|
By Madigan
Pratt
Without question, 2001 will
be remembered as the worst year in the modern day history of the travel
and tourism industry.
In March the economy officially entered into recession. A weak economy
coupled with the terrorist attacks on the World Trade Center and Pentagon
and the anthrax issue effectively placed most of the travel industry
into a depression.
The negative impact that these events had on travel and tourism has
been chronicled in every conceivable media (much to the detriment of
the industry). Voluminous, and oftentimes-conflicting research, sampling
every conceivable market segment has been fielded and published. Numerous
industry forums were convened to help travel marketers devise strategies
to cope and move forward.
An Industry Ill Prepared
The sorry truth is that far too many travel companies were ill prepared
to effectively deal with and overcome the events of the latter half
of 2001.
With shrinking revenue few companies could afford to increase advertising
to increase share-of-voice in an attempt to win back wary travelers.
As a consequence, the most common tactic used was discounting rates
– sometimes to absurdly low levels – all in an attempt to
entice consumers to become travelers again. Trade and consumer press
splashed headlines about all the travel “deals” flooding the
market. Still many airline seats, hotel rooms and cruise berths went
begging.
And what message did the consumer at large receive? Were these great
deals or confirmation of previous suspicions that travel costs had previously
been over-inflated? Has it turned normally full-price travelers into
bargain hunters? Now many marketers are concerned it may take years
to get rates back up to a level that will allow for a decent return
on their investment.
Not Everyone Suffered Equally
The media, as it so often
does, has focused most of its attention on the hardest hit sectors and
companies. As a result, the perception may be that every company is
down 20% to 50% and will not recover until late 2002 or 2003 if they
happen to be in business.
The reality is there are
numerous companies that, although being affected, have done remarkably
well relative to their competitors. Their sales decline has been mild
as opposed to precipitous and their recovery has already been realized
or is forecast to arrive shortly.
5 Traits of Successful
Marketers
The Reefs in Bermuda and
Nisbet Plantation Beach Club in Nevis, two resorts we work with, have
weathered events of 2001 better than most. They consistently rank either
one or two in terms of occupancy level of all hotels in their respective
countries. Yet their success is not a matter of rocket science. Instead,
it’s more a case of consistent attention to marketing basics, use
of new technologies and effective integration.
Here are five marketing principles
the resorts and other successful travel marketers follow:
1. Provide a Consistently
High Quality Product at a Fair and Reasonable Price.
Sounds simple enough. As
these two luxury resorts have delivered on this principle year after
year they have developed well-deserved reputations for providing exceptional
value.
They have consistently won
many of the industry’s most coveted awards for service, quality
and culinary excellence and in 2001 both were named to Travel &
Leisure Magazine’s list of the Top Ten Best
Values in the Caribbean, Bahamas and Atlantic.
Today, more than ever before
consumers are looking for good value. Unless you provide it and become
known for doing so you will always be at a competitive disadvantage.
2. Create a Dialogue With
Customers and Prospects on a 1-to-1 Basis
In 1999 The Reefs and Nisbet
Plantation decided to refocus marketing to take advantage of growing
opportunities of integrated 1-to-1 marketing. At the same time, they
planned to move from primarily analog marketing to a more effective
and economical digital program.
At the heart of this effort
was the integration of three components – database, web and permission
based email.
• A new database of
customers, prospects and travel agents with email addresses was developed
along with programs to continuously populate it with new information.
This is the heart of the program and all marketing efforts were re-purposed
to feed the database as shown in the accompanying chart.
With an unswerving devotion
to building the database, these two small resorts now have more names
and permission based email addresses than many Caribbean counties.
• The web serves as
a focal point of up-to-date information about the properties as well
as an interactive resource to get and keep people interested in learning
more about the resorts.
• Permission based email,
the third component of the integrated 1-to-1 marketing model, allows
the resorts to economically reach prime customers and influencers on
a regular basis and drive them to the web for more information.
With word-of-mouth still
the most effective form of travel marketing, regular email messages
ensures the resorts will always be top-of-mind when the topic of vacations
comes up in conversations readers have with their friends and relatives.
(Samples of the email newsletter the resorts send to individuals on
their database can be found at http://www.thereefs.com/reefs/ newsletters.html)
The resorts have identified
their customers and prospects. They have segmented them to understand
their best customers and know where to find more people who look just
like them. They have personalized messages and are in the process of
customizing communications around each individual’s specific interests.
In the process they have
begun to create a dialog, deepen customer and prospect relationships
and create faithful customers – the most profitable customers of
all. They have also started moving down the road towards effective customer
relationship management (CRM).
3. Stay Ahead of the Curve
Many travel companies avoid
being marketing pioneers, choosing instead to watch others forge ahead,
make mistakes and perhaps lose money in the process. At least that’s
the rationale for being a laggard.
While this may have been
an acceptable approach is the golden years of mass marketing, it is
no longer valid in today’s fast paced digital world. While marketing
pioneers may be making mistakes, they are also creating institutional
learning – lessons that will help distance them from more cautious
competitors in the years ahead.
Earlier I mentioned that
The Reefs and Nisbet decided in 1999 to use email to reach and market
to consumers and agents. This was before Seth Godin wrote his now famous
treatise on Permission Email and before cost effective ASP’s for
delivering and monitoring such program were available.
Clearly the resorts had made the decision to stay ahead of the curve.
They built an extensive database of email names, know who they are talking
to and have over two years of program management experience at a time
when many resorts are only beginning such efforts.
4. Take a Longer-Term
View of Marketing
Instant gratification is
often sought but rarely realized in marketing. A disproportionate emphasis
on immediate sales without sufficient focus on how to attract business
down the road can be disastrous.
The decision to transition
from a mass marketing to an integrated 1-to-1 marketing approach was
based on the belief that the way marketing would be conducted in the
years ahead would be dramatically different than it was in 1999. And
it is.
By planning ahead the resorts
were able to efficiently and immediately deliver tens of thousands of
personal, thoughtful and appropriate messages to customers, prospects
and travel agents in the wake of the tragedies of 9/11. They weren’t
delivering advertising per se, but a continuation of a dialog that started
years before. (Read the September Newsletter which created the highest
response from readers – every single one being positive.)
While many travel marketers
were scrambling to devise communications programs in response to 9/11,
The Reefs and Nisbet were busy tailoring their conversation with consumers.
5. Don’t Chase Every
Customer and Don’t Compete on Price
All customers are equal,
but some are more equal than others. The customers you want are the
most profitable ones. So develop programs to attract them and leave
those that are a drain on resources for your competition.
There are several ways to
attract more profitable customers. Use your database and identify your
best customers based on spending, number and length of time between
repeat purchases or however you want to define “best customer”.
Create a profile and a statistical model to find people who most resemble
your best customers and market almost exclusively to them.
Your most aggressive competitors
are probably doing this in an effort to steal your best customers away
from you – permanently!
Beyond database modeling
there are other things you can do to attract more profitable customers.
First and foremost is to avoid competing on price.
While many resorts chose
to stimulate business by offering steep discounts, The Reefs and Nisbet
Plantation decided instead to create new value-added packages. None
were much different than any other packages they offer throughout the
year.
In the end they did turn
away some business – refusing to discount when callers to reservations
wanted to know what “the real price” was. Callers were politely
informed that the resorts were not discounting or cutting back on their
service and therefore really couldn’t discount their price –
and after all, they were already proclaimed the “World’s Best
Value” by Travel and Leisure. While some business was lost, a far
greater amount was booked at regular rates.
In reality, people interested
in a cheap room as opposed to a quality vacation experience are not
the type of customers the resorts are looking to cultivate. Price conscious
travelers will never be faithful customers, and will most likely cost
more than they produce and are best left to the competition.
The vast majority of people,
especially travel marketers are pleased to have 2001 behind us. While
it is hard to imagine there could be anything worse, the sad truth is
that natural and man-made disasters are always a real and present danger
so it’s imperative to be prepared.
Simply having a variety of
1-to-1 marketing components such as a database or web site within your
marketing mix is not enough to make you a successful marketer. All the
components must be integrated in such a way as to create a 1-to-1 relationship
with customers and prospects. To do this effectively will require marketing
as well as organizational change. 
|
