Implementing one-to-one marketing
One-to-one marketing can be put into place by using several simple capabilities:
This can be done through databases, which allow a vendor to tell its customers apart and remember them individually. As much information as possible must be obtained about the customer and his or her purchasing habits and needs. The customer’s history would be recorded through his or her previous interactions and with each interaction the company will learn more about the client. The customer and company can then collaborate jointly to determine the appropriate product or service for that customer.
It is important to make it easy for customers to specify their needs by asking the right questions and then remembering and recording the specifications so that the customer does not have to re-specify. That way, customers have to go to less effort next time they wish to use the service. For example, most call centre operators will have in front of them the complete history of a particular customer’s previous transactions, thanks to sophisticated databases.
Some kind of feedback link is necessary for the destination to learn about the customers individually and therefore make them loyal and improve the company’s unit margin. It is absolutely essential to open channels of communication between the consumer and the company. Sometimes it can be as simple as printing a web-site address on the packaging of the product or, in the case of tourism, on the destination brochure. As the computer penetrates more and more homes, and as the various interactive tools available to consumers continue to increase in utility, web-sites that allow the customer to buy on-line will attract the most enthusiastic and therefore valuable customers.
Interaction by telephone is often the first point of contact with the customer. To incorporate one-to-one marketing the company must simply ask one or two questions about the customer’s needs and map the customer into a needs based category. To implement this, the company would need to do research to create the correct needs-based groupings and give its phone sales representatives the necessary scripts.
Written questionnaires are another way of interacting with customers. However, it obviously involves the customer making an effort. An increased use of coupons in order to obtain more information in destination brochures is a way of finding out about the type of client who is really interested in the destination. Another idea is a questionnaire inside a destination brochure, for example, which needs to perform some service for the end user that is actually connected to the user’s need for the product. Filling in the questionnaire must also involve as little effort as possible for the customer and all barriers preventing the customer from sending it in must be removed.Here are some suggestions for removing those barriers:
- Offer a postage-paid envelope.
- Assure the customer that returning the questionnaire will not result in any
undesired additional mail or solicitations, or allow the customer to ‘opt
out’ by ticking a box.
- Put the questionnaire at the beginning of the brochure so it is the first thing the customer sees after opening it.
- Allow the customer to reply by mail, e-mail, fax or a free-phone number.
Even after making it as convenient as possible it may still be necessary to offer some sort of incentive to the customer, perhaps a discount at a certain hotel, or on car hire, more information on the product or a free gift.
The collecting of customer information is aimed not at creating summary
research but developing a better understanding of each individual customer’s needs. Every communication and response from a customer has the potential to tell a one-to-one company more about exactly what a particular customer wants. Every single interaction is a priceless opportunity to learn more. Only recently, as information technology has improved, has it become possible for a company to identify and act on customer differences in a cost-effective way.
3.Customization of products and processes to customer needs
Tourism products are ideal to customize due to their flexibility. One destination can be combined with another, different hotels can be chosen, and all sorts of activities can be decided upon depending on the customer’s preferences. Tailor-made holidays are becoming more and more popular due to the amount of choice the customer enjoys. Even the way the product is presented can vary depending on ways of payment, promotion and booking (last minute deals are also increasing in popularity).
Customer loyalty is vital for numerous reasons. It costs more to serve new clients than it does old but surprisingly most companies do not even try to diminish the costs of trying to attract new customers as they are already budgeted. One-to-one marketing aims at reducing these costs by keeping customers instead of constantly looking for new ones. Costs involve advertising, mailings, information packs and, especially, time. The faithful customer is stable, predictable and knows the purchasing process of the company, therefore saving the staff time and bettering the service. The satisfied customers tend to recommend the product to their friends and acquaintances.
Recommendation is the best form of advertising to acquire new customers. This is especially the case for tourism, when people talk about the destination they have visited and encourage others to go there. The idea of information days when happy customers meet prospective customers is developing already in the world of tourism. Word of mouth is by far the most convincing advertisement a holiday destination can have as it comes from satisfied customers whose opinions are trusted by their friends. Personally recommended customers tend to be of better value, meaning more profitable and longer lasting than those attracted by advertising or promotions. Loyal customers allow the company to provide them with a more personal product due to the fact that the company has had the chance to learn about the clients’ needs and adapt to them – this is what one-to-one marketing is all about. However, despite the obvious benefits of customer loyalty, many companies focus more on gaining new clients than keeping old ones.
Loyalty programmes work differently depending on the company; however, the essential is for the consumer to benefit by repeatedly using the service or company provided. Loyalty programmes can be very sophisticated or very simple, for example the tour operator No Limits has put into place a loyalty system whereby each time customers book or introduce a friend to No Limits they receive ‘miles’ which equal reductions on travel. The hotel chain Los Paradores has a card system called La Carte Amigos de los Paradores giving regular customers free nights in the hotels as well as numerous other advantages such as the option to choose their room. An example on a larger scale is Club Mauritius, a group of tour operators, hotels and airlines who have come together with the aim of offering a loyalty programme whereby the cardholder receives benefits such as regular information about special travel offers to Mauritius, free parking in the airport car park, free afternoon tea, reductions on sports activities, car rental and in certain shops, and a bouquet of flowers on departure. Depending on the number of visits the customer makes to Mauritius the benefits become more attractive. Eurostar offers a similar system with blue, silver and gold membership cards.
Many airline companies have also implemented ‘frequent flyer’ loyalty programmes, easily put into place due to the fact that they already have the necessary information in the reservations system. Benefits include easier check-in procedures, use of a private lounge and access to newspapers etc. It must be remembered that, of course, other companies can set up similar loyalty programmes but the key to retaining the customers is the learning process which will have been undertaken by the company to ensure that the customer is receiving exactly what he or she wants and expects.
Why implement one-to-one marketing?
- One-to-one marketing allows you to take advantage of new technology. It is a concrete way to capitalize on the benefits of new technology. Technology is evolving at an amazing rate and is becoming more and more interactive. A few years ago the Internet was an unknown commodity to most people but the rate of its adoption into the home has been enormous. The adoption and utilization of new technology and therefore new commerce should not be ignored or under-estimated. Modern technology can lead to quick and powerful marketing; it ignores country boundaries and effectively contracts the size of the world. Traditional methods of mailing have become expensive and slow when compared with the inexpensive, fast and effective new technology of e-commerce. All over the world cyber travel agencies are being developed whereby the customers do the work and have direct access to tour operators and airlines to book their own holiday.
- One-to-one marketing gives you the chance to create new markets, markets of individual customers with diverse needs, which allows you to acquire new customers, but more importantly, sell a wider variety of new products and services to extend to the newly discovered needs of existing customers.
- You will be able to improve customer retention and loyalty dramatically and increase the amount of business you receive from each individual, despite the acquisition campaigns of competitors.
- One-to-one marketing gives you the opportunity to protect and increase unit margins. Let us take, for example, the subscription to a magazine. The second year of subscription often costs more than twice as much as the first. Why? Because presumably you like the magazine. As a result the unit margin of an existing customer is higher than that of a new customer as the company is using profit margins to create customers. Charging regular customers more is a natural consequence of trying to acquire new customers by using discounts but by bettering the product and tailoring it to the customer’s specifications the company can retain the existing customers and therefore add to unit margins.
- So it becomes clear that one-to-one marketing entails a need to compete using a different set of rules. How does it apply to tourism? Tourism incorporates a wide range of organizations, from destinations (countries, regions, cities and resorts) to private operators such as airlines, hotel chains, theme parks and so on. The need for one-to-one marketing methods applies to all organizations. In the past, it was only travel agents that had any meaningful sales contact with the final consumer. However, owing to the changing structure
of the tourism industry and the development of new technology, the destinations themselves, through destination management organizations (DMOs) and tour operators, are encouraging a direct business relationship with the end user.
- More and more destinations are using Destination Management Systems (DMS). DMS allow the centralization of all information, including customer information, into one central database. This information can then be used through various channels. Tour operators are also developing their own call centres and using travel agents’ databases for a more direct approach. Even transport companies and airlines are going straight to the end consumer; for example, seats on the Eurostar can be booked through on-line sales. All organizations have similar challenges, those of anticipating and responding to the customer’s needs, increasing the customer’s value and loyalty and encouraging repeat business. As a result, all organizations must adopt a one-to-one marketing strategy to maximize the benefits of their contact with the customer.