Understanding customer needs in the tourism industry

Michou Maria Papavasileiou Vasiliki Papadakos Panagiotis Understanding customer needs in the tourism industry Gkirtzou Ekaterini Zachopoulos Antonis Kapravelos Alexandros Livadas Georgios HY490.91

Contents • The tourism market in Crete • How to collect and analyze customer data • Transition from product centric to customer centric view • Customers’ segmentation: techniques • Historical data for developing effective models • Next Best Offer Model • Developing models and campaigns HY490.91

Competition Crete is very competitive because, not only there is a large number of hotels but also they are usually full. Luxurious hotels outweigh the other types of hotels in Crete and they are the main part of local tourist industry HY490.91

Luxurious Hotels In Crete • Heraklion 46% • Chania 17.8% • Rethimno 19% • Lasithi 17% • During the 2002 the 68% of night of accommodation were in luxurious hotels • 13.92% in category “AA” • 54.31% in category “A” HY490.91

Profitability This analysis will judge the main tourist companies on seven criteria which are listed below. • Sales / Assets • Gross Profit / Sales • Sales Cost / Average Level of Fund • Quick Assets / Near Future Obligation • Basic Period of Vitality • Self Funds / Self Funds + Obligations • Total Obligations / Period of Self-Liquidation HY490.91

Customer orientation • Tourism industry in Crete is mostly based on foreign customers HY490.91

Customer orientation • Main sources: North & Central Europe HY490.91

Customer data Data groups • Customer Name / Address • Contact Information: Phone, e-mail, etc. • Purchase Data: How often they buy, when they buy, etc. • Marketing Data: How they first learned of your product or service • Demographic Information: age, geography, and income HY490.91

Customer data How to collect data • Collect both internal and external data • Sort and analyze. Cross-reference with demographic data. • Locate common patterns. Determine who is buying the most. • Focus on profitable customer groups. • Be alert on privacy laws! HY490.91

Product Centric Vs. Customer Centric view Product centric view • Here are our products and/or services. • Here is why we think they are great. • Do you want to buy them? HY490.91

Customer Centric view (1/2) Understanding customers begins with identifying them • Collect customer data • Combine multiple sources of data • Analyze customer relationships • Identify the best customers HY490.91

Customer Centric view (2/2) • Provide avenues for customer feedback • Talk to customers like customers • Test personalization • Say thank you • Create an ad hoc customer committee HY490.91

Techniques (1/2) • demographics – age, income, family status, education. People choose different products according to their age and activities. However, this should not be the only criteria • economic status - for example budget accommodation providers will target people who are travelling on a restricted income • purpose of travel - reason for travel and any special needs. For example, a business traveller will look for efficiency and prompt service whereas a family are more likely to look for fun activities HY490.91

Techniques (2/2) • nationality - as the section about overseas marketing indicates, some nationalities have a greater propensity to travel or indulge in certain activities than others • geographic location/origin - instate, out-of-state, local. For example, visitor attractions usually find that most visitors come from within one hours’ travelling time from the place where they live or are staying; • lifestyle, consumer attitudes and behaviour - price, quality, quantity. There are numerous studies and reports which break populations down into smaller sub-groups according to aspirations, attitudes and general lifestyles. • equipment ownership/use - RV's, sailboats, canoes, tents, snowmobiles HY490.91

Customer bands identified in the Cretan tourism market (1/2) • Young Free and Singles • DINKS (Duals income, no kids) , SINKS (Single income, no kids) • Families with children at preschool age • Families with children atprimary school HY490.91

Customer bands identified in the Cretan tourism market (2/2) • Families with children at secondary school • Empty Nesters • Third Agers (usually 70+) HY490.91

Historical data required to develop effective models (1/3) • Nationality • Financial position • Season (Summer/Winter) • Mountain / sea • Group / Independent HY490.91

Historical data required to develop effective models (2/3) • Family / Mate / Friends /Alone • International press • Fans of technology • History • Tradition HY490.91

Historical data required to develop effective models (3/3) • Food • Nightlife • Disabilities • Time period HY490.91

Business Situation • Revolutionary changes within the tourism industry brought about by the Internet meant the model needed to overhaul its tourism-promotion strategy to focus directly on individual tourists and niche markets. HY490.91

Solution • Our next best offer model is a new strategy through a range of instruments, including a tourism portal with customized, dynamic content provided direct to the customer in a variety of languages, together with a supporting data warehouse and CRM solution. HY490.91

Benefits • Reaches tourists directly • Builds relationship with customer • Enables travel planning • Supports local companies • Better analysis of tourist preferences • Better response to fast-changing trends HY490.91

Knowledge to customer advisor • Create package depending on customers needs and wishes. • Better understanding on customers’ need • Before and after sales dialog HY490.91

Tourist Campaign • Customer analysis • Design of the campaign • Define target group • Organize facilities and offers HY490.91

Tourist Campaign • Execution of campaign • Inbound campaign • Outbound campaign • Campaign evaluation Note : The tourist campaign is a circular procedure! HY490.91

Questions HY490.91

Understanding customer needs in the tourism industry