The importance of cross selling and retention for Tour operators

People say about tour operators that they are old fashioned and unnecessary. But is this the case or are tour operators still profitable. Cross selling is a way of getting the customers attention and trying to sell an extra, additional or other kind of product. In terms of a tour operator this could be an extra service such as a transfer from the airport to the hotel or cruise ship, or a whole new extension in terms of a different city or experience. Retention methods are used to create returning customers for the specific operation.

Cross selling can be used as a method to make customers more involved in your business and by doing this, customers can climb up the customer engagement pyramid. Once a customer climbs up the pyramid, he or she becomes more valuable for the organization. This indicates a better profitability per customer (Peelen & Beltman, 2013). As mentioned before, a tour operator can cross sell on many different levels in the industry and with different kinds of customers as well. E.g. for customers who book a trip through the highlights of China with cities as Beijing, Xian and Shanghai, a tour operator can try to cross sell Hong Kong as well. This is a city that is not included in the main trip of these customers, and is an interesting place with a lot of history and shopping facilities. When customers are flying through Dubai for their trip to China, a cross selling opportunity is to try and sell Dubai as a destination as customers have to transfer anyway and now have an opportunity to stay in Dubai (Wendy Wu Tours, 2015) (Hays Faraway, 2015).

Schermafbeelding 2015-10-04 om 15.53.18
Cross selling and upselling

Source: Screenshot taken from: (Wendy Wu Tours, 2015)

Upselling can happen when tour operators try to sell additional nights in a certain destination, try to get the customers in a more expensive hotel or get them to do a business class upgrade on their flights (Wendy Wu Tours, 2015) (Hoetmer, 2008) (Peelen & Beltman, 2013). Majority of the tour operators is already using these techniques, as they know how important it is to keep your customers loyal and to make the most profit from them while they are loyal. The reason for any business to keep clients loyal is because the organization has all the details about the clients in their system already. As well as their previous purchases and the preferences of the specific customer. Because of this, businesses can anticipate on the customers’ needs and wants easier and they can target them with the right advertisement, which cuts the marketing costs (Peelen & Beltman, 2013).

Another form of retention is a loyalty program where customers are inclined to stay with a specific company and receive a reward in return (Donald, 2014). For the tour operator these loyalty programs can exist in the form of a returning customer discount or a recommendation discount. Also personal attention and customer service make the customer loyal such as sending a hamper when a customer isn’t completely satisfied (Wendy Wu Tours, 2015).

Cross selling, upselling and retention are vital keys for tour operators in order to survive in today’s world. Not only for the profitability of these techniques, but as well for the customer binding and the liking of the organization. These techniques as well show that tour operators are still in business and that they are not at all old fashioned.

Bibliography

Donald, M. (2014, October 21). Powering Loyalty with credit cards. Raconteur , 6-7.

Hays Faraway. (2015). China Holidays. Retrieved at October 03, 2015, from Haysfaraway: http://www.haysfaraway.co.uk/china-holidays

Hoetmer, M. (2008, November 25). Up- en cross selling: mag het een beetje meer zijn? Retrieved at October 03, 2015, from salesquest: http://www.salesquest.nl/printartikel.php?id=3124&s=17

Peelen, E., & Beltman, R. (2013). Customer Relationship Management. United Kingdom: Pearon Education Limited.

Wendy Wu Tours. (2015). Reviews. Retrieved at October 03, 2015, from Wendy Wu Tours: http://www.wendywutours.co.uk/reviews/

Wendy Wu Tours. (2015). Top China Tours. Retrieved at October 03, 2015, from Wendy Wu Tours: http://www.wendywutours.co.uk/china/tours/top-china-tours/

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3 thoughts on “The importance of cross selling and retention for Tour operators”

  1. Dear Rick,

    I appreciated reading your post on the tour operating industry. Your text is well structured and has a well-balanced relation of academic sources and your own observations.

    What might be a valuable addition could be to underline your pretty strong final observation (These techniques as well show that tour operators are still in business and that they are not at all old fashioned) with practical examples or a reference to a certain case studies.

    This would be beneficial to as well academics as practitioners since it would strongly underline your final assumption and observation.

    Niklas

    Like

    1. Dear Niklas,

      Thank you for reading my blog and I’m very glad with your comment.

      I will take a look at some practical examples which I can use for the blog.

      Rick

      Like

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