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The Nuts and Bolts of becoming Consumer Centric

Marketing responsibilities imply the identification of goals, objectives and measurable results. Traditionally, the range of tactics employed was relatively standardized. Essentially, this involved making advertising, promotion, and media buys in target markets using newspaper, magazine, radio or TV ads.

Then, along came some alternative channels, in the form of film spots in movies and through many other emerging non?traditional partnerships. Today, the marketer must possess a much broader skill set, including strong analytical capabilities.

But the exponential growth of the internet has made all the difference, and even the role of manager of communications is changing somewhat. From staging publicity events or working with writers and travel media, these craftsmen and craftswomen of well?targeted messages must now operate in a world where the communications outlets used by travel industry have all exploded into fresh, complex and often new incarnations. The travel writers are on the internet, blogging.

All industry players are seeing the advantages of leveraging technology for their needs, and they try relentlessly to harvest the benefits. Advertising and e?marketing are not simply about putting banner ads on websites vs. using traditional media. (That would simply amount to shifting the billboards to where the consumers are.) The “Web 2.0” phenomenon is changing the way the marketers operate in technology?driven environments. “Web 2.0” is the expression used to describe the second?generation of internet?based services which let people collaborate and share information online in previously unavailable ways.

There are a few pieces that are especially important for the next generation of marketing managers to monitor, and they are all related to the need to define consumer groups through segmentation. At the CTC we will use the “Explorer Quotient” (EQ) model, which bridges the transition from a product or channel?focused approach to a customer?centric model. For this transition to be successful, we need to make smart use of customer analytics and take stock of the needs of different consumers.

Web 2.0 may be a difficult?to?define buzzword at the moment, but it opens the way to making use of applications like “mashups” (the internet equivalent of a sandwich, bundling different applications together). In a “mashup” you will find hotel booking engines with reviews, maps and webcams, all in one place; Web 2.0 transforms the internet from a one?way communication channel to a two?way communication resource where the consumer suddenly is in control.

Prior to Web 2.0, the customer would go onto a hotel or destination website to get information or download a brochure. You would perhaps then go to a website like Tripadvisor.com to look at what other people experienced at the establishment of interest – how was the room and the service? Then you might post your own review on that website. (The growth of Wikipedia is just another example of how people collaborate in generating and editing Web content to create the world’s largest multi?language encyclopaedia.)

Once you are aware of the opportunities offered by the Web, customer?centric metrics allow enterprises to produce websites that act as virtual focus groups. We can turn the metrics into intelligence. Customer streams, traffic, hits, visitor numbers, and search words and phrases can reveal invaluable information about what customers want through analysis and the identification of the metrics most relevant to the organization. Only then can you become truly customer?focused. It really starts with tracking the customer value and estimating where different value propositions are, and knowing which customers are most valuable to the enterprise or the organization. We will then be able to allocate the resources to those customers – it is like going for the high?yield traveller.

So how does one deliberately make the transition? First, stay on top of the trends. (There are still organizations out there that are scared of the internet and don’t want to have anything to do with it.) But in the end, 82 % of US travellers use the internet either to research or purchase online, so that is where the consumers are. I talk to people who say “we won’t get into user?generated content and blogs because what happens if they say something bad about us?” They are going to do it anyhow. They will write it somewhere else. That’s like talking behind your back – why not engage in a conversation with the customer, build a relationship, be aware of issues, and correct them. Stay current with the trends – not so much internet trends but consumer trends.

Look at mobile

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marketing (which is really marketing over wireless channels, using tools like cell phones). If we are hoping to attract people from Europe and Asia, it is well worth considering this media because – for example – Japanese consumers don’t really use credit cards, but use payment systems over cell phones. You need to be aware of how your consumer is consuming media and how he or she is purchasing and researching travel. A consumer?centric organization would then develop a strategy that is not only aligned with your corporate objectives, but one that also focuses on return on investment (ROI).

Central to all this is engaging the support of your organization’s leadership. The support needs to be there at the chief executive office and senior management committee levels. This may be more easily achieved if you balance the short and long?term goals of your Web initiatives. The cornerstone for a customer?centric marketing strategy is primarily the understanding that the consumer is leveraging technology to research and buy travel and live a more exciting and convenient life, BUT that the execution of the strategy has very little to with technology but with marketing itself. Tomorrow’s (and probably today’s) travel and tourism marketer understands technology, and focuses on the following priorities:

  • Define Customer Groups: In transitioning from a product or channel focus to a customer?centric model, organizations should focus employees on customer group personas. This approach requires the smart use of customer analytics to gain insights into the different needs of different customers.
  • Build C?Suite Partnerships: The marketer must write a new contract with the CEO that establishes marketing’s new role, focusing on the management of the customer experience across all channels.
  • Use Customer?Centric Metrics: While each marketer needs to decide which metrics are most relevant to his organization, a truly customer?focused firm will employ measurements that are straightforwardly customer?centric, and they start with estimating and tracking customer value. Knowing which customers are most valuable to the enterprise will enable a firm to allocate resources to those customers that will yield higher returns.
  • Balance Short? and Long?Term Goals: A marketer should aim for some quick, measurable wins early in his tenure. This helps build the marketer’s credibility, a critical factor in winning support for longer?term projects. But the key is to build a solid foundation for long?term success rather than executing short?term siloed projects. It is like sending out email campaigns without using an email engine that measures open rates, respects the privacy of the consumer and has automated opt?in and opt?out permission marketing features, etc. in order to build a long?term relationship and not ruin the relationship with a blind email promotion.

At the CTC, we have been in the process of launching a new brand. As we go to the industry we might hear: “You know, this is all great, but I need to fill my hotel rooms today. I need to bring people into my town today. I can’t wait two years.” This is a valid concern that must be recognized. These people are running businesses and feeding their families and paying their employees, so they are not going to tell you, “I don’t need to eat for the next two years because we are launching a brand.” However, building the foundation of the promise to consumers is vital for the long?term success of Canada as a destination, and especially for the smaller businesses. The Canada: Keep Exploring brand will be that important cornerstone, and only when the entire industry embraces it – online and offline – will it strengthen Canada’s competitive position and its ability to break through the global clutter of tourism messages.

After 9/11, many companies started slashing prices and putting their inventory on web sites like Hotels.com, Travelocity, Expedia and other online intermediaries. But what happened was these intermediaries got a lot more traction because the hotels put their inventories on those sites, paying as much as a 30% in margins in

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the process (and remember that travel agents get only a 10% commission, so they

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got three times as much). These intermediaries invested in advertising, with convincing results. Price slashing on those sites became so common that the hotels themselves suffered. When I was at Fairmont Hotels & Resorts, we fought that because of the impact on our brand. Many hotels really put their brand in jeopardy, especially luxury hotels when they suddenly appeared on discount web sites. This is but one example of how one must balance short?term and long?term goals.

The bottom line is you have to be consumer?centric and then you win. In the end it is about delivering value to consumers. Look at it from a tourism standpoint: if you were considering a vacation 20 or 30 years ago, a friend or parent might inspire your choice of a destination. You would have gone to your travel agent, who would book your flight, your hotel and everything for you. Then, perhaps, you would write a little journal about your trip, or at least come back and tell your friends – possibly inspiring someone else to go to that destination. It was a very simple process.

What happens now is that this process is very fragmented and it is all online. You go to Concierge.com, Travel and Leisure, Travel Channel, NationalGeographic.com to get inspired about a destination. You visit the destination site and get the information. The next step is researching and planning your itinerary. Sites like Fodor’s, Frommer’s, Yahoo, or Lonely Planet can help you, and you might consult user?generated content sites like TripAdvisor or IgoUgo.com to get the information you need and become comfortable about your choice of destination.

The next thing you do is shop and compare. You go to Travelzoo, SmarterLiving, or to one of those metasearch sites like Yahoo’s FareChase, Kayak, Mobissimo, Farecast, Farecompare, Bookingbuddy, Bezurk, or Fare.net, and you get the lowest price. Then, you book the trip on Orbitz, Expedia, Travelocity, iTravel2000, or wherever, and you go on your holiday.

Before, you might have kept that journal, but now you can post your thoughts on Realtravel, Virtualtourist, Lonelyplanet, Travelpost, Yahoo, Tripadvisor or IgoUgo just to name a few of these established community sites. And then there are all the new Travel 2.0 websites, like Travelisitic, Farecast, Tagzania, Gusto, Triporama, Travbuddy, Flickr, Boardingate, Triphub, TripConnect and many many more. This editorial content becomes accessible to hundreds of thousands of people, and you can go back and add a hotel review after your trip as well.

Enabled by blogs, podcasts and social networking sites as well as other web 2.0 technology introductions, the consumer today can be as informed – about anything – as never before in history. Even more importantly, that consumer has an easy way to communicate his or her knowledge and expertise on any subject to millions of people in the world – instead of just talking about travel experiences to friends and family. In terms of the travel industry, everyone can become a travel agent or tour operator, or even destination marketer (at least in his or her own mind!) In the future, companies and organizations will increasingly have to try to interject themselves into all the conversations about their products, services, or destinations that are going on among customers in the marketplace, rather than dominating what was – in the past – very often a one way communication.

At the CTC we don’t – and won’t – have a booking engine on our website; it’s not aligned to our mandate of inspiring people to visit Canada and connecting consumers with industry. But we are planning to create a tourism marketplace, a directory and merchandising tool which will act like a broker between the consumer and the supplier to really direct the traveller to the right travel supplier. If we don’t offer experiences and compelling content, and if we don’t interact with customers and let customers interact with themselves, we are not relevant. If we are not relevant, we are not consumer?centric.

And if we are not consumer?centric nobody is going to use us, and if that happens we are basically out of business.

Article written for Canadian Tourism Commission’s Tourism Magazine – November 2006

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