RELATIONSHIP MARKETING IN TRAVEL AND TOURISM INDUSTRY CHAPTER12
Structure Introduction Importance of relationship marketing in travel and tourism Relationship Marketing strategies in travel and tourism industry Characteristics of relationship marketing Consumer/Tourist Loyalty Applications of RM in travel and tourism Personalized relationship marketing Implementation of RM in travel and tourism Effective communication in travel and tourism
Introduction Relationship marketing in travel and tourism industry represents a paradigm of changes which take place in the marketing practice. Changes are mainly related to shift from the focus at transaction to the focus of relationships. Relationship approach points out relationship continuity which is to be developing between the travel and tourism organisation and its consumers, with main focus at consumer services and standards of quality.
Introduction Traditionally, marketing is focused on creating opportunities for sales of products (goods/services) transactions in travel and tourism trade. Application of Relationship marketing in travels and tourism service sector assumes developing relationships not only with the consumers /tourists but also with agents, brokers, suppliers, corporate and also individuals
Importance of RM IN Travel and Tourism In the travel and tourism business, especially in the hospitality sector with the high level of interactions between the consumers/tourists and the selling personnel and hospitality industry is especially important. Important segments:- Between the retailers of hospitality services ;such as hotels, food and beverages or the airlines, and marketing companies such as tour operator, conglomerate travel agencies, incentives company.
Importance of RM IN Travel and Tourism Between the retailers of tourist products or hospitality services providers and key consumers such as large corporate and government agencies. Between the food and beverages retailing outlets such as restaurants, cafe, fast food outlets and organizations. Between retailers within one sort of interrelated tourists and the hospitality service sectors such as hotel chains, motels and restaruants.
Importance of RM IN Travel and Tourism Between the retailers of hospitality services and key suppliers Between the hotel organization and employees Between hotel organization and its marketing agencies, banks, legal support etc.
Importance of RM IN Travel and Tourism In the hospitality business and the travel/tourism industry the RM is directed to building brand loyalty. While in production sector other there is no direct contact with consumer or very low level contacts. In order to create and improve relations with consumers, usually data bases with guest history are created and this is usually used to create customized offers and communications with customers.
Importance of RM IN Travel and Tourism In hotel or restaurant businesses theses data may be related to choices of food and beverages, table preferences, details of the latest visits etc. Special telephone numbers and VIP facilities are created for important or priority guests. Special care and extra attention is offered to such distinguished people. Special lists are created to invite such special people on very special occasions also they are called and greeted on their special days such as birthdays, anniversaries etc.
Importance of RM IN Travel and Tourism Important people become members of the executive data in the hotels and airlines. Important guests are informed about privilege offers, special discounts, information about new services from time to time. Important customers are also considered for sharing information and taking advice for new opportunities and new products before launch and after.
Marketing strategies in travel and tourism Managing the relationships in the best manner between the consumer and the tourist service company is always the best strategy in order to achieve regular business and reach a high commercial efficiency ( price and payments). In this business the importance of relationship is primordial to a company s effort to maximize its business. Travel and tourism business s competitive advantage is not only defined by the supply contents, but also by the contact personnel's behaviour which involves a permanent interactivity between the customer and latter
Marketing strategies in travel and tourism In order to manage a healthy and quality relationship with a customer, tourism companies pursue the administration and conception of the expertise they have gained with the latter. Tourist satisfaction and loyalty directly depends upon the quality of relationship they have with the tourism company. Creating a pleasant business environment shall quickly become the key to buyer s loyalty. Customer s satisfaction level goes up significantly, when the enterprises adopt to the respective buyers desire s and needs.
Marketing strategies in travel and tourism The tourism industry must understand the customer expectations very well and their needs. Company must be well acquainted about drawing attention of their customers well and must maintain the periodical communication. It is necessary for a enterprise to create marketing programme for maintaining customer relations aimed at maximizing their long term loyalty. Increasing the profits from current customers, ceasing tourist losses on short term and using current tourists to attract other potential ones.
Marketing strategies in travel and tourism Actual implementation of marketing strategies underlies the efficiency of a tourism company s activities. The first distinctive attribute of a company for excellence is related to its implementation concept. A poorly executed strategy brings about poor results as easily as a badly set up strategy s does. Implementing the best strategy is the process where ideas become actions by developing certain programmes.
Marketing strategies in travel and tourism Marketing strategy may involve a change in the company s process, culture, structure management style etc. Ensuring profitability means that the travel and tourism company should apply a valid strategy. The travel and tourism companies that do not see their businesses as mere transaction, but ongoing relations with tourists approach and financially support several marketing programmes meant to convenience tourists to come back and become loyal
Customer Value The long life of a company s tourist service activity largely depends upon retaining its clientele and on its ability to attract new tourist segments. According to Philip kotler Higher the customer loyalty is, the less you have to pay for advertising, most clients will come back and buy again although you have no advertisement only due to high level of satisfaction, customer themselves advertise for you.
Marketing strategies in travel and tourism Relational marketing is regarded as a solution for keeping an enterprises customers on a very long term. In order to generate the highest satisfaction of the business, an enterprise can use three strategies to render value to client. The strategy of adding financial advantage The strategy of adding social advantage Building strong relationships
Marketing strategies in travel and tourism The strategy of adding financial advantage Adopting price reductions for certain tourist products. Granting service facilities to loyal clients Guaranteeing the repayments of tourist service value in case tourists are dissatisfied
Marketing strategies in travel and tourism The strategy of adding social advantages: - This strategy involves tourism personnel in setting up personnel relations with tourists by means of getting acquainted with their desires and reasons, by customizing and individualizing certain products and services.
Marketing strategies in travel and tourism Building strong relationships:- This strategy is completely focused at building strong relations with consumers for financial and social benefits. It is necessary that one resort to relational marketing strategies in order to keep customers and develop profitable long-term relationships with them. Moreover suppliers are keen on ensuring both customers complete satisfaction and delight and their values growth to a selling enterprise.
Marketing strategies in travel and tourism Keeping customers within an enterprise rang does not confine to maintaining their values at its original level. Any professional from relation marketing domain and customer relation management aims at growing customer value to an organisation. In this respect they should resort following strategies: Cross selling strategy Up selling Strategy Compensation strategy
Marketing strategies in travel and tourism Cross selling strategy :-Gradual supply and sale of several categories of products and services to the same customer as compared to the range they bought when they started to collaborate with a supplier. Up Selling Strategy:- This refers to the sale of the products and services from the categories, a customer usually requires, but having a greater allowance than the products a customer ordered when they first started their combination with a supplier.
Marketing strategies in travel and tourism Compensation Strategy :- This strategy refers to reimbursing the value of faulty goods that have generated customer s dissatisfaction replacing faulty goods. Improvement strategy Repairing faulty products Stimulation strategy Granting discounts and resuming the relations with loosing customers Persuasion strategy Supplier s promise to meet customer expectation
Characteristics of the Relationship Marketing Characteristics of the relationship marketing could be summarized as follows:- Focus at keeping tourists/consumers Product benefit orientation Long term relationship Focus at consumer dedicated services High level consumer involvement High level contacts with consumers Total Quality Management
Goals of Relationship Marketing Demonstrate competitive advantages through creating higher level of values for consumers. Providing enough values in service products, in order to get repeat sales. Create consumer loyalty towards organization Building relationship for mutual benefits- Organization and Consumer.
The Loyalty Ladder Advocate Supporter Client Customer Prospect
Important Steps of Relationship Marketing in Travel and Tourism Key Consumer identification:- Successful implementation of relationship marketing requires identification of consumers with whom the organisation would want to forge the relationship. Delegating experienced relationship manager to every key consumer, The relationship manager, who is deputed should be experienced and must be sensitive to the needs and wants of key clients.
Important Steps of Relationship Marketing in Travel and Tourism Designing and defining the clear job description with responsibilities, competences, goals and evaluation criteria, Relationship manager should be in charge of managing all contacts with consumers. Annual plan of activities should be designed by relationship manager. Goals, strategies, specific procedure and relevant resources should be clearly stated in the plan documents. Delegating supervising manager to relationship manager. He/ she should be a person capable to define the job description, evaluating criteria and necessary logistics support, in order to improve efficiency of relationship manager.
Personalized Relationship Marketing Improving personal relations with consumers may be performed through four approaches as mentioned below:- Offering higher level of services than might be expected in different forms such as: Transparent reporting on used services, Evaluation of level of customer satisfaction, Easily available trained personnel and consulting services. More intensive contacts with clients such as contacts with frequent users or telephone calls, more effective communication with clients, meeting with consumers, system of feedback information.
Personalized Relationship Marketing Developing total business system on relationship basis, for e.g. Organisation of seminars for clients, Assistance in networking and benchmarking sending samples or organisations of study tours. Developing social relationships through special invitations, Birthday gifts, Greetings on consumer anniversaries.etc.
Key Decision Criteria for investing in Customers Strategic importance of a customer Maintenance cost Customer s loyalty level Customer s recent attraction Customer s share of Business Potential to grow customer value