Tour operators use mobile marketing to increase customer engagement

In the USA 185 million people own a smartphone. The average person looks at it about 46 times in one single day. Especially young adults between 18 and 27 years check their phone about 74 times daily and persons between 35 and 40 years check their phones about 35 times each day. (Eadicicco, 2015)

Already 2002 Matt Haig saw the increasing importance of mobile marketing. Haig explains the phone use as something highly personal used for communication between friends and family. He mainly concentrates on messages, which offer a form of branding based on interactivity. (Haig, 2002) Since then, a lot has happened especially in terms of smartphone use and high-speed wireless connections.

“Mobile marketing is considered as a viable means of marketing communication because of the inherent features such as personalization, localization, ubiquity and interactivity.” Through personalized apps to be downloaded on phones, tour operators are enabled to communicate and engage with their customers directly. Also with personalized text messages the customer has a more engaged feeling in the topic. Nowadays the most popular mobile marketing methods to engage clients is via mobile telemarketing, text messaging and push messages through websites. (Kushwaha & Agrawal, 2016) Through mobile marketing the tour operator integrates themselves into the everyday lives of their customers. Also through different segmentation techniques the personalized messages offer more possibilities of an engaging experience to the customers. (Peelen & Beltman, 2013)

“Flixbus”, a tour operator established in Germany in 2011, uses many different mobile marketing strategies and is a good example for engaging their customers. Their mobile 1-neededapp is downloadable is different stores (Android, Apple, Microsoft) for free and allows the customers to book tickets, save their trips and to use it as their ticket at the bus entry. Additionally, the company sends out text messages to their clients if something has happened, such as shown in the picture on the left. With this they notify not only the customers within the bus, but also the customers waiting for the bus in different locations. The direct announcement to each client, gives them a good feeling of being involved in what is happening further. Moreover, they use push and pull marketing to engage their customers. They send out newsletters and therefor approach clients directly according to their interests with deals and engage in social media and on their website by initiating competitions that show the involvement and engagement of other clients.

In contrary, it can also be said that “the lasting success of mobile applications is dependent of the relevance of the service” to a client and the price charged. (Peelen & Beltman, 2013) Furthermore, the number of apps are increasing steadily, which offers a wide variety for the clients and harder to choose from. But still, mobile marketing is turning out to one of the biggest marketing sources to engage clients, as most people still see their phones as a personal space.

 

Sources

Eadicicco, L. (2015, December 15). Americans Check Their Phones 8 Billion Times a Day. Retrieved October 07, 2016, from TIME: http://time.com/4147614/smartphone-usage-us-2015/

Haig, M. (2002). Mobile Marketing. London: Kogan Page Limited. Retrieved October 07, 2016, from https://books.google.nl/books?hl=en&lr=&id=2gGo7kiZc4MC&oi=fnd&pg=PA1&dq=mobile+marketing+tour+operator&ots=jOCiFDDEH6&sig=ORjzlMOVILmItcPki4NfS6RImjY#v=onepage&q&f=false

Kushwaha, G. S., & Agrawal, S. R. (2016). The impact of mobile marketing initiatives on consumers’ attitudes and behavioural outcomes. Emerald. Retrieved October 07, 2016, from http://dx.doi.org/10.1108/JRIM-06-2015-0041

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (Vol. 2). Boston: Pearson Education Limited. Retrieved October 07, 2016

 

How important is digital up-selling and cross-selling to tour operators?

Cross-selling and up-selling are very similar in different ways. Most important, both strategies offer the clients extra options for their booking and are important for a functioning customer relationship. Tour operators must truly understand their customers, to place the right advertisement ads on websites or send informative emails. Offers made to the customers mainly depend on the customers’ interests, needs and wants. Amazon, for example, sells 35% of their revenue from cross-selling. (Carlson, 2013)

According to Ed Peelen (2013) “cross-selling is the sale of products to current customers who are already purchasing one or more products from the supplying company.” It is specified to current customers as data has already been collected on those clients and the company can target them better. If new clients are targeted the advertisement ads are usually based upon the buying behavior of existing customers and gives a wide variety of products. Those cross-selling ads on websites are usually very visible to the client and is found after a booking. To increase the interest of the clients, the online tour operator connects the ads with the previous booking searches. (Kenny, 2016) This way the customer has the feeling to be taken care of and being remembered by the company from a previous booking.

Up-selling, on the other hand, is a kind of upgrade to the client. With an example of the online tour operator “booking.com” it can be shown that up-selling is also done less obvious to the clients: By comparing different options on the same page with various information, the client starts to compare the initial desire with better options and might upgrade themselves. Next to the different hotels, rooms and other options are shown to choose from as well. With up-sales customers often gain the feeling that they win something, which makes them longer lasting for the company and forms a bond. Accordingly, “upselling isn’t just a sales tactic; it’s a customer happiness tactic” and plays an important role in the customer lifetime value, if the up-selling is done right. (Markidan, 2014)

Cross-selling and up-selling focus mainly on existing customers, as it can cost four times as much to sell to a new customer as it does to sell to an existing one. By cross-selling and up-selling to clients already on the client roster, companies can sell more products and services, reduce the cost of sales, enhance customer loyalty and drive revenue. (Kenny, 2016) But cross-selling and up-selling are not only good for the tour operators but also for the clients, as it is made sure of, that the customer picks the right product for them and that they have everything to use that product. (Lazazzera, 2015)

In conclusion it can be said, that customers are willing to spend more money if they have the feeling of getting value for their money (Huddleston, 2016) and that it is very important to provide the clients with maximum value for full satisfaction. Accordingly, cross-selling and up-selling are very important to keep and engage existing and new clients and to advise them, even if it’s not personal.

 

Sources

Carlson, K. (2013, October 14). Cross-sell & up-sell: If you like this blog post, you may also like… Retrieved October 01, 2016, from The Future of Customer Engagement and Commerce: http://www.the-future-of-commerce.com/2013/10/14/ecommerce-cross-sell-up-sell/

Huddleston, J. (2016, June 22). Customer Expansion Revenue Strategies: Expert Cross-sell and Upsell Tips. Retrieved October 01, 2016, from Service Source: http://www.servicesource.com/blog/customer-expansion-revenue-strategies-expert-cross-sell-and-upsell-tips

Kenny, E. (2016, February 9). How to master up-selling and cross-selling in Travel. Retrieved September 30, 2016, from Boxever: http://www.boxever.com/how-to-master-up-selling-and-cross-selling-in-travel

Lazazzera, R. (2015, March 05). Would You Like Fries With That? How to Increase Revenue, Improve the Customer Experience with Upselling. Retrieved October 01, 2016, from Shopify: https://www.shopify.com/blog/17579484-how-to-increase-revenue-and-improve-the-customer-experience-with-upselling-and-cross-selling

Markidan, L. (2014, October 7). How to Use Upselling to Increase Customer Happiness, Retention and Revenue. Retrieved September 30, 2016, from Groove: https://www.groovehq.com/support/upsells

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (Vol. 2). Boston: Pearson Education Limited. Retrieved September 30, 2016

The Editors. (2016, January 01). How to Cross Sell and Up Sell. Retrieved October 01, 2016, from dun&bradstreet: http://www.dnb.com/perspectives/marketing-sales/how-to-cross-sell-up-sell.html

Customer differentiation can increase the engagement value

Within the tour operator business, the customers might be differentiated into different segmentation groups. Guidelines should be followed so the different homogeneous customer groups are measurable, substantial, accessible, differentiable and actionable. (Peelen & Beltman, 2013)

Most tour operators do not differentiate customers but specialize on a certain location. Research has shown that different target markets have certain values to a company. Therefore, because of differentiation tour operators can specify their target market and focus on their personal and individual needs and wants to increase customer engagement and purchasing.

Finding the most effective categorization from the whole population is one of the greatest challenges (Peelen & Beltman, 2013) but for this blog the travelers will be categorized into 4 categories: Business travelers, Leisure travelers, Families/Groups and Special needs travelers.

According to Julie Dent (Customer Journey Mapping: A Walk In Customers’ Shoes, 2013) Business travelers have the most importance in the tourism business, as the fix costs are relatively low, no extra services are required and these travelers usually have policies and contract that binds them to one certain tour operators. However, Business travelers have the highest expectations and a higher number of important elements within their travel. Following are the Leisure travelers, which can be share mainly the same aspects as the Business travelers. Though the expectations of Leisure travelers are lower, they still find a big number of elements important during their stay. However, they usually also have more options than any other target group. Families, Groups and Special Needs travelers are easier to satisfy within their travels, this could be because the availabilities for those travelers are limited.

Due to the different wants, needs and expectations of the customers the value of the customer to the tour operators shift. To integrate certain target markets more within the tour operating industry many businesses started to concentrate on the target markets undervalued by big firms. Those tour operators can be found on different online sites such as Disability Travel Agents (2015) or Ambrose (2008).

Furthermore great satisfaction in this specialized kind of field also offers greater possibilities for the marketing and customer engagement. Justin Skeesuck is bound to a wheelchair and widely known for his inspirations and instructions for disabled travel. On his facebook page he posts regularly about his trips to different places and gives advise to other disabled travelers. (Skeesuck, n.d.) This also includes his experiences travel agencies.

Especially in todays world, where traveling has become very easy, travelers with special needs and bigger groups seek for tour operators with experience and knowledge. If managing a company with a good image and reliable tours for a certain customer segment, those travelers are more likely to stay with one company and to recommend it other of their own field. This can also take affect when a tour operator concentrates on business or leisure travelers, but the choices for those travelers are growing fast and they might not be that easy to keep with one sinlge company.

 

Sources

Ambrose, J. (2008). Tour Operators. Retrieved September 23, 2016, from DisablesdTravelers.com: http://www.executiveclasstravelers.com/1/tour_operators.htm

Dent, J. (2013). Customer Journey Mapping: A Walk In Customers’ Shoes. Retrieved September 23, 2016, from http://www.ascendforairlines.com/sites/default/files/article_0.pdf

Disability Travel Agents. (2015). Travel Agents & Tour Operators. Retrieved September 23, 2016, from TravelGuide.org: http://www.travelguides.org/travelagents.html

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (Vol. 2). Boston: Pearson Education Limited. Retrieved September 23, 2016

Skeesuck, J. (n.d.). The Disabled Traveler. Retrieved September 23, 2016, from Facebook: https://www.facebook.com/thedisabledtraveler/about/?entry_point=page_nav_about_item&tab=page_info

Is the digital arena the most important in customer engagement yet?

Tour operators do not only try to attract their clients with one medium, but uses different ‘arenas’ to incorporate their attention. The arenas are divided into Social, Digital and Physical arenas.

The arenas mentioned above are important for online and offline tour operators to raise the awareness of a company and to engage customers to become loyal and trusting. To increase the sales for the different tours, the tour operators try to create a long lasting relationship with the customer and use different channels for that. (Peelen & Beltman, 2013)

Within the past few years the number of online sales and online tour operators has increased rapidly throughout the world. But is this digital arena also the most important one in customer engagement?

The Social arena cannot sell a product but is very important in the customer engagement. It can be said that through Social Media different tour operators build a stronger relationship with their clients and win their trust by giving them an engaged feeling. Also they give their customers the right to share their thoughts and follow different authentic storylines within a single site. For example, TUI posts different pictures and videos to their social media page “facebook” on a daily basis and answer to comments by the followers. But by doing that they do not only promote their services, they promote the different locations. Many photos and videos have commentaries from “followers” underneath, which can be re-share it with different friends on the same Media. (Facebook, 2016) This shows the loyalty from both parties and strengthens the relationship by trust and interaction with the clients. But to actually purchase a product, the clients are most likely to be referred to the digital website.

Different than the Social Media arena, the Digital arena sells products and has been an increasing factor in tourism sales over the past years. It creates an individual overview of the tour operator and gives different offers according to the client’s search and it is more appealing for specific searches and bookings itself. The Digital arenas mainly uses different viral marketing techniques to “pass on a marketing message to other sites or users, creating a potentially exponential growth in the message’s visibility and effect.” (Turban, Strauss, & Lai, 2016) It is important to add different tools that engage the customer and give them as much help as needed. Also different advertisement ads for ‘personal help’ are usually integrated to give the customer are more personal feeling and to affect their decision by giving them a safe platform. (Liu, 2000)

However, the Digital arena does depend increasingly on the country of origin. It has been found that in undeveloped countries with many backpackers the digital customer engagement is not as important as in developed countries. Even though the number of tour operators creating tours in undeveloped countries is increasing, those are mostly not affordable by backpackers or local residence. Therefore, local walk-in tour operators can engage and advise the customer better as any digital engagement. In developed countries the number of stores for travel agencies and tour operators has been decreasing as the availability and cost of internet is also more affordable. In general, the Physical arena is still very important as it is more personal and customer friendly. The Physical arena is the most relationship oriented business.

Many tour operators, especially in developed countries work with all three arenas, as they have the resources and the employees to do so. The Physical arena is most customer friendly and engaging but also walk-in customers depend on the first impression. All three arenas have to work with each other to create a customer relationship. While in undeveloped countries with many backpackers, the tour operators mainly focus on walk-in clients, the more developed clients work more with digital and social media arenas to increase their customer engagement and sell their tours.

All in all, it can be said, that in developed countries the digital arena is going to be the most important within the near future, as the number of online sales are increasing rapidly and the online presence is very important for today’s generation. As of right now the balance between physical stores and digital sites is leaning towards the digital arena, but has not completely taken over the buying process of customers.

 

Sources

Facebook. (2016). TUI. Retrieved September 18, 2016, from https://www.facebook.com/TUINederland/

Liu, Z. (2000, June 26). Internet Tourism Marketing: Potention and Constraints. Retrieved September 18, 2016, from Ideas&Trends: http://www.hotel-online.com/Trends/ChiangMaiJun00/InternetConstraints.html

Peelen, E., & Beltman, R. (2013). Customer Relationship Management (Vol. 2). Boston: Pearson Education Limited. Retrieved September 17, 2016

Turban, E., Strauss, J., & Lai, L. (2016). Customer Engagement and Metrics. In Social Commerce (pp. 99-125). Springer International Publishing. Retrieved September 17, 2016