experience.

Film

Video is a powerful media, especially when it comes to promoting an intangible product. Festivals understand this. Tomorrowland, the Belgian electronic music festival, creates a half hour film to recap each year’s edition. The 2012 Official Aftermovie has been viewed nearly 16 million times. This video is featured on the Tomorrowland website’s home page.

Source: Tomorrowland.com

Think social media

In addition to video, the Wanderlust yoga festival has developed several tools to promote its events. Organizers provide models for social media status updates to encourage participants to share information and message templates for yoga teachers who would like to invite their students (see example below).

CB_bonnes_pratiques_festivals_image_2

Source: Wanderlust.com

On top of its official account, which organizers use to publish festival news, the Glastonbury Festival of Contemporary Performing Arts created the @Glastoinfo Twitter account specifically to act as an information centre. During the festival, authorized users of this account answer questions from festival-goers from 8:00 am to 11:30 pm.

For the 2014 edition of the Tomorrowland festival, organizers linked attendees’ RFID bracelets to Facebook to help them make new contacts. When two festival-goers in the same vicinity pressed a button on their wristbands at the same time, they were each sent a Facebook friend request.

Go off-site

The Nashville airport is promoting Bonnaroo by featuring works of art inspired by the music festival.

CB_bonnes_pratiques_festivals_image_3

Taking place in late February, the Glasgow Film Festival in October presents free screenings of movie classics in shopping centres or department stores. During the festival itself, films are also screened in unusual places, like the subway and Glasgow Cathedral.

The Bluesfest in Ottawa has joined forces with its neighbour, the Canadian War Museum, for the display of festival posters. During the Bluesfest, the Museum’s lobby walls are decorated with an array of posters from past years.

Engage the community

The Reebok Spartan Race and the Festival IF3 have put together teams of ambassadors who work to publicize the events and encourage people to register. The Spartan Race Street Team will be made up of over 5000 members around the globe. The more people these team members sign up for the race, the more rewards they receive, like products, coupons or free admission.

Bluesfest organizers have also set up an advisory committee of some fifteen high school and university students to better identify their interests and ways to reach this public.

Since 1980, the Edinburgh Festival Fringe has organized a competition inviting young people ages 5 to 16 to create the official festival poster.

CB_bonnes_pratiques_festivals_image_4

Source: edfringe.com

For its events in Montreal and Quebec City, the IF3 International Freeski Film Festival holds a contest inviting local amateur filmmakers to create  an urban skiing video and present it at the festival.

Improve your product

Events must renew their product offerings to maintain their momentum, stay competitive and encourage return visitors. At the Melbourne Food and Wine Festival, a temporary structure featuring the theme of water was set up on the banks of the Yarra River. A three-storey space with an open kitchen, floating bar and rain garden, the Immersery – Festival Kitchen, Bar & Raingarden was the centrepiece of the 2014 edition.

CB_bonnes_pratiques_festivals_image_5

Source: Archello.com

The Reykjavik Winter Lights Festival  has featured Pool Night since 2012. Five pools and a spa offer an evening of swimming with a light show, music and various activities.

The 2014 edition of the Glasgow Film Festival included Street Food Cinema, which offered the public an opportunity to enjoy dishes associated with the film being screened.

CB_bonnes_pratiques_festivals_image_6

Source: Glasgow Film Festival

Customize

The events industry has not escaped the trend of increasingly personalized service. The National Arts Festival in Grahamstown, South Africa, and the South by Southwest (SXSW) multimedia happening in Austin, Texas, have both created customizable areas on their websites, where attendees can create a list of favourites, plan their schedule and manage their loyalty program.

This is also true of the Festival d’Avignon and Lollapalooza music festival websites, the latter of which features the « My Lolla » zone that enables users to create their own festival page with their favourite artists, custom lineup and the type of information they wish to receive. They can then share their choices on social media.

CB_bonnes_pratiques_festivals_image_7

Source: Lollapalooza

Get inspired

Festivals and events follow and adopt the trends that best suit their themes and target customer segments. The events studied are constantly evolving and demonstrate truly inspiring energy and creativity.

 

Analysis written in co-operation with Caroline Lévesque

 

Image on first page: © Minnie Roe, The Edinburgh Festival Fringe

Catégories
etourism and technology

Search, User Generated Content and Online Booking

There are 2,3 billions internet users in the world with significant penetration ratios in countries all over the world(5). Recently, User-Generated Content (UGC) has been considered as one of the most important sources of information influencing tourists’ choices. Despite this, few studies have focused on examining cross- visitation, that is referral and conversion traffic from UGC to other key online and offline information sources. Further, little research has focussed on analysing when consumers use UGC along with their information-search and the related cross-visitation.

Some empirical data

UGC plays a relevant role along with all the online searching and booking behaviour of tourists, particularly UGC within third-parties websites. Referring to the so called “billboard effect”, recent research showed that consumers’ decision making often starts by looking at Online Travel Agencies (1,2,4), whose posts of reviews and comments clearly influence tourists choices and online booking(3). Analyzing 1,720 reservations for InterContinental Hotel Brands, a study reported that almost 75% of consumers who booked through the official website of Intercontinental had visited an OTA prior to making the reservation, with nearly 83% performing a search on Google, Yahoo or Bing and two-thirds performing both a search and an OTA visit (2). Further, cross-visits by OTA shoppers to Facebook exceeded seven in 10 whereas cross-citation with Twitter was found to be at around 25% for both OTA and hotel web site buyers (6).

The when consumers use UGC: the Italian tourists’ behavior

Recently, an empirical study was carried out on a sample of 623 Italian tourists to analyze the when consumers use UGC along with their information-search and the related cross-visitation (4). The final open-ended question asked participants to fully describe the way they usually search for information when making hotel reservations. Their open answers were manually coded considering the sequence by which each category of information (both online or offline) were cited (that is step 1, step 2, etc). It was then possible to calculate the frequencies by which the different sources were found to be used along with the respondents’ information-search.

Table 1 shows in which stage each information source is used by respondents to make their hotel booking.

Table 1 – The online information-search: what information sources do tourists use? (%)

The majority of respondents stated that they start their online booking by using OTAs (45.6%) or search engines (23,2%). 14.5% of them reported referring to tourism-related social networks (such as TripAdvisor, Zoover, etc) in the early stage of their search-information process. Furthermore, Table 2 shows that tourists sometimes finalize their booking via traditional travel agencies or via direct contact with hotel (phone call or email).

Further insights on tourists’ booking behaviour can be obtained by concentrating our attention on what happens once tourists start a search via OTAs and search engines, the information sources that appear to influence the early stage of the search the most.

As shown in Figure 1, 23.2% of respondents start their search through search engines and then visit the hotel’s own website (37.2%), or OTAs (24.6%) or tourism-related social network (8.7%).

Figure 1 – Online booking starting with search engines: how do tourists search for information?

Source: Del Chiappa(4)

22.6% of those visiting the hotel website at the second step of their search, proceed in the next step via phone call or email (19.4) or visiting an OTAs to search for comments and reviews and/or to look for more convenient rates (22.6%). There is also a 12.9% of tourists who continue to look for other UGC in tourism-related social networks. 24.6% of those visiting OTAs at the second step, proceed to visit the official websites (50%), other tourism related social networks (19.2%) or make a phone call to the hotel (11.5%).

Figure 2 – Online booking starting with OTAs: how do tourists search for information?

Source: Del Chiappa(4)

According to Figure 2, 45.6% of respondents start their research through OTAs and proceed to visit the hotel’s website (55.2%) or other travel 2.0 application, that is tourism related social networks (19.7%). Then, 69,4% of those visiting hotel websites at the second step of their search, proceed via email (36.5%), phone call (32.9%) or other tourism-related social network (12.9%). 17.9% of those visiting tourism-related social networks at the second step, then visit the hotels’ website (72.7%), or place a phone call (9.1%) or visit photo sharing websites (3%).

Managerial implications and suggestions

Better knowledge on how information is acquired, enables marketers to better influence tourists’ buying decisions. The aforementioned research suggests that hotel marketers should monitor their brand reputation over the internet and should pay particular attention to UGC uploaded onto On line Travel Agencies, considering that it is by looking at ratings/ comments within these websites that consumers’ may decide to include or exclude a given hotel from their potential set of choices. Tourists would then be able to consider the hotel as they proceed in their information search using all the other information sources. Further, findings suggest that hotel marketers should adopt a multichannel communication and distribution strategy (on-line and off-line) to influence tourist choices and should manage their internet strategies (parity rate, effective booking engine, call-to-action, etc) and their customer service in order to convert as much traffic generated by OTAs (and other Travel 2.0 applications).

 

References

(1) _ Anderson, C. K. (2009). The Billboard Effect: Online Travel Agent Impact on Non-OTA Reservation Volume. CHR Report. The Center for Hospitality Research at Cornell University, 9(16).

(2) _ Anderson, C. K. (2011). Search, OTAs, and Online Booking: An Expanded Analysis of the Billboard Effect. CHR Report. The Center for Hospitality Research at Cornell University, 11(8).

(3) _ Del Chiappa, G. (2011). Trustworthiness of Travel 2.0 applications and their influence on tourist behaviour: an empirical investigation in Italy. In R. Law, M. Fuchs and F. Ricci (Eds.), Information and Communication Technologies in Tourism 2011, 343-353. Vienna, Austria: Springer.

(4) _ Del Chiappa, G. (2012). User Generated Content and its influence on tourists’ choices: how do tourists make hotel reservations online? Turistica, Special Issue “Content Personalization and Multimedia Marketing for Destinations and Tourism Business, 1, pp. 39-50. Paper presented at Modern Hospitality and Tourism Development Conference, Università di Allameh Tabataba’i di Teheran.

(5) _ Internet Word Stats. (2011). Top 20 countries with the highest number of internet users. Accessed online (August 31, 2011) at http://www.internetworldstats.com/top20.htm.

(6) _ PhoCusWright. (2011). Social Media in Travel 2011: Traffic, Activitiy & Sentiment.

 

Giacomo Del Chiappa – Assistant Professor in Marketing, Faculty of Economics, University of Sassari
Giacomo Del Chiappa received a Ph.D in “Marketing and Business Administration” at the Faculty of Economics of the University of Milan-Bicocca. He was Visiting Scholar at the University of Melbourne (Australia). He is Assistant Professor in Marketing at the University of Sassari, Faculty of Economics. He teaches in the areas of “Tourism Management and Marketing” and “Destination Management” for the Degree in Tourism Marketing and Management, based in Olbia (Sardinia). He is a member of the editorial board of the journal “Tourism Analysis” and referee for international journals. His research topics are related to destination governance and branding, convention site selection criteria and meeting industry and, finally, consumer behavior in tourism. In this latter field his studies are concentrated on responsible tourism, on web 2.0 in the hospitality sector and, finally, on community-based tourism. Fields of expertise:

  • Destination governance and branding
  • Convention site selection criteria and meeting industry
  • Consumer behavior

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Customer segments Products and activities

More to luxury travel than meets the eye

The transition from an emphasis on the tangible to a focus on the emotional is changing the face of luxury travel. Products are evolving to include uniqueness, eccentricity and exclusivity in the travel experience. In the luxury market, authenticity is key and providers have to keep things fresh.

Without doubt, today’s luxury consumers are increasingly diversified and their behaviour has changed over time. Travel industry insiders now talk about traditional luxury versus new luxury: the former is associated with five-star hotels, posh resorts and high prices, and the latter, while still expensive, is the anti-thesis of material consumption and the desire to possess costly objects. Focused on emotions and experience, it has more to do with the manner in which one consumes luxury items.

Luxury means…

  • a spacious hotel suite, a room with a view, a penthouse, a limousine
  • an upscale brand, a place where the staff knows your name

But it also means…

  • time, space, silence, privacy
  • an emotional experience
  • getting away from daily concerns and the complexity of the world at large to a place where everything is simple and easy
  • something original, out of the ordinary, and above all…
  • exclusivity!

A diversity of experiences, from the eccentric to the unique

A luxury traveller can rent a fifty-room castle in the Scottish Highlands for a family reunion or charter a fully crewed yacht for a honeymoon in the Mediterranean. He can practice an extreme sport and look forward to a butler and spa services at the end of the day. Interested in personal development, she can learn photography, sailing, join an archaeological dig or cook with a famous chef. Consumers are pushing the envelope in their quest for what is new and exclusive. Established standards are falling by the wayside; more and more, luxury clientele want to be where the action is and optimize the self-fulfilment aspect of their experience.

The upscale travel site www.thebluefish.com offers clients the chance to become a fighter pilot for a day (Top Gun Challenge), fly over the Himalayas and see the summit of Mt. Everest, take part in a high-performance boat race from Miami to Key Largo (Poker Run), take a private jet to an exclusive golf and safari experience in South Africa, and more.

Conversely, luxury travel can also cater to a completely different set of needs: relaxation, privacy, a focus on health, personal pampering and an opportunity to experience renewal. These other needs mean that companies operating in the luxury niche have to offer a wider variety of more sophisticated products – from spas to spiritualism and from mud wraps to meditation.

At the same time, there is the desire among luxury consumers for ownership – even partial – of something like a villa, yacht or condominium on board a cruise ship. There is also the « small is beautiful » concept, where guests seek the privacy of a residence club or the ambience of a small hotel to fulfil their desire for intimacy.

Many destinations that are still considered exotic, such as South America (with Brazil at the top of the list), the Baltic states, Africa, China, the Middle East, Asia and the Pacific Rim, are attracting new customers, while established urban and resort destinations (London, Paris, Tuscany and the Côte d’Azur) are holding their own.

Soul and style now the signature of the hotel industry

Prestigious institutions in the world of luxury accommodation have recently created chains. For example, the Crillon luxury banner has the celebrated Hotel de Crillon in Paris as its flagship, while the Waldorf-Astoria has given rise to the new Waldorf-Astoria Collection. Another new chain, Capella Hotels & Resorts, has been launched under the direction of Horst Schulze, the man behind the recent success of the Ritz-Carlton.

For the past several years, celebrated architects and icons from the world of fashion and design have been developing hotels stamped with their signature style (there are hotels named Armani, Bulgari and Versace, and each of the 11 floors of the Hotel Puerta America in Madrid was designed by a famous architect). Bathrooms are getting bigger and more lavish. Many hotels are taking on local accents by using materials and décor that reflect the culture of the host country.

Customized and « tailor-made » solutions are now the order of the day. The size of a hotel is becoming a distinguishing factor because it is still quite difficult to deliver quality, personalized service in an establishment with over one hundred rooms. Long-established luxury hotels must shake off the dust if they want to attract Gen Xers (25-40 year-olds), a growing customer segment. In fact, the reputations and austerity of such hotels tend to intimidate these young consumers who are looking for a more modern image and the ease afforded by high-tech amenities.

Spa products very popular

Neil Jacobs, senior vice president-operations, Asia-Pacific, for Four Seasons Hotels, stresses that spas are now a given, just like restaurants and meeting space. Spas have become a deciding factor when selecting a place to stay. Although still in their infancy, destination spas are experiencing tremendous growth. Spas come in various forms: eco-spas, thalassotherapy spas, medi-spas, urban spas and ayurvedic spas (employing traditional Indian folk medicine), to name a few. The privacy afforded by spas, the service focus of these resorts, experienced therapists, authenticity, elegance, refinement and excellent cuisine (famous chefs) are all elements of a luxury experience.

Airline services taking off in all directions

The inconveniences of air travel (crowded airports, restrictive security measures, waiting times, deteriorating service, delays, etc.) discourage most passengers. To avoid these problems, to make every minute count, and to enjoy point-to-point travel with no transfers, many wealthy travellers are turning to various alternatives.

Air taxi services are becoming more common (e.g. Boston-Newark), offering competitive fares and reducing the delays associated with traditional airlines. A helicopter service (US Helicopter) now takes passengers between downtown Manhattan and Kennedy Airport in only eight minutes for US$160.

Rental, charter, co-ownership and ownership of jets are just some of the other options explored by wealthy customers. Growing demand has made the process easier and chartering a jet is becoming as easy as renting a car. The very latest service innovation is the membership card (which requires a large deposit) that enables the holder to subscribe for prepaid charter time at a lower hourly rate.

The new A380 airplane is redefining the notion of luxury service. Its interior can be configured to offer a bar, office, casino, gym, lounge, private sleeping area, open area so passengers can stretch their legs and, the height of luxury, showers! However, water for showers remains problematic because of the weight.

If you are in the business of luxury, it’s got to be real!

In this market segment, the « best » is standard. Although high prices remain a given, they are not the only mark of a luxury product. A number of words contribute to the perception of value: exclusivity, reputation, brand integrity, experience. The « take-care-of-me » attitude of this clientele, the desire for personalization and recognition of one’s standing all require flawless service and flexibility. Moreover, a personal butler for each guest is becoming the norm in the highest luxury bracket.

Although the luxury travel industry is booming, it is worth noting that the life cycle of a luxury product is relatively short and the concept of quality is no longer so narrowly defined. Company executives are feeling market pressure to create more diversified, authentic and unique experiences. Companies must constantly: refresh their products and embrace innovative concepts; update their products to keep them timely, modern and current; adapt products for every customer so that clients enjoy a personalized experience; and recruit exceptional staff who can deliver on the experience.

However, there is an industry trend towards one-upmanship that should be avoided. Is it necessary to offer a choice of 18 different pillows in every room? Does bottled water have to be served by a sommelier? Should customers be able to select from among 12 different pens simply to sign a restaurant bill? If a company is known for impeccable quality, customers should have total trust in the brand.

As clients in this sector become increasingly demanding, customer relations management is key to building loyalty. For this reason, providers must emphasize service quality, attention to detail (like a hand-written note) and extend their efforts both before and after the customer’s stay.

Sources:
– HotelMarketing.com. « Survey: 2006 Consumer Trends in Affluence & Luxury, » June 23, 2006.
– Smith Travel Research. « Experts Discuss Future Of Luxury Travel, » June 26, 2006.
– Travel Weekly, special issue « 2006 Consumer Trends in Affluence & Luxury, June 14, 2006:
– Chipkin, Harvey. « Hotels Indulge the ‘Give Me More’ Generation. »
– Chipkin, Harvey. « Spa-centric Hotels Part of an Evolving Trend. »
– Gebhart, Fred. « Private Jet Travel Taking Off in All Directions. »
– McDonald, Michele. « Airbus’ A380 To Send Luxury Transport Soaring. »
– Weiner Escalera, Karen. « Luxury Travel Now… And What’s Next, » [Hotel-Online.com], October 2005.
– Weiner Escalera, Karen. « Luxury Travel Now And What’s Next for 2006, » [Hotel-Online.com], March 2006.
– Weiner Escalera, Karen. « Luxury Travel Now And What’s Next III, » Smith Travel Research, May 2006.

Catégories
etourism and technology Trends

You haven’t heard the last of Web 2.0!

As the number of web users keeps growing, so the internet keeps evolving. It now features much simplified, more flexible and lower‑cost technology that encourages interactivity. Thanks to broader applications, internet users are now truly benefiting from the web’s participatory philosophy, forming virtual communities in which they share information about personal experiences, interesting websites, photos, and so on. Blogs, RSS content feeds, travel journals, meta‑search engines and podcasting have all emerged in the constantly changing new‑generation internet. Welcome to the Web 2.0 era!

The first generation has come and gone

Why is e-tourism evolving so rapidly? It’s important to first understand how e-tourism came about. Initially, it arose as an alternative to the traditional « off-line » reservation methods, and had just one motivation: find the best price. The consumer gained great transparency on prices and fares; this was the era that the firm PhoCusWright today calls « Travel 1.0. »

How Web 2.0 is taking shape will inevitably change the rules of the game for the travel industry. Consumers and businesses alike can now turn to ergonomic and useful solutions of all types that clearly alter the way people surf the web and change the travel-product sales approach. If the Web 2.0 phenomenon were to be described in one simple statement, it would be: « It is how internet users have taken control of the web. »

Now that we’re nearing the point where 50% of American internet users reserve their trips online, consumers’ increasingly intuitive use of innumerable applications enables them to play an active role. There are countless tools to assist tourists as they seek to find, or design, not just the cheapest trip, but the perfect trip.

Another aspect of Web 2.0 involves a rejection of traditional marketing channels as a source of persuasion. The internet user has become difficult to influence with classic advertising strategies, preferring to look for more neutral information sources, such as word-of-mouth recommendations or online forums.

As an example, Carnival added a section to its website called Carnival Connections that invites customers to use a discussion platform to plan a cruise (see photo). Carnival Connections offers forums (private or open to all) that let site visitors organize a cruise in detail, alone or through interacting with other visitors. It also features a journal of comments from past cruisers about their experiences.

What is social networking?

While Web 2.0 is still an incredibly abstract concept for most consumers and companies, 2006 is expected to be the turning point at which consumers and tourism organizations will begin to integrate social networking – a gathering place (virtual in this case, as it’s online) where relationships are formed among a great number of people with the aim of discussing a given subject.

First and foremost, social networking sites let internet users communicate with each other in an extremely efficient way, thanks to applications that enable them to locate specific interest groups. For instance, a birdwatcher can now easily share his passion with other birdwatchers through exchanging information, sharing photos, forming travel groups, etc. – in short, anything related to the interest they have in common.

Catching on

The « Social internet » is spreading, with specialty sites like YouTube, MSN Spaces, Classmates.com, Myyearbook.com and so on mushrooming. The New York Times even went so far as to attribute the rebirth of Silicon Valley to the phenomenon. The most popular of these sites is MySpace, which has some 80 million members and is clearly a leader. It had more than 51 million unique visitors this past May (30% of the total number of American internet users) and is poised to become, by autumn, the single most-visited website of all. People go to Myspace mainly to swap info about destinations, talk about their latest trip, post their photos, plan a journey with friends, meet like-minded people, etc. According to PhoCusWright, about 10% of e-tourists who buy travel online have already joined such virtual communities in order to get guidance while planning trips.

Multiple Web 2.0 developments

RSS Content Feeds
One word kept coming up at recent conferences on e-tourism: « involvement. » Simplified applications and intuitive user interface allow consumers to play an active role and let businesses know what they want. The best example are the RSS (Really Simple Syndication) content feeds that allow internet users to receive streaming information right in their computers, instead of having to do internet searches. The user employs these applications (feeds) to select particular topics of interest or websites from which he/she wants to obtain the latest information. Once the parameters are defined via a personal profile, the feeds become an alert tool and web content transmission mechanism tailored to the internet user’s needs.

As an example, online agencies like Expedia and Orbitz offer customers the opportunity to automatically receive all new promotions as soon as they’re posted on the site. Another example of the application would be a sports-news fan who receives from Cyberpresse all articles published in the sports section of the site.

Corporate Blogs
Meanwhile, more and more companies are offering feedback forums for customers. Many corporate blogs are set up with the aim of getting more direct feedback from customers, of soliciting their participation and getting their comments. Designated as a community space for the consumer, the revamped Sheraton website is a good example. Visitors are encouraged to share stories, advice and photos relating to their top travel discoveries, favourite destinations, etc. Sheraton management says the portal is a reflection of how people now research and buy their trips. In a context where businesses seek to show as much transparency as possible, such discussion areas help achieve this goal.

Wikis
Among many other concrete examples of what Web 2.0 has given rise to, the travel « Wikis » are worth mentioning. These are collaborative websites where any internet user can easily participate in authoring the content. The pioneering and most popular of these sites, TripAdvisor, has positioned itself as an encyclopaedia of travel destinations built upon the reviews of real travellers. The collection of all these personal tourist experiences is a powerful tool of influence on traveller decision-making and is enormously popular because of its completely neutral and transparent nature.

Implications for businesses

Now the big question is: what should we do to prepare for the coming Web 2.0 era?

Personalization of online content and community spaces provide whole new marketing opportunities for businesses wanting to target a very precise customer profile. These « involved » internet users, if properly approached, if solicited in the right place with offers pertinent to their profile, are liable to react very positively to product offers.

As most community sites include search applications in the form of a search engine or tags (key words related to content), it is easy to buy advertising space associated with categories that are innately compatible. For instance, many different groups gather and discuss travel-related topics at Myspace.com. In the illustrated example, you can see to the right of the page an advertising banner containing sponsored links related to this theme.

MySpace.com

Note that Myspace.com offers participants the option of identifying the information and products that interest them; for tourism companies, this is a crucial component of social networking. Every traveller who uploads a holiday itinerary identified with a keyword (tag) or a personal photo from a trip, or designates a favourite page, is giving managers very pertinent information about his/her personal interests and tourist behaviour.

You may not be familiar with these new players, but some of them are already among the most-visited sites on the web. Experiments on how to best utilize Web 2.0 from a marketing standpoint are only at the embryonic stage. Managers still have much to learn in terms of optimizing the use of these new technologies and the potential interactions with customers. It is perhaps too soon to overhaul your marketing strategies, but you would certainly be well-advised to adopt an open mind in order to properly anticipate the way Web 2.0 will influence how you do business and how to get the most out of it.

Sources:
– Aho Williamson, Debra. « The Social Net Catches More and More, » eMarketer [www.emarketer.com], June 26, 2006.
– Bray, John. « Web 2.0 Begins to Sprout in Travel, » PhoCusWright, April 19, 2006.
– Bray, John, Cathy Schetzina and Susan Steinbrink. « Six Travel Technology Trends for 2006, » PhoCusWright, February 2006.
– ehotelier. « ‘Social Computing’ and Enhanced Rich Content to Shape Future of Hotel Electronic Distribution, » 2006 HEDNA Conference [www.hedna.org], June 5, 2006.
– eyefortravel. « Online Branding Has Proven To Enhance Brand Awareness and Search Performance, » TDS Europe 2006 Special [www.eyefortravel.com], June 6, 2006.
– Lamarche, Simon. « Influencez en utilisant les communautés, » Adviso Consulting [www.adviso.ca], June 14, 2006.
– Poudrier, Sophie. « Le Web 2.0, les entreprises emboîtent le pas, » Bulletin SISTECH, CEFRIO (Centre francophone d’informatisation des organisations) [www.cefrio.qc.ca], June 2006.
– Ri, F. « internet 2.0, un nouvel eldorado? » Libération [www.liberation.fr], March 24, 2006.
– Schetzina, Cathy and Bob Offutt. « Social Technology Ushers in New Era of web, » PhoCusWright, April 2006.
– Wolf, Philip C. « Travel 2.0 Confronts the Establishment, » PhoCusWright, June 2006.

Catégories
etourism and technology Management

Price customization: bold… or deceptive?

Is it farfetched to believe that an online shopper’s browsing history could affect a travel site’s search results? It most certainly is not. Although the internet gives consumers a powerful tool for easy price comparisons, the downside is that it also enables retailers to collect detailed information about online shoppers’ spending habits. Thanks to the internet, businesses can now use a myriad of new approaches to efficiently adjust their pricing to increase profit margins.

Warning, you’re being tracked!

Thanks to browser technology, businesses now have the ability to store profiles of their customers’ buying habits, preferences, financial resources, and so on. Some companies judiciously use this type of strategic information to adjust their pricing according to a user’s profile.

According to Charles Leocha, a journalist for MSNBC.com, online travel agencies like Expedia use sophisticated software and browser cookies to analyze customers’ previous transactions. This means a consumer’s search results can vary according to the profile recorded. For example, if a particular consumer is shown more higher-priced fares – or fewer discounted fares – it could be because the system has identified him or her as a « good customer » who is more likely to purchase higher-priced items. In fact, this is a subtle way of preventing certain types of consumers from purchasing lower-priced items. It’s a little like banning well-heeled shoppers from dollar stores!

A concrete example

Although this type of marketing practice may seem like a paranoid example of Big Brother at work, it is nonetheless closer to the truth than to fiction. Online travel agencies may insist that such biases don’t exist, but our experience shows otherwise.

To test the truth of this hypothesis, we conducted a test with members of the Tourism Intelligence Network team. We ran a simple search on the Canadian Expedia site for a plane ticket from Montreal’s Dorval Airport to Paris’ Charles de Gaulle Airport, departing January 8, 2006, and returning a week later on the 15. However, our three searches, conducted simultaneously on three different workstations, produced three different results (see illustrations).

Profile 1

In the case of Profile 1, the lowest price offered was $800 for a connecting flight or one with 2 stops or more, with no direct flight option. As for Profile 2, the lowest price displayed was once again $800, but this time, we were offered a non-stop flight for $978. Finally, Profile 3 was offered a flight for the somewhat surprising price of $699, in other words, $101 less than the other two! And yet, it was the very same US Airways itinerary, with exactly the same departure times.

Profile 2

 

Profile 3

Read the fine print

Expedia’s policy with regard to using information collected from customers is as follows:

«Expedia.com collects certain technical information from your computer each time you request a page during a visit to Expedia.com. This information is collected from your computer’s Web browser to enhance your experience on our site…»

Few consumers are aware that retailers are able to manipulate online shoppers’ personal information to conduct what some experts call « psychological marketing. » The Annenberg Center at the University of Pennsylvania examined this phenomenon in a study entitled Open for Exploitation, released in June 2005.

The study’s results demonstrated the naiveté of US online consumers, 68% of whom believe price comparison sites like Expedia and Orbitz are required by law to display the lowest available price. Furthermore, 87% of the people surveyed said they strongly object to online retailers offering different prices for the same product, depending on the information gathered on customers’ shopping habits.

Somewhat questionable, but still legal. Use with care.

Price customization is therefore a very real practice and, contrary to popular opinion, it is entirely legal. As long as discrimination is not based on factors like race, religion, nationality or gender, there is no problem. Such approaches have been around for a long time, like discounts for students and seniors, for example.

This type of strategy is a legitimate business tool because it follows the trend of yield management and companies must satisfy the needs of shareholders. Although businesses that offer a flat price at all times may satisfy their clientele, they will definitely deprive themselves of a higher profit potential.

There’s nothing new about dynamic pricing. The major difference stems from the fact that the internet offers businesses a number of new ways to efficiently adjust their pricing. Since consumers are still not very aware of the incidence of price customization, businesses employing this strategy must be very careful not to cause dissatisfaction and erode customer loyalty.

The internet unquestionably offers businesses an opportunity to acquire highly relevant and strategic information about their customers and thereby target different market segments with different prices for the same product. Technical tools enable retailers to study not only the purchasing behaviour of online shoppers, but also their non-purchasing behaviour, in other words, their information searches.

In today’s context where the internet plays an increasingly important distribution role in relation to global distribution systems (GDS), more and more travel agencies are going online to find prices. This raises another question: what happens when travel agents consult the internet on behalf of their clientele? Could such agents be penalized due to their frequent use of sites that employ dynamic pricing?

Tourism-based businesses with the technological ability to do so must ask themselves a key question: is it profitable to take advantage of our clientele’s electronic profiles to implement dynamic pricing?

A double-edged sword

Retailers trying to determine their web strategies in relation to dynamic pricing must define these strategies with great care. For example, is it better to offer lower prices to customers who visit the site frequently, but rarely buy, or to those who are loyal and rarely shop elsewhere? It is a difficult question because, in fact, a business could decide to offer higher prices to loyal return customers, gambling that their loyalty will blind them somewhat and make them unlikely to shop elsewhere. Or the same business could just as easily adopt the opposite strategy, in other words, reward loyal customers by offering them the lowest prices possible.

The stakes are high because bad decisions could cause a business to lose many customers. On the other hand, automatically rejecting any type of dynamic pricing is also a way to miss out on some lucrative profits that would be difficult to make in other ways. To make an informed choice, retailers must look at all the parameters that could help guide them. In particular, they should not only consider the frequency of a customer’s site visits, but also the time of year, the type of products purchased, the profit margin on previous transactions, etc.

Possible backlash

Since the practice of dynamic pricing is in its infancy, businesses can still take advantage of the fact most consumers know nothing about it. However, in the longer term, organizations that rely too heavily on this approach could well pay the price.

One possible risk is an increase in the number of intermediaries created to fight back against businesses « guilty »of too much greed. Although the goal of such initiatives would be to denounce abusive practices, they could also, for example, rank travel websites according to their level of « honesty » and try to protect customers – or even steer them away – from businesses seen as too manipulative.

Although it is difficult to accurately assess the extent to which dynamic pricing is used in Quebec, we can safely assume that few organizations have adopted it as yet. Although companies are technically capable of amassing a ton of information about their online customers, very few do so in order to analyze it, while others simply do not have the resources needed to efficiently collect this type of information.

Managers will definitely have to weigh the pros and cons before blindly adopting dynamic pricing. However, there is an amazing wealth of strategic information that can be gleaned by analyzing online clicking behaviour. Without going so far as to customize pricing, businesses could benefit – at the very least – from learning more about their site visitors, whether they buy anything or not.

Sources:
– Elliott, Christopher. « A Low-Fare Browser? », National Geographic Traveler, July-August 2005.
– Feldman, Lauren, Joseph Turow and Kimberly Meltzer. « Open to Exploitation: American Shoppers Online and Offline », Annenberg Public Policy Center of the University of Pennsylvania, June 2005.
– Knowledge@Wharton. « What Consumers – and Retailers Should Know about Dynamic Pricing », Hotel News Resource [www.hotelnewsresource.com], December 2, 2005.
– Kontzer, Tony. « Online Shoppers Growing Wary Of Sharing Data », InformationWeek, August 15, 2005.
– Ramasastry, Anita. « Web Sites Change Prices Based on Customers’ Habits », CNN [www.cnn.com], June 24, 2005.
– Ramasastry, Anita. « Websites That Charge Different Customers Different Prices: Is Their ‘Price Customization’ Illegal? Should It Be? », FinLaw, June 20, 2005.