Assessing the impact of web on eCRM in travel and hospitality

EFT Sales and Marketing in Travel USA SpecialViewpoint: Max Starkov, Chief eBusiness Strategist, Hospitality eBusiness Strategies

Published: 10 May 2007

EFT Sales and Marketing in Travel USA Special

Viewpoint: Max Starkov, Chief eBusiness Strategist, Hospitality eBusiness Strategies

Trend #1: The Impact of Consumer Generated Media (CGM)

Implications for the travel sector:

• Credibility of “official” content

• Value of “official” customer service (e.g. self-service tools, information perceived as “official” vs. peer generated, etc.)

• Need to monitor and react fast

• Need to establish corporate policy regarding CGM

Building a Corporate CGM Strategy:

• Brand Defensive Strategy

• Brand-Sponsored CGM Initiatives

• CGM as a Marketing Medium

Trend #2: The Internet and Travel Consumer Perceptions

The Internet has changed forever:

• The way customers plan and purchase travel

• The way customers access information

• The way customers perceive credibility of information

Food for Thought:

• Credibility of offline accreditation (star rating)

• E.g. Campton Place Hotel in San Francisco: AAA 4 diamonds

• Fodors.com: 3.2 stars out of 5

• Frommers.com 2 stars out of 3

• Expedia: 4 ½ stars

• Trip Advisor: 4 stars

• Orbitz: 5 stars

• Credibility of content: hotel website vs. blogs and customer reviews

• Instant content delivery: I want it now! vs. print brochure

• Tagging and mashups

• RSS

Trend #3: Impact of new technologies on customer service online

• Providing consistent and satisfying service directly on the website

• Using intelligent self-service and analytic-driven insights (Omniture)

• Pre-arrival online check-in (Hyatt.com)

• E-Concierge (Hyatt.com)

• E-Folio (Marriott.com)

• Express check in kiosks in the lobby (Marriott.com)

• Pre-arrival room assignment

• Travel and weather alerts

Trend #4: Impact of the Internet on Customer Loyalty

The Internet has introduced remarkable price and information transparency. Travel service providers can no longer rely on low-attachment customer loyalty (e.g. inertia loyalty, price loyalty) and should strive to achieve true Premium Loyalty (i.e. emotional or brand loyalty), which results in high levels of attachment and repeat purchases.

Premium loyalty is achieved via:

• Product Differentiation (provide unique value proposition)

• Customer Differentiation (personalized service, customer appreciation and rewards)

Trend#5: Behavioral Marketing:

The Internet has allowed travel marketers to gain an in-depth knowledge of their customers, their travel planning and purchasing behaviors and preferences.

• Monitoring of the consumer behavior in all lifecycle stages

• Personalization of the brand message

• Targetability:

• Target Specific Customer Behavior

• Target Specific Demographics

• Target Specific feeder markets

• Geo Targeting

• One-to-one marketing

• Case Study:

• Yahoo Travel Behavioral Targeting

• MSN Customer Demographics Targeting

Trend #6: The Internet and Differentiation and Unique Value Proposition

The Internet has introduced definite trends in “Product Commoditization:”

• Best Rate Guarantee and Rate Parity across all channels

• TPIs (Third Party Intermediaries) and Hotels propagate the Web with price-driven hotel offers

• Hotels match rates offered by their comp sets

Therefore a Differentiation Strategy is a top priority for any travel service provider:

• Product Differentiation Travel Suppliers vs. TPIs

• Product Differentiation vs. Comp Set

• Differentiated approach to the travel service provider’s different key customer segments (i.e. family travel, business travel, meeting or wedding planners, etc.)

(Shared with EyeforTravel.com’s Ritesh Gupta)

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