Introduction
You are the 'Product'
Tourism is essentially an amalgam of service industries. The 'products' we sell are 'experiences'.
A motel room, tour bus, fishing boat, café or any other piece of infrastructure are not the 'product', they are simply the means to deliver the visitor 'experience'.
Tourism 'experiences' are largely created through service and, in particular, through the people who deliver that service. When working in the tourism industry you are more than just a 'supplier' - you are a 'host'. Long after the holiday photos have started to fade, it is the service, the experiences and the people who helped to create them that visitors remember.
Whether you are a single operator or a regional tourism association, creating exemplary service requires an intimate understanding of your customer and the wider marketplace.
Segment your thinking
There is no such thing as the 'mass market', especially in the tourism industry.
The marketplace comprises smaller and often niche segments that reflect people's diverse tastes, interests, values and priorities.
Almost all products have higher appeal to some market segments than others. It is your challenge as a tourism operator to discover which segments will produce the best return on your effort and financial investment.
Advertising is an expensive way to reach new prospects, so your marketing effort needs to be as targeted as possible. Your message and product offer needs to reach those who will respond most positively to it and at times when they're most likely to respond.
To determine the best product offering to meet the needs and wants of your market segment, as well as to cost-effectively target your marketing message, it is essential that you thoroughly understand your customer base.
For regional and local tourism associations, the challenge is to not only understand the characteristics of the region's key market segments, but also to convey that knowledge to your operators and to introduce mechanisms to ensure higher standards of customer service across the town or region.
Luckily, in the tourism industry there is no shortage of material and services available cheaply, or at no cost, to help you understand the customer.
Satisfaction is no longer enough
You'll find many definitions of 'customer satisfaction', but what it boils down to is the difference between….
1. what the consumer expects from you, your business and staff , vs
2. what you actually deliver to them.
Better understanding of the marketplace should produce higher performance and levels of customer satisfaction. This usually results in:
- Increased loyalty
- Future visitation
- Greater tolerance of price increases
- Enhanced reputation
- Cheap/ no cost customer acquisition
- Improved staff morale and workplace satisfaction
You need to evaluate market segments for: size, potential yield, basic demographic characteristics (eg age, sex, socio-economic status), geographic proximity, business growth potential, needs, wants and values. The Roy Morgan/ Colin Betjeman psychographic segmentation of the marketplace has underpinned Tourism Victoria's marketing for more than 15 years.
Roy Morgan Values Segments (73 kb)
It's often said that simply meeting customer 'needs and wants' is now the everyday expectation of consumers. It may get them through your door once, but it will not ensure that they will buy again and will probably not generate word of mouth endorsement among friends, family and colleagues.
To build repeat business and to achieve excellent word-of-mouth you must aim to exceed their wants, needs and expectations. It's called the 'delight' factor and is best described as the 'surprise' component of your product offer. In tourism and travel, this delight factor is most often generated through exceptional and personalised service.
To read how two major tourism attractions used research to identify key issues and to subsequently improve their visitor experience click on the following links
Royal Botanic Gardens (52 kb)
Federation Square (51 kb)
Look before you leap
If you are looking to develop a new tourism product, you have the opportunity to carefully plan and tailor your product to satisfy the highest yielding market segment/s. This is achieved not just through the 'bricks and mortar' of your facility, but, more importantly, how you meet and exceed the service and experiential needs of those segment/s.
The information needed to be known by someone contemplating establishing a new tourism product, or buying an existing business includes:
- Will the product meet a real market need and demand ?
- What competition already exists ?
- What will be my point of difference ?
- Does the product have synergy with the branding and market positioning of the region ?
- Who will best respond to the product offer ?
- Is that market segment large enough – and accessible enough – to sustain business for the majority of the year ?
- What service standards are expected by that market segment/s
To read the case study of a small tourism operator whose careful analysis of the marketplace has resulted in an annual average occupancy of 93% click on the following link.
Chocolate Gannets (51 kb)
Fine-tuning can pay dividends
If you have an existing tourism product, then it's a matter of choosing and targeting the market segment/s that will best respond to your product offer. If a segment can't be found, it may mean that your product is outdated and may need re-working to enable it to survive in today's very competitive tourism environment.
What should you aim to know ?
- Where they live
- Leisure/ recreation interests
- Travel patterns
- Disposable income
- Spending habits and priorities
- Values
- How they obtain their information
How can you do this ?
- Ask questions
- Listen to your customers' comments
- Observe other businesses
- Consult tourism industry colleagues
- Consult relevant industry associations
- Conduct surveys
- Analyse existing data
Where is the data available ?
- Council Economic Development Units
- Regional Tourism Organisations
- Visitor Information Centre staff and surveys
- Local/ regional tourism studies/ strategies
- Tourism Victoria research library (www.tourism.vic.gov.au)
- Tourism Australia research library (www.tourism.australia.com)
- Other State/ Territory Tourism Organisation's research libraries (online)
- Tourism Research Australia (www.tra.australia.com)
- Australian Bureau of Statistics
- Decipher (www.decipher.biz)
- Industry associations (you may need to be a member)
- Industry and professional journals
- Industry conferences and workshops (key presentations are often available online)
- Market research companies
- Tourism industry consultants
- Newspapers (business sections, opinion pages and letters to the editor are often good sources)
Find out more information about data available to you to help understand your customers and the industry environment.
It's important to remember that once you have selected your market segment/s, you will need to continue to monitor the characteristics of that segment. Just as fashions change, so to do social needs and trends. The health of the tourism industry and your business depends on consumer confidence and the discretionary dollar available in the community. Spending habits and priorities can change rapidly in response to economic and emotional factors.
Click here (673 kb) to read about accommodation proprietors who used all available resources to establish and then to fine-tune their product, to find out about their target market, and who are still keeping up with the ever changing trends of the industry.
If you are working off customer survey data that is more than 2 years old, then you're probably out of touch with what your customer is thinking and what they require from a tourism product.
Regional tourism organizations have an important responsibility to continually monitor the marketplace and to provide this information to their businesses. To read how an RTO conducts its own research to ensure that the right mix of accommodation is available within the region to meet visitor expectations click on the following link
Geelong Otway Tourism (54 kb)
Surveying makes very good 'cents'
If you are already an operator, one of the simplest and most cost-effective ways to obtain customer data is to conduct your own survey. This can be a series of structured questions you ask when:
- You receive enquiries by telephone
- Customers check-in
- Customers are enjoying your product
- Customers check-out
- You conduct a post-visit follow-up
If you are going to conduct primary research, remember:
- Format the questions for ease of data processing
- Minimise the number of questions and keep them brief
- Make the questions meaningful to your business
- Consider offering an incentive (especially for written surveys)
- Set-aside the time to regularly analyse the results
- Share the results with your staff
There are many companies who can assist you to accurately construct and conduct surveys. The Australian Market & Social Research Society Limited (a not-for-profit professional membership body) has a database of 267 Australian market research suppliers. You can search by keyword, alphabetically, location or research method. It also has a number of references and tools on its website that may be of assistance.
URL: www.mrsa.com.au
Email:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Phone: 02 9566 3102
To read how Australia's leading heritage attraction uses a combination of low cost research methods to keep in touch with its markets click on the following links.
Sovereign Hill (51 kb)
To read about the concept of Customer Auditing, or 'Mystery Shopping', as it is often called.
Why bother ?
If constructed and conducted correctly, the results of surveys can not only inform you about your customers, but can also reveal your business's strengths and weaknesses.
Regular analysis may enable you to correct problems and react to emerging trends before they can adversely affect the business. This is particularly relevant to those businesses involved with international markets. However, there are plenty of examples of tourism operators in regional Australia who failed to read the dramatic changes in domestic trends during the past two decades.
By thoroughly understanding your market segments, you will be able to identify key selling points and to determine product offers and marketing messages that may appeal to them.
Having analysed the information processing habits of your segments, you will also be more cost-effective in choosing which publications and electronic media you could use to reach them.
One product does not make an 'experience'
No one in the tourism industry operates in isolation. The total experience relies on quality delivery from many suppliers.
“…the industry comprises the airline that brings the tourists, the buses and taxis transporting them, the hotels housing them, the restaurants feeding them, the coaches and boats showing them the sites, the shops selling them goods and the theatre and entertainment areas that provide amusement. “ (Stimson et al, 1996).
Many other industries rely on vertical integration of processes and suppliers to ensure consistent quality. However, tourism and hospitality is an amalgam of strongly individualistic businesses and business people, who need to rely on the cooperation and inter-dependence of others to build the overall visitor experience.
This makes the issue of quality control even more critical for the tourism industry, especially for tourism organisations and associations, who need to build quality control across their entire sector.
Establishing strong, mutually beneficial relationships with suppliers will enable you to have some influence over the product they deliver to your guest. One prominent Victorian accommodation provider will not recommend anything in the region to its customers until it has been assessed by a senior staff member. They believe that every recommendation they make is a direct reflection upon the professionalism and customer service of their business.
Talk to your regional tourism organisation about how it approaches industry networking, training and quality control across the local sector. Observe how other successful regions build the quality of the local product and service delivery. Tourism Victoria's Industry Development Unit and Tourism Alliance Victoria can also help.