Communities; come together!

Mobile technology and the whole social web made a huge development. From web 1.0 with interactive brochures until now, when the world is analysing about how web 4.0 will look like. The social web has started as a read-only medium and nowadays it is “the centre of all kinds of activities that people want to engage in” (Peelen & Beltman, 2013, p. 301). These kind of activities differ from doing purchases, to learning and communicating with other people. The web has become an important platform where people’s life takes place and where people are connected with their devices to get access to all the media and content they are searching for. The web has become a navigator for the consumer.

As a result of this development, the social web can play a different role in the various stages of a relationship between the company and the customers. The social web can be used in the beginning with information about the organization, their products, services and brands. It can also play a role within the development phase of a relationship with a customer. The customer could use some help orientating and selecting the right products and services. After the sales are made the social web can offer the ability to let customers provide feedback and companies provide extra service (Peelen & Beltman, 2013).

A good and practical example of the social web that plays a role in these different stages can be the online community. According to Peelen & Beltman (2013) internet had always “the intention to bring people together” (p. 298). The community started out with forum applications where anyone could leave a message. These boards became major hangouts for people who wanted to share information about their personal lives, their interests, but also about companies and their products (Peelen & Beltman, 2013).

An example within the tour operating industry is My Djoser. Djoser is a tour operator that offers a platform separated from their selling-website. On this platform, customers can create their own personal account which results in a personal page on My Djoser. This page shows a lot of various information about their previous and upcoming travels, for instance a list of the other group travellers and the possibility to post their holiday pictures. People can share their pictures of their previous destinations with other customers. In this way people can use the platform to be inspired and to be prepared for their next holidays (Djoser, 2016).

This community responds to the previous mentioned stages in the relationship with their customers. The customers will feel more engaged with the company, because they can orientate and be inspired by other people’s photos of destinations, but also because of the fact there is a possibility to write reviews. All in all, this kind of platform can be very interesting for other tour operators to get more engaged with their own customers.

Sources

Djoser. (2016). https://mijn.djoser.nl/. Retrieved at Oktober 9, 2016, van Mijn Djoser; Met oog voor de wereld: https://mijn.djoser.nl/

Peelen, E., & Beltman, R. (2013). The nature of the CRM strategy. In E. Peelen, & R. Beltman, Customer Relationship Management. Pearson Education Limited.

 

 

Decision-making tree

Momentarily, big data is a phenomenon that offers companies a lot of information about their customers. On the other hand, this data will also give many information about potential customers. To reach these potential customers is another story altogether and a way to attract these customers can be by initiating a new marketing strategy with the use of segmentation. In this blog segmentation will be discussed and an example of targeting a new group will be explained by using a decision tree.

Segmentation is used to subdivide a market to attract potential customers during marketing campaigns. The segmentation criteria are indicators which are used to identify or assign groups Segmentation as told by Peelen & Beltman (2013) is described as indicators such as geographical, demographic and socioeconomic characteristics. Another example of indicators can be transactional, behavioural and lifestyle data. According to the article from Raconteur (2016) transactional data is related to what the average spending’s of a customer are where lifestyle data refers to people’s identity and interests. Lastly there is behavioural data which is related to people’s online and offline activity and which channels they use to make purchases.

Currently tour operators are not making concrete use of this kind of segmentation techniques. Mostly the segmentation is based on the type of products instead of the type of costumers. Tour operators could use segmentation to start up a new brand or marketing campaign. Nowadays a lot of data is collected and with this data a good segmentation strategy could be initiated. A model such as the decision tree could be the first start-up for a new strategy. The decision tree is a model which can help you analysing patterns to make good decisions (Peelen & Beltman, 2013).

In Figure 1 a decision tree is formed based on the Mentality-Model of Motivaction. Motivaction has used a lot of data to create 8 mentalities. These 8 mentalities can be the first inspiration to create a new strategy based on lifestyle and transactional choices from these target groups. As an example the target group 20-30 year olds has been chosen. Three of the following mentalities fit the age group of 20-30 years old very well: Cosmopolitans, Upwardly Mobiles and the Postmodern Hedonists (Motivaction International, 2016). An example of how a decision tree can be built up is as follows:

decisiontreemotivaction
Figure 1: Decision-tree based on the Mentality-Model by Motivaction (2016)

(Motivaction International, Opwaarts mobielen, 2016)
(Motivaction International, Postmoderne hedonisten, 2016)
(Motivaction International, 2016)

As seen in figure one the decision tree can be used create segments within a wider target group. In the example the profile of the Cosmopolitans has been used to define the greater example. As the cosmopolitans are mostly high-spenders, it can be concluded that they will be into more luxury holidays. In a marketing strategy aspects of their lifestyle aspects for instance could be addressed to convince them of purchasing their luxury travels at your brand.

 

Sources

Matthews, D. (2016, September 1). How connected data is targeting consumers. Retrieved at October 1, 2016, from Raconteur: http://raconteur.net/business/how-connected-data-is-targeting-consumers

Motivaction International. (2016). De acht Mentality-milieus. Retrieved at October 1, 2016, from Motivaction; research and strategy: http://www.motivaction.nl/mentality/de-acht-mentality-milieus

Motivaction International. (2016). Kosmopolieten. Retrieved at October 1, 2016, from Motivaction; research and strategy: http://www.motivaction.nl/mentality/de-acht-mentality-milieus/de-kosmopolieten

Motivaction International. (2016). Opwaarts mobielen. Retrieved at October 1, 2016, from Motivaction; research and strategy: http://www.motivaction.nl/mentality/de-acht-mentality-milieus/opwaarts-mobielen

Motivaction International. (2016). Postmoderne hedonisten. Retrieved at October 1, 2016, from Motivaction; research and strategy: http://www.motivaction.nl/mentality/de-acht-mentality-milieus/postmoderne-hedonisten

Peelen, E., & Beltman, R. (2013). The nature of the CRM strategy. In E. Peelen, & R. Beltman, Customer Relationship Management. Pearson Education Limited.

Customer’s Engagement Value

Nowadays, customers value organisations that offer them unique and personal experiences that are accompanied by their services and products. As stated otherwise by Peelen & Beltman (2013) “The value of the organisation is not intrinsic to the organisation, but rather resides within the customer”. The customers’ value of a product is therefore very important for a company, but how can we measure the importance of this customer’s value? And how can tour operators implement this within their strategy to attract new customers or extend the value of existing customers?

The customer’s value can be explained with the CEV theory of Kumar et al. (2010). CEV means Customer’s Engagement Value and it clarifies the creation of value by customers. This cannot be measured by the purchases of a customer only; it includes behavioural characteristics as well. Examples of these characteristics can be positive or negative reviews. The customer’s engagement value can be divided into 4 components:

  • customer lifetime value (CLV);
  • customer referral value (CRV);
  • customer influencer value (CIV);
  • and customer knowledge value (CKV).

All of the values mentioned above are important to implement within a company’s strategy. CLV is all about the future probability for a company; how many purchases will an existing customer make in his or her life with the company. The CRV is important because it will generate future revenue for a company. CRV can be accomplished by rewarding customers for making referrals. As Kumar et al. (2010) mentions: “providing at least some of the reward to the receiver of the referral seems to be more effective for customers who have stronger ties to others in their network”.

The customer influencer value is connected to the CRV. Each time a customer affects another person’s behaviour by for instance Word of Mouth will influence their own CIV. And finally the CKV explains about a customer’s feedback or ideas for improvements or innovations (Kumar, et al., 2010).

As explained above the Customer’s Engagement Value can be measured by these 4 components and it will be valuable for a tour operator to implement these within the strategy for customisation of their products and services. Satisfied customers (CLV) will more likely pass on their knowledge to acquaintances and relatives (CRV/CIV) but also to the company (CKV).

A practical example of the customer’s engagement value is a referral program from the Escape Artist (2016). Companies desire loyal customers and this can be achieved by a referral program. As the Escape Artist (2016) mentions: “we are showing our loyalty to you by rewarding your loyalty to us”. The program consists of a $250 credit per referral. On one hand, the customer can earn an extra credit for travelling with the company and they will become more loyal to the company. On the other hand, the company can see the effect of a referral value within the company (Escape Artist Adventure Travel, 2016).

Sources

Escape Artist Adventure Travel. (2016). The Escape Artist Referral Program. Retrieved september 25, 2016, from The Escape Artist: http://www.theescapeartist.com/about/referral-program/

Kumar, V., Aksoy, L., Donkers, B., Venkatesan, R., Wiesel, T., & Tillmanns, S. (2010). Undervalued or Overvalued Customers: Capturing Total Customer Engagement Value. Journal Of Service Research, 13(3). Retrieved September 25, 2016

Peelen, E., & Beltman, R. (2013). The nature of the CRM strategy. In E. Peelen, & R. Beltman, Customer Relationship Management. Pearson Education Limited.

 

Customer intimacy versus privacy

Customer Engagement Management (CEM) is all about connecting to and engaging with your (potential) customers. An important strategy which can be used and related to CEM is Treacy and Wiersema’s valuable discipline, customer intimacy. Peelen and Beltman (2013) defines a customer intimacy strategy as “characterised by the fact that companies build up a relationship with customers. It is not so much the market that becomes the centre of attention, but the individual wishes of customers that count” (p. 51). Knowledge of these individual wishes and preferences are extremely important to develop a good long relationship with customers (Peelen & Beltman, 2013).

Business require a lot of information to build up this certain relationship to give the customers the ultimate experiences. However, do the customers want to share al their information? Research from the Future Foundation (2015) shows that 50% of the people surveyed are into providing information if it is related to getting discounts. Less than 30% of the people wants to give permission when it is about previous purchases to improve their services. Out of this you can indicate that people are not completely ready to share their information for all of the reasons businesses want them to.

permission_big_data
Figure 1. Reprinted from Future Traveller Tribes 2030 by Future Foundation. Copyright 2015. 

The example of discounts and personal pricing does raise some concerns. According to economics (as cited in Future Foundation, 2015) forms of personal pricing can have a good effect on as well business as consumers. Nonetheless, there are concerns about the combining of personal pricing with the gathering of big data. Consumers can be scammed or be disadvantaged because they do not have a lot of knowledge about these issues. This can be resolved by current privacy and consumer protection laws and by providing more transparency into the assembling of Big Data by companies. As referred to in the research of Marketo (2015): one on one marketing is very powerful, but it should speak to individuals “on their own terms”.

Another example for ‘handing over’ our privacy to implement customer intimacy, is for social security. The CEO of Thomas Cook Belgium describes that people are more hesitant of giving their personal information, despite of previous events such as the terrorist attacks at the airport of Zaventum. People should become more aware that handing over some of their privacy is for their own safety. By giving personal details governments can screen everyone more easily and companies, such as tour operators can contact customers faster at crucial situations. The CEO even mentions that it should be possible for companies to share details of customers with one another. In this way for instance the Facebook profiles of customers can be shared, so that the companies can contact their customers in a more personal way to keep them up-to-date (Dekeyser, 2016).

All in all, we should think about the advantages and downsides of the relinquishment of our privacy. The using and trading of Big Data can lead to “more competition and better informed consumer choices” (Future Foundation, 2015) but it can also guarantee more personal safety in the future.

Sources

Dekeyser, J. (2016, march 26). Toeristen, geef alstublieft een extra stukje privacy prijs. De Tijd. Retrieved from http://www.tijd.be/opinie/algemeen/Toeristen_geef_alstublieft_een_extra_stukje_privacy_prijs.9748099-7765.art

Future Foundation. (2015). Future Traveller Tribes 2030; Understanding Tomorrow’s Traveller. Retrieved from http://www.amadeus.com/documents/future-traveller-tribes-2030/travel-report-future-traveller-tribes-2030.pdf

Marketo. (2015). The 5 Principles of Engagement Marketing. Retrieved from https://www.marketo.com/ebooks/elements-of-engagement-marketing/

Peelen, E., & Beltman, R. (2013). The nature of the CRM strategy. In E. Peelen, & R. Beltman, Customer Relationship Management (pp. 50-53). Pearson Education Limited.