The use of consultative sales in the Tour Operator industry

A Tour Operator is part of consultative sales. Consultative sales is a method where the salesperson plays the role of a consultant by first assisting the customer in identifying his or her needs and then suggesting products that satisfy those needs. It is possible to substitute personal sales with this sales approach. In personal selling businesses try to sell a product by meeting face-to-face with the customer. The personal presentation, body language and personality is important to encourage the customer to buy the product.

Looking at the creation of added value in sales processes from DeVincentis and Rackham there are 5 stages: Need recognition, evaluate options, solution composition, purchasing, and implementation. We are going to take a closer look at these stages for the Tour Operator industry.

The first stage is need recognition, Tour Operators can add value in the early stages of the sales process by defining appropriate solutions that meet customer requirements. (Ed Peelen & Rob Beltman, 2015) For Tour Operators customer knowledge is important, by knowing the customer’s needs and wants the consulting itself becomes more valuable.

The second stage is evaluate options, Tour Operators can design and provide tailored solutions and inform customers about possibilities in markets. (Ed Peelen & Rob Beltman, 2015) Holiday packages can be tailored to meet the customer’s wants and needs through a consultative approach. A Tour Operator has many options to tailor a holiday which makes it easier to differentiate products and services from competitors by adding value. A before manufactured holiday may fit, but a custom-tailored holiday is fitting better.

The third stage is solution composition, Tour Operators can provide customers with advice and alleviate worries. (Ed Peelen & Rob Beltman, 2015) Most Tour Operators provide extra services like insurances, brochures, travel tips etc. When looking at Tour Operator TUI for example, they have a special category called extra & services. In this category they discuss the topics comfort, service, insurances, travel related products, seat reservation and brochures. These extra services make it easier for the customers and help customers to be prepared for their holiday.

The fourth stage is purchases, Tour Operators can check up on purchasing configuration and maybe consult on matching products. (Ed Peelen & Rob Beltman, 2015) Nowadays more Tour Operators find that they have to compete on the basis of low base prices for the core services like flights, accommodation, attractions etc. Tour Operators find that higher profit margins can be attained once the customer is enjoying the service by selling additional products and services. Personal selling can be an interesting aspect for Tour Operators to improve up-selling or cross-selling. (Scott McCabe, 2012)

The fifth stage is implementation, Tour operations can consult on usage issues and solve problems. (Ed Peelen & Rob Beltman, 2015) The advantage of using a Tour Operator for your holiday is that you can always call them when there is a problem with your holiday package. Problems that are raised before you go on holiday, during your holiday or even after your holiday.

Tour Operators use the consultative sales technique in which personal selling is an important aspect. As can be seen in the different stages of the creation of added value in sales processes Tour Operators are a useful tool by booking a holiday that fits your wants and needs by providing tailor made packages, giving advice, problem solving etc.

Bibliography

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

Scott McCabe. (2012). Marketing Communications in Tourism and Hospitality. New york: Routledge

TUI. (2015). Retrieved from: http://www.tui.nl/

Tour Operators and the use of cluster analysis

The goal of cluster analysis is to classify subjects as customers in relatively homogeneous groups, or clusters. Each customer can be placed in only one group, and there is no overlap between the clusters. Good segmentation solutions are accessible, actionable, differentiable, measurable, and substantial. (Ed peelen & Rob Beltman, 2013)

Cluster analysis is used in market research which is beneficial for Tour Operators. It is used to divide customers into market segments and to better understand the relationships between different groups of customers. The goals of cluster analysis is to identify groups, before starting you don’t know who belongs in which group and often you don’t even know the number of groups. (Marija J. Norusis, 2009)

When performing a cluster analysis you start with you customer database and subdivide these into homogeneous groups. First you choose the segmentation variables for your clusters or groups. Next, you must decide whether to standardize the variables in some way so that they all contribute equally to the distance or similarity between customers. After you decide which cluster procedure is best to use. There are many cluster algorithms, you choose a clustering procedure based on the number of customers and types of variables you want to use for forming clusters. As well you can look at how many clusters you need to represent your data. You do this by looking at how similar clusters are when you create additional clusters or collapse existing ones. A commonly used clustering procedure is the K-means. In K-means clustering, you select the number of clusters you want. The algorithm iteratively estimates the cluster means and assigns each case to the cluster for which its distance to the cluster mean is the smallest. (Marija J. Norusis, 2009)

The K-means procedure is explained by using a Tour Operator as an example. When performing the K-means cluster analysis, first the number of groups will be distinguished. For this Tour Operator we use two clusters or segments. The first cluster is called group A and the second Group B. The Tour Operator chooses segmentation variables for the two groups. Next, a computer draws two observations when looking at the customer database. By Using the customer database, you may be able to form clusters of customers who have similar buying habits or demographics. Individual subjects are assigned to the group which is closest to them in terms of distance. After, the average scores for the segmentation criteria are calculated for the two groups. A new group classification is then formed on the basis of the cluster averages, and objects are allocated to the clusters for which the distance to the cluster average is the smallest. After finishing this cluster analysis, Tour Operators can divide their holiday offers between clusters and provide them with offers that are most receptive to them. By knowing these customer habits, you can for example send your customers and email with the most appealing holiday offers for them. After doing this you can also make a cluster analysis by looking at your customer’s response patterns. (Ed Peelen & Rob Beltman, 2013)

Overall we can conclude that the use of cluster analysis is an important tool for Tour Operators to determine customer segments and target them accordingly. A cluster analysis can provide a Tour Operator with valuable information to make the Tour Operator’s business more profitable by using their insights in different clusters.

Bibliography

Ed Peelen & Rob beltman. 2013. Customer Relationship Management. United Kingdom: Pearson Education Limited.

Marija J. Norusis, 2015. SPSS 16.0 Statistical Procedures Companion. Cluster Analysis. Retrieved from: http://www.norusis.com/pdf/SPC_v13.pdf

Figure: Chire, 2010. Different cluster analysis results on ”mouse” data set. Retrieved from: https://commons.wikimedia.org/wiki/File:ClusterAnalysis_Mouse.svg

Value Proposition of Tour Operators

A relationship policy can be developed for each of the customers segments to meet their needs. It specifies the value proposition in terms of customisation and pricing, and also deals with the way in which the company strives to communicate with the segment. A Tour Operator with an undifferentiated approach would miss out on most opportunities. (Ed Peelen & Rob Beltman, 2013)

A value proposition is a promise of value to be delivered. In other words it is the primary reason a prospect should buy from you. A value proposition determines whether people will bother reading more about your product or not. By researching certain markets, you can gain insights in how to best describe your offering and how this certain market benefits from it. In a value proposition you can usually find a headline, a sub-headline or a 2-3 sentence paragraph, bullet points and visuals. (Peep Laja, 2015)

The value proposition approach is illustrated by some examples Tour Operators. Travelta and Corendon offer holidays for different segments, like holidays for youngsters, families, elderly etc. Corendon even offers travels for only adults. Tour Operators can develop a value proposition that is attuned to the specific needs of each of these groups.

If we look at Tour Operator Corendon they have several headlines like: Last minutes, Wintersport, Kids & Co, Only Adult etc. As can be seen these headlines mention the product and often the segment. As well under each headline Corendon gives a short explanation of the offering. Under this short explanation there are some holiday offerings with visual images. If we click on these offerings, again there is a headline with a sub-headline beneath it. In the offer the bullet points with the list of key benefits and features can be seen with some visual images. Visual images are used to show the product and reinforce the main message. (Corendon, 2015).

If we look at Tour Operator Travelta also a value proposition can be seen. This website has as well several headlines with different kind of holidays. Only If we look at Travelta they have a more broad explanation of the offering and as well they have the bullet points with the key benefits or features of a certain holiday on the same page. Again visual images can be seen that are there to attract the different segments who are looking for a nice holiday experience. (Travelta, 2015).

Looking at the value of a customer, selectivity within each segment is required. Tour Operators research which type of customer is more profitably than the other and they will tend to direct their value proposition at the most profitable segments. The actual and potential customer life-time value can be used to decide whether more or less customers within a certain segment should be approached and whether to focus more on retention of one group than the other. This leads to decisions on whether or not promotions or extra attention is spent on certain customer groups. (Ed Peelen & Rob Beltman, 2013).

A value proposition can help by targeting certain markets and by doing so making more profit. In other words this approach helps maximizing opportunities.

Become each customer group’s ideal travel partner, by making their requirements a central component of the holiday experience. (Ed Peelen & Rob Beltman, 2013).

Bibliography

Ed Peelen & Rob beltman. 2013. Customer Relationship Management. United Kingdom: Pearson Education Limited.

Peep Laja. 2015. Useful Value Proposition Examples (and How to Create a Good One). Retrieved from:

http://conversionxl.com/value-proposition-examples-how-to-create/

Corendon. 2015. Retrieved from:

http://www.corendon.nl/

Travelta. 2015. Retrieved from:

http://www.travelta.nl/

Relationship Tour Operator and Family segment

Relationships imply some sort of intermittent interaction between two or more persons, involving interchanges over an extended period of time. For having a good relationship there must be a certain degree of continuity and relationships need to take place for a longer period of time.

There is a distinction in primary relationships and secondary relationships. (Peelen E & Beltman R, 2013) With big customers or with long-term orientated customers you can have a primary relationship, but with most customers Tour Operators will have a secondary relationship, there will be a limited degree of social interaction. Depending on commitment, trust and financial advantage there is the opportunity to continue a relationship. The relationship between a tour operator and customer is dependent on the network. Customers, who develop a relationship with an organisation, actually build a relationship with the people who represent the company. This concept is generalized by saying how the company represents itself.

How does a Tour Operator target a family? If we look at a family who usually makes contact with a Tour Operator from the family? What can be seen if we look at websites of Tour Operators is that a family holiday package usually is directed at the elderly of the family. Usually these are the parents, because they eventually make the ultimate decision. When planning a holiday many parents take the time to talk to the child about where they are going before the actual booking.Their kids have an influence on the holiday decision, but eventually the parents or one parent will make the definite decision. Although there is no proof, many think it is usually the women or mother of a family who makes a booking. When planning as a family you have to take into consideration that the kids enjoy themselves so a tour operator has to make sure there are enough family activities. As well as if you look on the internet and/or at articles on planning a family holiday, all is targeted at the parents.

If we take a look at the Tour Operator Thomas Cook they have a special category for family holidays. Thomas Cook has this text above the family holidays; ‘’Keep the children happy with a whole range of exciting activities, including FamilyWorld and KidsWorld entertainments, organised events, sports and much, much more. What’s more, on certain family holidays, Thomas Cook’s qualified childcare and family-friendly facilities are there to help you out.’’(Thomas Cook, 2015) What can be noticed is that the text is directed at the parents, but the activities are directed at the children. As well on all of the pictures of the holidays a happy family can be seen. When a family will look at this, they want to have a similar experience as the one that can be seen on the picture. They want to have a memorable holiday. If we look at the family holidays sector on the website of Tour Operator Thomson several aspects are similar. Above the family holidays section they display the text: ‘’10 great things about our family holidays’’. Below the pictures under this text, again the activities are directed at children, but the text at the parents. As well many pictures of happy families can be seen. (Thomson, 2015)

In conclusion one can say that when targeting families it is important to engage the children in a holiday offer. Focus on the kids of the family, but direct the sales pitch at the parents. If the company represents itself like this, the family segment can be attracted and engaging with them will be easier. By staying committed there is the opportunity to continue a relationship and even gain a long-term oriented relationship. Still this segment will usually stay in the secondary relationship.

Bibliography

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

Thomas Cook. (2015). Family Holidays. Retrieved from:

https://www.thomascook.com/holidays/family/

Thomson. (2015). Family Holidays. Retrieved from:

https://www.thomson.co.uk/holidays/family