Understanding social media for tour operators

Social media is progressively more popular and tour operators are wondering whether they should join trend or not. There are a few reasons why tour operators should use social media. Firstly, it helps tour operators have more control over their online reputation. Secondly, social media can assist tour operators in effective marketing by getting the word out and engaging with customers. Lastly, Google loves social media and the more social media accounts the tour operator has, the higher it is ranked on Google search results page. (Lenoir, 2016)

In order for tour operators to use social media, they need to know which social media tools and strategy to use. The honeycomb of social media model can help tour operators. The honey comb of social media is a framework which consists of seven building blocks that assist companies to understand social activities in order to develop a strategy that suits their company best (Peelan & Beltman, 2013). These building blocks can be used individually or together.

When looking at the seven building block of the honeycomb of social media, there are four building blocks that would be interesting for tour operators which are identity, presence and reputation blocks as explained in Peelan & Beltman (2013)

  • The identity block is the extent to which users or companies share or convey themselves. Identity can be shown through images, graphics, descriptions, followers, comments and much more.
  • The presence block is the extent to which a user knows if others are available. Staying relevant is important in social media.
  • The reputation block is the extent to which users can identify the standing of others and content, including themselves on social media.
  • The sharing block is the extent to which users exchange, disturbed and receive content. If companies had no content to share, they would not have any identity, presence or reputation.

Facebook has all of the building blocks that are interesting for your operators. According to Kietzman et al (2011), Facebook contains the following blocks on the picture below. Facebook is good tool for sharing as well but the article was published in 2011 which means it lacks the latest trends and up to date information. Moreover, tour operators can use Facebook as social media tool to create a strategy that spread brand awareness and engages with customers. Facebook can be used in combination with storytelling by posting photos, stories about wildlife and environment, guides, employees, locals, unique facts about the tours, charity activities and events, interesting records, special guests or celebrities on tours in order to have customers engaged with the tour operators’ brand and products. An example is a well-known tour operator, TUI. They post about existing destinations, new destinations, when they have good deals, when they have contests on Facebook which leads to customer engagement.

honeycomb of social media.jpg
Keitzman, et al (2011)

In conclusion, tour operators should join the social media trend and the honeycomb of social media model can assist in the process. These building blocks are useful for understanding the engagement needs of social media users. Using a few blocks instead of all of them can clarify how existing platforms add value. After looking at the blocks that are relevant for tour operators, Facebook seems to be a good social media tool and therefore create a strategy that ultimately leads to customer engagement.

Sources:

Kietzmann, Jan H.; Hermkens, Kristopher; McCarthy, Ian P.; Silvestre, Bruno S. (2011) Social media? Get serious! Understanding the functional building blocks of social media. Business Horizons

Lenoir, S. (2016). Hubspotnet. Retrieved 4 October, 2016, from http://cdn2.hubspot.net/hub/123098/file-31373350-pdf/eBooks/ebook-social-media-for-tour-operators.pdf

Peelen, E., & Beltman, R. (2013). Customer Relationship Management.Pearson.

 

Tour operator – personalized marketing through RFM customer segmentation

RFM is a technique used to create segment of customers based on their past purchasing behavior with the hopes that history will repeat itself.  RFM is analyzed by using the last purchase date (recency), purchase frequency (frequency) and amount spent (monetary value) (Peelen & Beltman, 2013). RFM is a crucial data analysis method in CRM.

In order to perform RFM analysis, each customer is given a score for recency, frequency, and monetary value, and then a final RFM score is calculated. It starts by creating a recency list from highest to lowest into five segments. Each recency segment is then arranged for frequency and separated into five equal segments. Finally, the same is done for monetary value and it results to 125 segments that have RFM scores ranging from 555 to 111. The customers with the highest RFM score are considered to be the ones that are most likely to respond to the tour operator’s offers.

Even though RFM analysis is a useful data analysis method, it does have its restrictions. Tour operators must be careful that customers with the highest RFM score are not overwhelmed with for example excessive emails/offers. Also customers with low RFM scores should not be neglected, but instead should be cultivated to become better customers. (Techtargetcom, 2016) Tour operators can use RFM to deliver better targeted unique messaging and personalized offers. An example is Thomson Holidays which is a UK-based travel operator and subsidiary of TUI Group. Thompson uses RFM customer segmentation to targeting purposes. RFM helps Thomson to focus its marketing effort on customers who are more likely to give a return on marketing investment. (Bournemouthacuk, 2016)

There are three types of customers that would be interesting for the tour operating industry to provide more personalized marketing as explained in Peelen and Beltman (2013).

  • The first type of customers is high value customers with high recency, high frequency and high monetary scores. Tour operators should reward the customers with exclusive offers of package tours and special privileges which would make the customers happy and appreciated in order to keep making bookings.
  • The second type of customers is newest customers with high recency, low frequency and low monetary scores. Tour operators should make sure they put their best foot forward, by sending them welcome offers and relevant information to get them accustomed to your tour operator. Since this type of customer have low frequency scores, it is better to send more promotions to them.
  • The third type of customers is inactive or least engaged customers with low recency, low frequency and low monetary scores. Tour operators need to decide whether to attempt to re-activate them or let them go. They should send these customers promotions since they are low frequency customers and also have an option to unsubscribe. When unsubscribe is clicked, following will be a question of what they want to do. The options are to unsubscribe completely, receive promotions once a month or once a week. Therefore the customers will feel that they are heard and actually start booking with the tour operator. Moreover, the three types of customers that came from the RFM customer segmentation could help tour operators with targeting customers and personalized offers.

In conclusion, RFM customer segmentation will be very useful for tour operators to identify their customers and provide more personalized marketing. RFM makes it easier because it groups people with similar scores which are ideal for tour operators. The three types of customers should be the core focus of the tour operators because they are going to be the main one that book with them and they need to find ways in order to personalized marketing efforts to therefore create customer engagement and make more profit.

Sources:

Bournemouthacuk. (2016). Bournemouthacuk. Retrieved 27 September, 2016, from http://eprints.bournemouth.ac.uk/15750/1/Database_Marketing_In_Travel_And_Tourism.pdf

Peelen, E., & Beltman, R. (2013). Customer Relationship Management.Pearson.

Sailthrucom. (2016). Sailthrucom. Retrieved 27 September, 2016, from http://www.sailthru.com/marketing-blog/written-effective-email-marketing-strategies-segmentation-rfm/

Techtargetcom. (2016). SearchDataManagement. Retrieved 27 September, 2016, from http://searchdatamanagement.techtarget.com/definition/RFM-analysis

The use mass customization within the tour operating industry

A great deal of importance is attributed to the way a customer is being involved in the process of value creation (Peelen & Beltman, 2013). Focusing on the customer can be very important but can potentially be a burden. Many companies have resorted to new inventions and programs in order to create customer engagement during the creation process such as co-creation and mass customization. However, unnecessarily costs have come from these programs (Gilmore & Pine, 2013).

Mass customization has been embraced by many companies in order to avoid downfalls and also to involve customers in the creation process. This approach can be used by tour operators to create better customer engagement. Mass customization can be defined as “each customer provides unique information so that the product may be tailored to their specific needs” (Peelan & Beltman, 2013). Mass customization adds a new dimension that highlights the relationship between a tour operator and its customers. It has four approaches which are collaborative customization, adaptive customization, cosmetic customization and transparent customization (Peelan & Beltman, 2013). There is a choice to pick one approach otherwise combine two or more approaches to provide a relationship between tour operators and its customers.

The first approach is cosmetic customization. This is “a simple adjustment in the product’s exterior (representation)” (Peelan & Beltman, 2013). This approach can be implemented by individualizing the product by sending an email with a brochure or video of a package tour to each customer with their name on it. Although these brochures and videos are the same for every customer, a simple modification can make the customer feel the package tour is exactly for them and make the clients more engaged.

 Another approach is transparent customization. This is when “a company adapts the product but not the representation. This approach is suitable when the customer‘s wishes are predictable, or when customers do not wish to repeat their preferences every time” (Peelan & Beltman, 2013). Tour operators can implement this approach by keeping records of their customer’s personal preferences so they can tailor to their needs when creating an ideal tour package. This approach results in a desirable experience for the customer because tour operators can customize and optimize tour packages to fits into the standard tour package which will lead to an enhancing of the customer’s preferences to keep booking with the tour operator.

The third approach is collaborative customization. This is “adapting the product and representation. This approach is suitable for companies whose customers do not find it easy to convey what they want” (Peelan & Beltman, 2013.) Tour operators can create personal tours, where customers work with the tour operator to identify which country, accommodation, excursions and transportation they want in their personal tour. With the widespread use of the internet, this approach can be adopted and implemented by tour operators. For example, a tour operator by the name of YourWay2Go is a Dutch travel specialist for individual travel to more than 30 countries (Yourway2gonl, 2016). On their website the customer has the opportunity to create their own tour which includes choosing destinations, accommodations, excursions and means of transport catered to their liking.

The last approach is adaptive customization, “in which neither the product nor the representation is adapted. A company with an adaptive customization strategy offers one standard product that is designed such that users themselves can adapt it to suit their own needs” (Peelan & Beltman, 2013). Tour operators have standard tour packages but the customers have the option to adjust which country, accommodation and excursions within the alternatives that the tour operator has, in order to meets his or her preference. For example, the tour operator Yourway2go.nl, also have an option where they have standard packages and the customers could change either accommodation or transport to their liking. (Yourway2gonl, 2016).

Screenshot 2016-10-13 08.45.34.png
Yourway2gonl (2016)

In conclusion, mass customization is a strategy that will benefit tour operators because it helps them create efficient customer engagement and involve customers in the value creation process. The four approaches of mass customization provide a structure for tour operators to customize tour packages for customer. In addition, tour operators may have more success if they combine two or more approaches. Even though, mass customization can be costly, it will still create value to tour operators. With the use of internet and the right application, mass customization will help tour operators meet the needs of individual customers.

Sources

Barman, S. (2013). An Overview of Mass Customization in Practice. Retrieved 23 September, 2016, from http://gebrc.nccu.edu.tw/proceedings/APDSI/2013/proc/P121210001.pdf

Gilmore, J., & Pine, B. (2013). Harvard Business Review. Retrieved 23 September, 2016, from https://hbr.org/1997/01/the-four-faces-of-mass-customization

Peelen, E., & Beltman, R. (2013). Customer Relationship Management.Pearson.

Yourway2gonl. (2016). Yourway2gonl. Retrieved 25 September, 2016, from http://yourway2go.nl/

 

 

Tour operator should enhance customer-supplier contact

Tour operators should make it easy to communicate but also have to make sure interactions are efficient. According to Peelen & Beltman (2013), most interactions between customer and supplier are quite poor. Most relevant conversation happens before or after a tour. Simply processing a request, registering and reacting to a complaint or suggesting solutions in a way that shows concern and importance will be very essential in bettering customer-supplier relationship.

To enhance customer-supplier relationship, tour operator companies must analyze their internal environment. Tour operators should have contact persons with the skills and expertise to deal with customers and place the customers’ interest before the company’s interest. This will lead to trust and there is a higher likelihood of overcoming feelings of uncertainty and doubt. After trust, personal commitment is one of the ultimate goals for building a relationship with your customers. Personal commitment is “the desire someone displays to continue a relationship” (Peelen & Beltman,2013). It is the only one that is felt internally and derives from a personal choice. Tour operators should thus not feel obligated to display personal commitment, but instead have the ‘want’ to do so.

Another, and initial, way of enhancing customer-supplier relationship for tour operators is to have knowledge about the customer. In order to know your customer, a customer profile must be made. It must present a realistic idea about who the customer is as a person, what has the customer purchased, how do they prefer to communicate and what might be of interest to them. It is recommended to collect as much information as possible to develop relationships that is mutually profitable. For example, Emerald is an IT system for tour operators which analyses and control customer relationships: from the first contact through to bookings and the resulting categorization up to customer feedback and new bookings (Isotravelcom, 2016).

Furthermore, tour operators should provide personalized customer-supplier relationship in an effortless manner. According to Easen (2016), conversational commerce is such a big trend currently and the customer can initiate engagement with the company. Conversational Commerce refers to using a messenger application such as WhatsApp, Facebook and other messenger service providers to interact with a company. The term Conversational Commerce was made up by Chris Messina, Developer Experience Lead at Uber. (Customerthinkcom, 2016) Tour operators can make use of conversational commerce to enhance customer-supplier contact by using a popular messaging application for customer satisfaction. Tour operators can meet customers where they are already spending most of their time makes this ideal for bettering customer-supplier relationship.

Lastly, another way to build a relationship with customers is to provide incentives to continuously use the services of the company. An example of this is the Customer Loyalty Program. The idea of this is to reward customers who book the company’s tour services frequently. If used correctly, it can create a sense of community among loyal customers and also give customers a fun reason to continue to return to the company. The rewards can be some kind of membership to loyal customers club, annual discounts on gifts and services, and special perks (Isotravelcom, 2016).

In conclusion, the relationship between customers and companies is key to not only success for the company, but also gives customers the incentive to return and/or suggest the company to even more potential customer. Tour operators should have a professional but personal relationship with the customers to give the sense of a unique experience. Good customer services and programs such as the Customer Loyalty Programs will create efficient customer-supplier interaction which will lead to customer engagement.

Sources:

Customerthinkcom. (2016). Customerthinkcom. Retrieved 17 September, 2016, from http://customerthink.com/conversational-commerce-and-what-it-means-for-your-customer-strategy/

Easen, N. (2016). Customers expect more than ever. Customer Eperience & Loyalty. Raconteur. Retrieved 17 September, 2016, from https://raconteur.uberflip.com/i/708792-customer-experience-and-loyalty

Isotravelcom. (2016). Isotravelcom. Retrieved 17 September, 2016, from http://www.isotravel.com/assets/documents/brochure-emerald-en.pdf

Peelen, E., & Beltman, R. (2013). Customer Relationship Management.Pearson.

Trainingaidorg. (2016). Trainingaidorg. Retrieved 13 September, 2016, from https://www.trainingaid.org/news/loyalty-travel-program-examples-tips-and-ideas-tour-operators