The physical arena is the most important Moment of Truth for a DMO.

A Destination Management Organizations “is organized to promote its perspective destination to attract visitors”, as stated by the DMAI. (Destination Marketing Association International (DMAI), 2013) Therefore it is vital for them to build and retain a destination image and a loyal customer base with satisfied customers to reach these objectives. To have satisfied customer it is important that the entire holiday experience is exactly meeting their expectations and a DMO usually aims to exceed these to enhance customer trust. The actual experience at the destination can be compared to the physical arena of a DMO because this is the place where the customers have physical contact with the DMO which respectively is the destination. (Peelen & Beltman, 2013)

The opening statement refers to the “Consumer Decision- Making Journey in a Digital World” as portrayed in the article “Consumer Moments of Truth In the Digital Context” written by Moran et al. Therefore the Zero Moment of Truth (ZMOT) is the one when customers do research and find reviews and other information about the product or service in the internet. The First MOT is the purchase and the Second MOT the actual experience. The Third MOT is the sharing with others after the actual experience which is the content searched by customers in the Zero MOT. Sharing either positive or negative holiday experiences is a crucial for DMO’s. In general it is important to react fast on customer experience stories because reviews can either be enhancing or on the contrary ruining the image of the destination. It is vital to react on negative Feedback with solutions or share positive reviews via various channels. This procedure is also essential to maintain customer loyalty and being seen as trustworthy by the customers because “messages originating from an experienced consumer inherently are considered more believable and trustworthy than marketer-initiated messages” (Moran & al, 2014).

Therefore one could argue that the Third MOT with information shared through the social media arena is the most important moment of truth for the DMO. However, experiencing the destination is vital to give Feedback because without an experience there is nothing to share. Moreover, it is the experience which in the end is the most memorable part of a holiday. If the booking process through the digital arena (e.g. the DMO’s website) was not flawless but the experience at the destination was exceeding the customers’ expectations, then usually the overall experience was still satisfying for the customer. Conversely, if the experience was negative and the booking process was successful, the experience is most likely negative. The customer might even share their bad experience and will probably switch to another destination or booking medium. The latter procedure could have a devastating effect on the DMO and the destination image. (Peelen & Beltman, 2013)

Therefore the DMAI tackled the topic of the fast growing and real life social media and online arena with an article of “Experience design- Make your destination sharable” on their website: destinationmarketing.org. It is argued that “how customers are treated online impacts their experience almost as much as how they’re treated offline” (Stoll, 2014)

In order to come to a conclusion one can say that there is actually a symbiosis between all Moment of Truths. The Social Media Arena grows stronger every day and should not be neglected in the sharing process of Feedback and reviews to support the DMO. However, Flawless customer experiences in the physical arena do lead to customer loyalty in the long run.

Sources

Destination Marketing Association International (DMAI). (2013). About the Industry. Retrieved October 2015, from http://www.destinationmarketing.org/topics/about-industry

Moran, & al, e. (2014). Consumer Moments of Truth.

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

Stoll, M. (2014). Experience Design-Make your destination shareable. (D. M. International, Editor) Retrieved October 2015, from http://www.destinationmarketing.org/blog/experience-design-make-your-destination-shareable

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The importance of customer retention

customer retention

Which Customers are leaving the company and what causes them to go? How much does the company need to invest to prevent customers to quit? Is it worth to invest money in retaining customers?

Customer Engagement Management is in the end all about maintaining profitable as a company and preventing customer churn. In order to prevent customers of leaving the company it is vital to analyze the customer- company relationship. Here, retention analysis becomes substantial for every type of company whether it is product or service driven. It helps the company to become aware “of those customers who demonstrate an increased likelihood of ending the relationship, then it can take action to prevent this” (Peelen & Beltman, 2013).

In general the first step towards a successful retention analysis is to have qualitative, historical data of customer transactions and patterns. Therefore every interaction with the customer should be noted in detail to be able to recognize when a customer is likely to churn the company. In service based businesses like a Destination Management Organization (DMO) it is not easy to find out when a customer has quit the relationship with the company. (Lehman, 2015) The interactions, like purchasing a holiday package are not done every month but rather every 6 to 12 months. Therefore it is hard to identify if a customer really left the company or is just attrite and didn’t book for a long time due to other circumstances. To be able to analyze the client behavior it is essential to keep track “of every email, tweet, link, click, and phone call made to that client.” (Lehman, 2015).

To undertake the retention analysis to its fullest, the obtained historical data needs to be put in a successful model. Therefore the data needs to be divided into 50% of former customers and 50% of current customers to have a predictable sample. Then the 50:50 data should again be divided in half in order that one set will be the training set and the other half will be the validation set. The assumptions which are made with the training set can be compared to the validation set to actually see which customers are likely to withdraw from the company. In order to do so, interest variables need to be checked as well. Interest variables for a DMO could be: purchase (time, frequency, monetary), email contact, log-in on website, open website or social media and direct contact via phone. (Peelen & Beltman, 2013)

When it is clear which customers have quit or are about to quit the company could react to those clients. The company could send personalized messages or call the customer based on their behavioral history with the company. The DMO could send a person who usually travels to London every Christmas a booking reminder in autumn. The client usually books every year in summer so autumn would be a good time for a reminder. To be more convincing this message should include the general dates which have usually been booked by the customers. As an advantage the company could then use the hotel preference to introduce the customer to a new, maybe even more luxurious hotel than the one which has been booked every year. Reviews or discounts of partners could be included to underline the importance of the customer to the company.

“Many business owners know their acquisition rate, because getting new customers is fun. Relatively few know their attrition rate; losing customers is no fun.” – Jeff Haden (Beard, 2013)

Why is customer retention so important you might ask. One of the most important reasons is effort and money. It would cost the DMO a lot more money to acquire a new customer than to stick to a loyal customer. (Beard, 2013) (Peelen & Beltman, 2013) Therefore it is very important to undertake a successful Retention analysis to convince customers to stick with your company.

Sources

Beard, R. (2013, October). Customer Retention Rate Explained for Dummies. (C. Heartbeat, Editor) Retrieved 2015, from http://blog.clientheartbeat.com/customer-retention-rate/

Lehman, T. (2015). How to define retention rate for customer retention. (N. North, Editor) Retrieved October 2015, from http://www.newnorth.com/how-to-calculate-metrics-for-customer-retention/

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

Enhance consumer trust through Co-creation

Made with http://www.tagxedo.com/app.html

Nowadays people trust other customers and their experiences more than the ones of a Marketing Organization. Fear of manipulation makes people leery; therefore it is in this technological century more than ever important to gain the customers trust. One theory which could support trust empowerment is the concept of “Co-creation”. This concept is used because “Many organisations find it advantageous to engage the customer in the development process.” (Peelen & Beltman, 2013)

In a Destination Marketing Company it could be important that the customers, who have already been at the destination, write reviews or blogs or share pictures of their experiences with the organization. The DMO can then use this material on their website, also personalized, to become more trustworthy. In addition, it emphasizes that what they promise is true. Also the customers are engaged more effectively because they are creating content for the website of the DMO. This gives the DMO the opportunity to react upon positive or negative reactions by customers and therefore make them feel involved and heard. Following this process, the customers are emotional engaged due to the fact that their experiences are shown in public and therefore their published contents can also seen as a reward.

In the end, all that really matters is to become more profitable as a DMO. To reach this goal it is also vital to gain the consumers trust and loyalty. Customers who trust a company and moreover feel understood and engaged in a company, are willing to book their vacation again at this specific company. To maintain profitable it is essential for all companies to enhance customer loyalty. Encouraging people to be directly involved in the services of the DMO supports additionally the chance to move customers up in the Pyramid of Relationships (Peelen & Beltman, 2013) and also to keep them as a loyal customer in the future.

To underline the circle of the co-creation theory with another theory, the Moment of Truth (MOT) can be used (Moran & al, 2014). This theory explains that there are four Moments of Truth: The Zero MOT is when the customer is looking online for information about the interested service of product and is therefore checking reviews of other customers, who the influence the purchase decision. The First MOT is when the customer is purchasing the product or service and the Second MOT is when the customer is experiencing the service or product. The Third MOT is the last stage in the circle because it is when the customer shares the experience with others e.g. as reviews in the internet. This information can then be used for other customers who research a destination before purchase in the Zero MOT. (Moran & al, 2014) Thus one can say that the Zero MOT and the Third MOT are substantial for the co-creation theory.

The Lanzarote DMO works with co-creation on their website as well. They created a Google map and the customers can send the organization pictures and blog entries about experiences on specific places on Lanzarote. The visitor can click on the different pictures of tourists and can read the different real life experiences. (Turismo Lanzarote, 2015) This persuades the customer more than if the pictures and descriptions come from the organization itself because the fear of manipulation and untruthfulness is bigger.

Another way of using Co-creation is the use of testimonials of “experts” or “prominent people”. This can underline credibility and trust towards the organization even more. Hamburg Tourismus is the DMO of the German city Hamburg and they make use of so called “Hamburg experts” which are listed on their website. These experts are chefs, designers, photographers, owners and Burlesque dancers and everyone is described with a brief profile and a quote about the city. In addition one can see some favorite places, tips and other attention catching ideas about Hamburg. (Hamburg Tourismus GmbH, 2015)

Retrieved from hamburg-tourismus.de
Retrieved from hamburg-tourismus.de

Therefore, co-creation can be used to engage customers directly or enhancing credibility through experts quoted on the website of a DMO, both helping to create trust, loyalty and profitability.

Sources

Hamburg Tourismus GmbH. (2015). Unsere Hamburg Experten. Retrieved October 2015, from http://www.hamburg-tourism.de/erleben/unsere-experten/im-ueberblick/

Moran, & al, e. (2014). Consumer Moments of Truth.

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

Turismo Lanzarote. (2015). The images of visitors. Retrieved from http://www.turismolanzarote.com/en/panoramio.jsp

Enhance Customer Engagement through the Omnichannel approach

social media
Retrieved from visitengland.com

Researching a favored holiday destination in the internet; retrieving details to a personal offer via email while noticing advertisement of the desired destination on Facebook; implementing the purchase by calling and finally receiving the confirmation via the mobile phone. Nowadays this is the norm and no exception anymore. Everybody knows that procedure. The so called “Omni Channel” approach is one theory without which a Destination Marketing Organization (DMO) cannot survive in the future anymore.

Customers are more and more reliant on starting a purchase in one media channel and ending it in another. This has also to do with the increasing technological development and the customer’s dependency on the mobile phone. (Davis, Leroux, & al, 2014) The mobile option today is a fundamental role to increase the consumer experience in a very practical manner. A physical store is not particular relevant for a Destination Marketing Organization, however being available throughout multiple channels is vital. These channels can be e-commerce, mobile, social media and catalogues, which make the customer experience coherent. (Davis, Leroux, & al, 2014) One of the main goals for the DMO while creating an omni channel strategy is to find the perfect channel mix which gives value to the company and the customer. If implemented correctly this also enhances the relationship between the customer and the company. (Peelen & Beltman, 2013)

Another driving role by pursuing the goal of Omnichanneling is to create quality customer databases. This is of utmost importance because the chance that a customer is more satisfied is higher, when a conversation could also be picked up in another media channel. (Peelen & Beltman, 2013) For instance if a customer has asked information about a holiday booking in a specific hotel and during a specific time frame via e-mail, the record system of the customer databases should be filled with this information. Then it is easy for any employee to answer also on a direct message on Facebook to that specific customer without asking for the same details again. This makes the entire relationship and information sharing between customer and organization much easier and pleasurable. In addition the customer feels understood and knows that the contact with the organization is without much effort. On the contrary, this means more effort for the organization due to maintenance of the customer databases but with prospective positive outcomes in the future.

Many Destination Marketing Organizations implement Social media and different media channels into their communication strategy. Therefore DMO’s like Lanzarote Turismo and VisitEngland apply Social Media channels onto their website. These channels can be: Facebook, Twitter, Instagram, YouTube, Linked in, Flickr and Google+ as well as e-newsletters. (Lanzarote) (Visit England) Moreover it can be seen that VisitEngland for example tries to engage with the customers by putting the email addresses of all employees and the departments onto the website to encourage the customers to engage with them personally.

Retrieved from visitengland.com
Retrieved from visitengland.com

This can be very profitable for the DMO as long as the contact is as efficient and pleasurable as mentioned above and customers can reach the organization whenever they want to and through whatever medium they like the most. If a valuable media channel mix is found and the databases are also beneficial to the customer- employee conversation, then customers are likely to be more satisfied. Thus, Omnichannelling does create loyal customers in the future if the strategy is applied thoroughly.

“Today, the focus is moving towards customer recognition and data connectivity across channels, media and devices”. ~ Paul Hatley (Davis, Leroux, & al, 2014)

Sources

Davis, H., Leroux, M., & al, e. (2014). Raconteur- Customer Experience and Loyalty. Raconteur Media.

Lanzarote. (n.d.). Lanzarote- Your holiday spot. Retrieved from http://www.turismolanzarote.com/en/

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

Visit England. (n.d.). Connect with us. Retrieved October 2015, from https://www.visitengland.com/biz/about-us/contact-us/connect-us