How a starting tourism business creates customer value by adopting digital marketing technology?

How a new tourism business creates customer value by adopting digital marketing technology?

Everybody is online today and everybody is expecting all the noteworthy and legitimate running businesses to be there as well. If the consumer can not find your online presence the chances are your business goes unnoticed. Even worse it builds an image of untrustworthiness in the minds of the consumers. The potential customer may presume the business can not deliver what the customer is expecting. If the business fails in the first customer touch point the game is over before it even began, no matter how good the service or a product in reality is.

Where to start when you´re starting- the do´s and don’t´s

Alford and Page state in their study of technology adoption in marketing that SMEs who have a strong Web presence grow twice as quickly as those who have no or minimal presence¹. It is essential to seriously think about implementing technology from the very beginning. As a starting business owner, you should start by thinking about what you want to achieve and who you want to reach. Once the business plan is ready, the goals, strategy and the understanding of the desired customer is clear it is time to use this knowledge as a basis in creating a suitable digital marketing plan. The plan should not be a separate aspect but rather intertwined with all that is in the very core of the business.

Dredge et al. examined the challenges and opportunities of digitalisation in tourism listing the needs of tourism businesses when taking up new technology². They identified five topics: skills, mentoring support, finance, policy support, and infrastructure.

Skills.

The digital competencies of your business will play a key role in the successful uptake of digital technologies. Often tourism businesses lack the necessary technical resources in their workforce to fully realise digital potentials. This can be due to a number of factors such as a lack of knowledge in identifying required digital skills to limited staffing issues. These restrict the time and effort which can be applied to learning new digital processes. You should map your knowledge and see if you already have knowledgeable personnel in the company. Or think do you want to outsource completely or partly.

Mentoring support

One option is to use mentoring initiatives. Mentoring can boost innovation, enhance creativity and ideation and assist with capacity building. It may improve connectivity between tourism enterprises, technology companies, the arts and cultural sector, and other start-ups. Mentoring reduces the distance and improves the timeliness, of advice between those that have the expertise and those that need to learn. It can be a prolific co-operation between two or more companies where all parties deliver something the other needs helping their businesses thrive. It is smart to keep in mind to not to bite off more than you can chew and here the importance of networking stands out.

Finance

Lack of finance is identified as the number one obstacle preventing the implementation of digital technologies in tourism businesses. There is a significant concern amongst tourism businesses that the cost of implementing new digital technologies will be more than the gains. Analyse what technology your business can benefit from and make a decision. You can start by taking up a few platforms and expanding from there according to the set budget. It is important to remember to build digital marketing around your customers and choose channels accordingly. Thinking which technology to choose to reach the specific customers and which technology brings the most value to the customer in return. Starting smaller and smart saves time and assets.

Policy support

You need policy initiatives and actions to support business awareness of new technologies. They make clear the benefits of their implementation. Your business requires support in business planning and decision-making with regards to new technologies to ensure efficient utilisation. Do research on the available technologies and find what best suits your needs and what serves your customers best. Find out what is out there, any new innovations that would suit you and your customers´, needs. Choose only appropriate, functional and effective technologies.

Infrastructure

The geographic location of tourism enterprises greatly affects their access to adequate digital infrastructures. In developed countries, connections tend to already be adequate even in more remote areas. Still, businesses in urban settings benefit from modern wireless and fibre broadband connections. The infrastructure in rural or more remote areas can be less developed. Getting your software and connections up-to-date is important so that the basic tools at hand are functional.

Are you (all) motivated enough?

Different personal motivations, corporate culture and managers attitude affect the willingness to adopt technology, which is traditionally explained by the technology acceptance model (TAM). Ritz et al. studied the combination of TAM and the do-it-yourself (DIY) behaviour model in adopting new technologies. They stated that small businesses are less likely to participate in digital marketing than larger businesses³. TAM evaluates the ease of use and perceived usefulness of the technology. DIY motivators are economic benefits and lack of quality in existing services. In other words, managers should make the use of technology easy and the economic advantages and other benefits that come with technology apparent. This applies to themselves and communicating this to the whole team.

Alford and Page found out that small business owner-managers have a positive attitude and a real appetite for adopting technology for marketing¹. If you can channel this attitude successfully to motivate your employees you may be able to get staff involved in creating more innovative marketing content. This may serve a wider spectrum of customer expectations that exist towards your business.

So what is customer value and how it is created using technology?

According to Holbrook customer value is the basic foundation for everything in marketing. It can be defined as a preference, experience, interactive and relativistic, that is comparative, personal, and situational⁴. Komppula and Gartner talk further about desired value, which refers to the value that customers want to receive from products or services and their providers. Received value refers to the value customers have actually experienced through specific customer interactions⁵. Zeithaml encapsulates the definition by stating that value represents “a trade-off of the salient give and get components”⁶. All the definitions explain what exactly is the customer value that is created when a business can answer to the needs and wants of their customers.

The product of tourism business is a service that can be thought of as an intangible object which is more difficult to define and label. The service involves emotions, hopes and dreams and the pursuit of satisfaction. As Neuhofer et al. state in their study experiences constitute the essence of the tourism industry⁷. Holbrook continues that therefore customer value resides neither in the product purchased, in the brand chosen, nor the object possessed but rather in the consumption experiences outcome. People desire not simply the product but rather what is behind the product or service; the satisfaction the experience brings through activity⁸.

It is all about the experience

It is important to understand the consumer´s journey. How they experience it throughout all the phases of tourism experience which happens before, during and after the service situation as stated by Opute et al⁹. For a business aiming to achieve improved customer experiential value at a profit, the focus should be to leverage digital technology. This is to fundamentally optimise customer satisfaction. That is why the focus should not be limited to leveraging digital technology to ensure more effective service design and implementation. It should also be about leveraging such technology to drive an integrated implementation strategy. The strategy should recognise the importance of reaching out to customers. This involves engaging actively with them to access customer ideas and suggesting cues for improving their overall experience.

Opute et al. studied the role digital technologies play in tourism customer service experience. They continue by stating and summing up that tourism service providers can leverage digital technologies to drive a customer engagement focus. Doing this higher customer experiential value is reached. At the same time, customer retention and organisational performance improve. Achieving these targets requires the business to interactively engage with customers. By leveraging customer-generated information to fine-tune tourism service design and delivery leave an indelible and memorable impression in the mind of the customers. Customers may attach a high experiential value to a tourism service episode. When this happens they are motivated to undertake a repurchase or re-endorsement of the service. In addition, they want to share their positive service experience afterward⁹. This reminds the business to put emphasis on the follow-up of the customer visit on the marketing plan.

Ready, engage, interact!

Interaction is what consumers want. They want to be recognized and treated personally. Businesses have to keep in mind that consumers are not completely dependent on communication with the business. They also want to communicate with other consumers and a smart business creates these opportunities. This brings great value to the customer. Customers want honesty and transparency and they go where they can get it. As Prahalad and Ramaswamy ¹⁰found out the consumers can choose the firms they want to have a relationship with. The consumer base this on their own views of how value should be created for them. This reminds the starting tourism business to be humble and how important it is to engage and answer to the customers’ expectations.

Technology adoption has been successful when your business uses technology that is suitable for your strategy. If the technology produces measurable customer value it can be said your business has been very successful. Tapping your digital marketing efforts on all the stages of the tourism experience you maximise the effect and benefit of technology. This way your business ends up creating superb value for the customer.

Acknowledgements

This blog post was written as a part of the Information Technology in Tourism Business course at the International Master’s Degree Programme in Tourism Marketing and Management (University of Eastern Finland Business School). Read more about the programme at https://www.uef.fi/tmm

References

¹Alford, Philip & Page, Stephen John. 2015. Marketing technology for adoption by small business. Faculty of Management, Bournemouth University. The Service Industries Journal, 2015-07-07, Vol.35 (11-12-9, p. 655-669. ISSN: 1743-9507 DOI: 10.1080/02642069.2015.1062884

²Dredge, D., Phi, G., Mahadevan, R., Meehan, E. & Popescu, E.S. 2018. Digitalisation in Tourism: In-depth analysis of challenges and opportunities. Low Value procedure GRO-SME-17-C-091-A for Executive Agency for Small and Medium-sized Enterprises (EASME) Virtual Tourism Observatory. Aalborg University, Copenhagen. © European Union, 1995-2019. Available at: https://ec.europa.eu/growth/tools-databases/vto/documents?page=1. Retrieved 25.10.2020.

⁸Holbrook M.B. (Ed.). 1999. Consumer value: A framework for analysis and research. London (UK): Routledge.

⁴Holbrook, M. B. 2005. Customer value and autoethnography: subjective personal introspection and the meanings of a photograph collection. Journal of Business Research, 2005-01, Vol. 58 (1), p. 45-61. ISSN: 0148-2963, DOI: 10.1016/s0148-2963(03)00079-1

⁵Komppula, R., & Gartner, W. C. 2013. Hunting as a travel experience: An auto-ethnographic study of hunting tourism in Finland and the USA. Tourism Management (1982), 2013-04, Vol.35, p. 168-180.35. ISSN: 0261-5177, DOI: 10.1016/j.tourman.2012.06.014

⁷Neuhofer, B., Buhalis, D., & Ladkin, A. 2014. A typology of technology‐enhanced tourism experiences. International Journal of Tourism Research, 2014-07, Vol. 16 (4), p.340-350. ISSN: 1099-2340, DOI: 10.1002/jtr.1958

⁹Opute, A. P., Irene, B. & Iwu, C. G. 2020. Tourism Service and Digital Technologies: A Value Creation Perspective. African Journal of Hospitality, Tourism and Leisure, 2020-03-01, Vol. 9 (2). EISNN:2223-814X

¹⁰Prahalad, C. K., & Ramaswamy, V. 2004. Co-creation experiences: The next practice in value creation. Journal of interactive marketing, 2004-01, Vol. 18 (3), p.5-14. ISSN:1094-9968, DOI: 10.1002/dir.20015

³Ritz, Wendy, Wolf, Marco & McQuitty, Shaun. 2019. Digital marketing adoption and success for small businesses: The application of the do-it-yourself and technology acceptance models. Journal of Research in Interactive Marketing.2019-06-16, Vol.13(2), p.179-203. ISSN:2040-7122. DOI: 10.1108/JRIM-04-2018-0062

⁶Zeithaml, V. A. 1988. Consumer perceptions of price, quality, and value: a means-end model and synthesis of evidence. Journal of Marketing, 1988-07-01, vol. 52 (3), p.2-22. ISSN:0022-2429.DOI:10.1177/002224298805200302

5 key learnings for a destination marketer

In the spring semester 2020 I attended a very interesting course called Destination Marketing, which is a part of the Tourism Marketing and Management master’s programme. The course gives an overview on different aspects of destination marketing in the rapidly changing world and offers interesting content for anyone interested in destination marketing. Here are my 5 key learnings from the course:

Destination vs a company

Traditional marketing approaches are a good basis for destination marketing. However, destinations are not companies, which makes a huge difference in their marketing. Every destination marketer should keep in mind a few differences between destination and company marketing. Marketing strategy for a company does not necessarily fit the needs of a destination.

Whereas a company can control basically everything they do in terms of marketing, a destination management/marketing organization (DMO) has very little control on the execution of a marketing strategy. A destination is a complex entity consisting of different actors and stakeholders, which are not bound to any strategies or plans made by the DMO. A DMOs goal of course is to make a marketing plan that benefits all. Still there might be companies in the area that have completely different goals and business objectives. Those are very likely not to follow the strategy by the DMO.

Probably all destinations try to communicate some kind of brand. A company can control quite well how they communicate their brand to the customers. The image of a destination among visitors is however strongly dependent on the encounters between the visitors and the local operators. A DMO can’t control the quality of the actual visitor experience.

Operant resources

Every destination has some tangible and intangible resources that it can use for competitive advantage. However, the resources as such don’t create competitive advantage. Firstly, operand resources, such as sun and sea, exist in other destinations, too. Secondly, the destination has very little control on them. There is nothing a destination can do to get more sunny days than it already has.

The potential sources for competitive advantage lie more in the interaction between the destination and its stakeholders. A destination must recognize, which are the potential competitive advantages it can create with stakeholder collaboration and how to do that. The knowledge and skills to do that are called operant resources. The heart of a destination’s competitive advantage lies In the operant resources. In conclusion, a destination marketer must understand the difference between the two types of resources and enhance the use of operant ones in the destination marketing. In many cases this requires the collaboration between a variety of different stakeholders.

Smart destinations and data sharing

Digitalization is inevitable in tourism business. It is changing also the function of destinations and how destination marketing and management organizations are working. Smart tourism and smart destinations are very popular concepts in tourism business of today.

The core of destinations has traditionally been something physical, e.g. attractions, activities and availability. Nowadays, technological aspects are more and more important. A more customer-oriented approach in destination marketing is needed. But it’s wrong to think that technology is all in all. After all, technology is just a tool, it’s not the core of destination marketing. Leadership, innovation and collaboration are also key issues if a destination wants to be smart. Real time engagement, mobile technology, online inventory and co-creation are just a few examples of the features of smart destinations.

Purchasability and online inventory have traditionally been a problem in many destinations. Luckily, destination managers have realized this and are working on making the buying of activities and other services easier online.

Another problem many destinations still face is data. One key feature of smart destination is the use of data that they are getting from customers. The problem here lies in the collaboration. It would be crucial for the individual tourism companies to share the data with other companies and the DMO. This way the whole destination profits from the data. In real life, most of the companies keep the data to themselves. This is quite understandable – many companies fear that they lose their competitive advantage against other operators in the area. Here the help of the DMO is needed – trying to change the attitude and view of the companies. Even though being competitors, the companies must still learn to collaborate with each other. That is the only way to a customer-oriented, smart destination.

Impact of consumer–generated content on the brand

Most of destination marketers recognize the importance of consumer–generated content in their marketing. Social media posts about the destination and online reviews by customers are free marketing and visibility for a destination. Destinations often encourage consumers to write something about their destination. The possible threats are in many cases taken into account. Consumers can post something negative, which of course is not desirable but with an action plan can be managed.

However, the impact of consumer generated content on the destination brand is something that destinations might overlook. Because of Web 2.0 and social media, destinations no longer are the major controllers over their brand and message. Nowadays, the branding content on the internet is based on interaction and participation of the consumers. Consumers can post whatever they like on social media, whereas in the past the destinations controlled the distribution of information. Nowadays, a brand can even be totally created in social media by consumer–generated content.

For destination marketers it’s important to notice that consumer–generated content does not necessarily match the brand that the destination wants to communicate. It can be totally different than marketer–generated content. For example, consumer generated content rarely includes the formal elements of the brand, such as slogans and logos. After all, those are important elements in marketer-generated content. What should the destinations do when the control of the brand is largely outside of the company?

Authentic content

Last but definitely not least I want to highlight the importance of authentic content. Internet and other media are full of marketing content created by marketers. From the highly scientific and empirical research we conducted on our lectures (discussing in the classroom), we got the results that traditional destination marketing videos are not interesting enough. No one wants to look at nice views with peaceful background music for longer than a few seconds. People are interested in authentic content with local people. Visitors don’t come to a destination with the main reason of spending money there but to learn something and educate themselves. This means that destination marketers need to shift their mindset from consuming to learning.

Onthe destination marketing course we had an interesting workshop with the CEO of VisitKarelia Jaakko Löppönen. He pointed out an issue with this approach that they as the destination marketers are facing: If the marketing material can’t be made by marketers and agencies but rather by the local people, who is willing to produce this content? And what kind of content should it be? The resources they as a DMO have are limited and often the more traditional content by agencies is the only option. This is an important question for us students as the future destination marketers to think about. We should totally forget the traditional destination marketing and focus on something new and innovating. Skills and knowledge to do that will be the competitive advantage of destination marketing and marketer of tomorrow.

Content marketing and how to harness it for your business

Content marketing is a necessity in today’s digital marketing field. It is also an effective tool, especially for small entrepreneurs, to reach new customers, build trust and increase site traffic. The key to success is planning content marketing that can answer three questions:

What are your customers’ need and desires?
Can you provide your customers with something value?
Can you keep them wanting more?

Here are a few tips to keep in mind when building your own strategy:

Who are your customers?

The customer is the key factor in raising profitability. As a result, it should be considered as the centre of all activities and decisions of your company. When creating content, segmenting your customers is the first step as it helps to identify your target customers, understand their behaviors, habits, and preferences. Consequently, it provides useful information to create interesting and engaging contents and to refine your marketing approach.

Tips to find out the searching trends of customers after segmenting your customers:

Use analytics features on social media platforms (Facebook, Instagram, Google Analytics) to get an overview picture of customer behavior within the online environment.
Connect face to face to get some truly unique insights from customers.

Which content marketing formats have the most impact on your customers?

Choosing popular content formats is the second step to connect with customers. Online content format is not just text. It can be under different forms: images, videos, infographics, e-books, case studies, webinars, press releases, competitions, quiz, reviews or case studies… The format of the content should be compatible with the main goals of the content, which are to entertain, to inspire, to educate and to convince. For instance, if the purpose of the content is entertaining, the suitable formats could be quizzes or contests while if educating is your purpose, e-books, instructions will be the reasonable selection. Picking the proper content format helps the potential customers engage, share, learn, become loyal customers or even entice new customers.

How to write an attractive content for online customers?

Reading habit is different between online and offline content. The style, length or structure of the content in different channels has an enormous impact on attracting customers. For instance, reading a long article in a newspaper is much more breathable and enjoyable than in online format.

Tips to achieve successful content writing:

Stay inspire. Pick some engaging topics. You can refer to your competitors or using tools to query the keyword list as this way is good for creating content based on the demand of customers.
Start with a direct topic or opening sentence to entice customers’ attraction and satisfy what they are looking for.
Write the content under the customer’s position and focus on content purposes. Avoid adding too much sales messages in the content.
Be consistent in your writing style to make customers immediately link to your brand, to build a relationship with your customers and to differentiate from your competitors.

How to promote your content online?

Spending time to promote your content online is as important as to create content because it helps to reach a larger audience.

Before creating a content promotion plan, choosing suitable channels to manage is important. There are three types of channels which should be considering: Owned, Earned and Paid channels. Promoting content on owned channels such as websites, blogs or social media sites is a typical starting point as it is a flexible and low-cost option. Earned channels help boost the customer reach of content and also add credibility. Whereas paid channels allow you to target your goals to specific customers.

Once choosing which channels to promote your content, creating a content calendar is the next step. A content calendar will organize your content marketing activity and make your content process consistent and efficient.

Tips to reach the full potential of a content calendar:

Combine a variety of marketing channels to work together for marketing strategies.
Make the plan achievable by using realistic time frames or highlighting special days or holidays to offer seasonal content
Use online tools to save your time. It will help automate the content creation, distribute process and easy to keep track of the plan
Stick to customers at each stage of calendar

Are you looking for an international tourism-focused master’s degree programme in business? Tourism Marketing and Management programme by University of Eastern Finland provides a unique learning experience for students who have finished their bachelor’s degree and are looking for new skills and knowledge in developing tourism industry in a sustainable way. Read more about the programme at www.uef.fi/tmm.