Month: April 2016

IntelligenceIntelligence methodsStrategyStrategy planning & execution

Destination Intelligence 3.0: Implementation key success factors

In the implementation process of a market intelligence system, there are some key success factors that should not be overlooked:

  • The support of the direction in the definition of objectives, functions and resource assignment, and the participation of all the departments whose collaboration is needed.
  • Training of the potential collaborators and users about the utility and the scope of the MI to foster their capacity of bringing value and a collaborative attitude.
  • Design of an incentive system to stimulate the contribution of the collaboration of the people and departments whose inputs are needed: definition of needs, product definition and results feedback.
  • Fostering informal relationships to achieve the best possible understanding between the MI and several collaborative departments and users.
  • Adequate structure, coordination and delivery process.
  • Starting with modest objectives and obtaining visible results.

Would you consider any other key success factors?

Business model innovationCollaborative business modelsCollaborative cultureMarketing 3.0Strategy

Destination Marketing 3.0: partnering for the common good

As well as the whole marketing strategy, the shift towards a Marketing 3.0 approach entails a transition process in the business development strategy.

The starting point of developing the new business development strategy is marketing the mission-driven stories to and through the channel partners, as these hold good reputation and their power of influence needs to be leveraged especially in the early stages of the marketing 3.0 development in the destination. Such channel partners are also likely to contribute in the mission definition, market intelligence and in product development through co-creation. Channel partners are to be mainly travel agents, but retail partners also have to be taken into account for the sales of merchandising products.

Partners should be selected according to their mission and values, to make sure they hold enough credibility to deliver the stories and also to increase the likelihood of long-term collaboration. Furthermore, mission driven partners are more likely to build a relationship based upon fairness, transparency and win-win attitude. Although we should prioritize mission driven channel partners, conventional channel partners could also be taken into account especially during the transition process to the full Marketing 3.0 system.

As the destination gains reputation and brand awareness, it is expected to expand its network of brand ambassadors beyond the initial channel partners, especially throughout many communities, which are to become the main “business development agents”. In this way, the Destination Marketing shifts progressively from “Push” to “Pull” strategy, as long as the compelling stories become popular in the social networks and raise the destination’s brand awareness.

When designing the partnership strategy, we should assess the target partners according to the kind of value they are likely to bring in order to define the priorities over the short and long term:

  • Channel partners bring in market insights for the mission definition & product development, and their circle of influence, who are likely to become the first creative activists. They are the key marketing partners at the outset of the development process.
  • NPO brings volunteers who collaborate in the mission accomplishment. They also bring along brand integrity as they hold the best reputation among the communities. They are likely to be engaged as storytellers and brand ambassadors. They are of great strategic importance over the long term, even if they bring in little profit.
  • Communities where creative activists play the role of opinion leaders. These are to become the bulk of the destination’s market over time.
  • Schools interested in educating students in the values of environment protection, socio cultural transformation and poverty alleviation, have the opportunity to actively participate in mission driven activities and to exercise their creativity participating in some sections of the open innovation. Furthermore, students may be trained on how to tell stories as a communication skills development exercise to be used for mission driven purposes.
  • Other groups might be seniors, special interest associations, etc.

Do you envision any other type of partner apart from the mentioned ones?

Business model innovationCollaborative business modelsCollaborative cultureCulture changeInnovative culture

Destination Models 3.0: organizational structure

The platform’s organizational structure should rather have a horizontal profile to empower leadership development within the team, but also as a starting point to create a culture throughout the stakeholder ecosystem based upon empowerment, trust, collaboration and innovation.

Even if the organizational structure may differ among destination models 3.0, there are some roles and competences which are likely to be necessary in all of them, as we have seen with the key activities:

  • Managing director: in charge of leading the executive team, the corporate strategy direction, and platform’s public relationships. He or  she would be the leader of the business model innovation area of the open innovation system. This would correspond to a visionary with strong leadership skills and great capacity for understanding all stakeholders’ needs, motivations and concerns, in order to lead the business model innovation with the smoothest possible manner.
  • Experience development director: in charge of leading the “experience development” section of the innovation system, bringing in ideas to inspire the development of new experiences, organizing creativity challenges and events, coaching partners in their experience development efforts, and controlling that all experiences comply with the mission guidelines. This would be a professional with strong leadership skills, imagination and coaching skills.
  • Business intelligence director: in charge of collecting, analyzing and communicating the intelligence data following the key performance metrics’ parameters, as well as the market intelligence obtained through the open innovation ecosystem and external sources. This would be an analyst profile with good leadership skills to establish relationship with all kinds of stakeholders who ultimately provide the intelligence data to nurture the monitoring system.
  • Operations director: in charge of leading the operations manager team (Partner integration & HR manager, Quality manager, IT manager and Maintenance manager). This would correspond to a professional with strong leadership skills, conflict resolution skills, capable of coordinating a complex operational system in constant evolution, where it is necessary to attend and understand multiple sensitivities and concerns to properly address all operational challenges.
  • Quality manager: in charge of controlling and assessing the service quality of all partner suppliers through customer reviews and mystery tourist system, training and coaching on service quality standards, and determining the rewards and penalties applicable to all service employees and partners. This would be a professional with strong capacity for coaching and training, as well as for developing the methodology to assess the service quality performance and the incentive system.
  • Partner integration & HR manager: in charge of assessing candidate partners prior to their integration into the business model. As a recruiter, should be able to assess candidates’ competences and fit potential into the business model culture, determining also the skill development program to be followed if necessary. This would rather correspond to a human resources psychologist profile with strong skills in analyzing candidates’ competences and mindset.
  • Marketing director: in charge of the marketing strategy direction and leading the marketing team (Social media manager, Content marketing manager and Booking & Customer service manager). He or she would also lead the story creation section of the innovation system, and would be in charge of all marketing tasks not corresponding to any of the managers. This would correspond to a marketing professional with strong leadership skills, broad marketing vision and imagination.
  • Content Marketing Manager: in charge of leading the content & design creation section in the innovation system and assisting the Marketing Director with the storytelling section in inspiring and invigorating the creation of stories, designs and other contents, and selecting the best ones to be used for marketing purposes. This would correspond to a marketing professional specialized in content management, with excellent criteria for identifying good contents to be used for marketing purposes.
  • Social Media Manager: in charge of social media marketing campaigns and controlling online reputation of the destination’s brand. This would correspond to a marketing professional enthusiast about social media marketing, with imagination and strategic orientation to leverage the marketing content creation to the utmost of its potential throughout the social media networks.

Other positions such as the Financial Controller, Booking & Customer Service Manager, IT Manager or Maintenance manager are not described as their functions would be the usual in most companies.

This section should list all kinds of resources to start-up the business, as well as foresee the new resources to be acquired or attracted as long as the platform is expanded. This should also encompass the organizational chart with the job description of all executives.

Do you miss any relevant position or relevant role within the job descriptions mentioned above?

Collaborative business models

Destination Models 3.0: Key resources

There are four types of key resources to be considered in a destination model 3.0: physical, intellectual, human and financial:

  • Physical resources are mainly those related to the platform infrastructure, which account for the land, infrastructures, facilities and business units that are necessary to start operating and developing the business model. They are the ones that must be acquired or integrated to the business before attempting to convince new partners to join the platform. It is necessary to define and dimension the needed facilities, infrastructure and business units according to different levels of business activity, in order to scale up the destination’s service capacity as long as the tourism flows increase over time.
  • Intellectual resources are mainly the outcomes of the open innovation system: experiences, stories, marketing contents and designs, and insights and ideas to revamp the business model over time. In many cases, the destination may already have some valuable intellectual resources, such as a reputable brand or unique intangible cultural assets (traditions, stories, gastronomy, or other experiential know how), which should be leveraged to the utmost of their potential. These are to be generated through empowerment, facilitation and an incentive system that truly understands and adapts to the motivations of all stakeholders.
  • Financial resources are critical not only for the platform’s investments in facilities, but also for funding the micro-entrepreneurs in their business ventures. This will require two different approaches: for the new facilities and infrastructures the business model should look for investors (see section 3 on selling the vision to shareholders/investors), whereas for the micro-entrepreneurs the business model should look for financial institutions providing micro-loans. Alternatively, the platform could obtain the funds through investors or “macro-loans” and provide the micro-entrepreneurs with subsidized loans out of these funds. A financial analysis of the model should estimate all the needs for funding, as well as the expected profitability to convince investors.
  • Human resources are all those who contribute in the generation of intellectual resources, those who participate in the integrated businesses of the platform, and the team of executives who lead and manage the platform. As mentioned in relation to the performance standards, it is critical to identify the key competences the platform needs to develop the business model to the utmost of its potential. Such competences should be described not only for the organizational structure of the platform’s executive team, but also for establishing the partner’s selection criteria and for determining the key talent to be attracted to the open innovation system.

Would you consider any other relevant resource within the mentioned categories?

IntelligenceIntelligence methodsStrategyStrategy planning & execution

Destination Intelligence 3.0: Implementation stages

The implementation of a MI system in an organization should be carried out in 4 stages:

Preparation: selecting a responsible for leading the MI unit, availability of the necessary technological tools and presentation to the collaborators and users.

Launch: pilot project to test and demonstrate how the system works to the users and collaborators, ad-hoc queries and informal feedback.

Consolidation: setting a MI product portfolio, application of a consistent MI analytical scheme, well informed and exigent users, and formal evaluation process.

Extension: integration of the strategic and tactic intelligence; MI culture integrated in the organization; MI based on dialogue.

The MI unit may have a specific department or be integrated in the marketing or strategy department. It may count with external consultants but most inputs should come from the local marketing units in the outbound markets.

The MI cycle has 5 phases, for which there is a set of necessary competences:

Obtaining MI queries:

  • Identification of decision makers and their needs of information
  • Interview, communication and presentation skills
  • Understanding of people and the decision maker’s orientation
  • Knowledge of the organizational structure and corporate culture
  • Needs detection and processing through the system

Capturing information:

  • Knowing primary and secondary sources
  • Knowing methods to access the sources
  • Manage the sources
  • Knowing how to guarantee the reliability of the sources
  • Identifying biases in the information
  • Capacity for assessing assumptions
  • Knowing the ethics principles in the information capturing

Analyzing and summarizing information:

  • Recognition of the interaction between the information capture and its analysis
  • Use of inductive and deductive reasoning
  • Knowledge of the basic analytical models
  • Knowledge of the reason why and the adequate moment to use each analytical model
  • Recognition of information gaps

Communicating the intelligence:

  • Presentation skills.
  • Empathy and advising skills.
  • Organization and presentation of the findings according to the receiver characteristics.
  • Graduation of the intelligence delivery.

Intelligence management, feedback and results evaluation:

  • Definition of the intelligence function.
  • Explanation of the role of the MI and the intelligence cycle.
  • Knowledge of the MI unit models, its structure, organization and resources.
  • Knowledge of MI evaluation techniques.
  • Capacity of creating a MI culture within the organization.

Would you consider any other step in the implementation process or another necessary competence?

Co-creationCollaborative business modelsCollaborative cultureInnovationInnovative culture

Destination Marketing 3.0: designing life-changing experiences

When designing life-changing experiences, these are to be thought of from the view that their life-changing purpose is what makes them unique and more attractive, not just a matter of social responsibility, because the tourists really want to experience the transformation.

There are many stages to follow when designing the life-changing experiences:

  • Define constituents, the receivers who benefit from the activity (women, children/youth, elderly, minorities, BoP, tourists, etc.)
  • The life-changing effect that the experience intends to create for the tourists (raising awareness about certain issue, opening mind, etc.)
  • Try to include storytelling exercises as a part of the experience, as a strategic part to foster the generation of new stories
  • The activity through which the experience is delivered
  • The necessary resources and preparation to make it successful
  • Carry out the feasibility plan of the product
  • Get feedback from creative activists after living the experience, on how to improve it.
  • Pay attention to insights and inputs delivered through the open innovation system, in the product co-creation contests and on an ongoing basis –reviews, free contributions, etc.-.

There has to be a Product Manager responsible for controlling the adequacy of the ideas being developed, to help improve & refine them, and to invigorate the open innovation system. The Product Manager would also be in charge of selecting and managing channel partners, benchmarking and customer feedback.

Beyond the tourism programs, the Product Manager should also be responsible for developing volunteer programs in cooperation with NGOs, to reinforce the mission driven positioning of the destination and to add human power to accelerate the mission accomplishment.

The co-creation process is to be carried out in a very different way depending on whether we talk about DMC or DMO, as well as depending on their size and budget. For instance, an open innovation system is likely to be suitable only for regional or nationwide DMOs in cooperation with the destination’s DMCs. For minor DMOs or DMCs, co-creation should be developed through workshops.

What kind of life-changing experiences do you envision?

Business model innovationEnvironmental sustainabilityStrategyStrategy planning & executionSustainability

Destination Models 3.0: Key activities & management (IV)

Monitoring the evolution of the destination’s activities through a system of key performance metrics which are to indicate the need for reorienting efforts or strategy in case the results do not meet the strategic goals. There should be many KPI sections:

  • Indicators tracking the outcomes of the open innovation system, like mission-driven initiatives, business model innovation discussions, as well as marketing ones like written stories, shared contents and other social media metrics.
  • Indicators tracking the expansion of the business model, like number of innovation system members (considering various member categories), partners by category, overall tourism arrivals, overall revenue, revenue per geographical market, revenue per market segment, average revenue per tourist, average length of stay, merchandising sales, occupancy rates, satisfaction rates, etc.
  • Indicators to characterize the evolution of tourist demand, identifying the behavior patterns for every market segment, like average expenditure, average length of stay, type of accommodation, activities carried out, type/size of group, trip organization, marketing channels, etc. These are also to gain a better understanding of tourists’ needs, concerns, motivations and aspirations.
  • Other indicators tracking the evolution of the business model such as the kinds of integration formulas to which most partners adhere (indicating the confidence inspired by the model), profitability of the business units, number of direct and indirect employments created, training courses attended and successfully completed by employees and partners’ employees, etc.
  • Indicators tracking the accomplishment of social and environmental goals, further explained in the section 2.12.

Further, it is necessary to explain the performance standards the model should comply with, the key metrics to monitor them, and the key competences needed to comply with such standards.

This section should explain in detail the operational system of all critical activities nurturing and sustaining the competitive advantages of the destination model, as well as the platform management system, stating the performance standards and the metrics to monitor the model’s evolution.

Do you miss any key activity to ensure its proper functioning? Would you add any other type of KPI?

Business model innovationCollaborative business models

Destination Models 3.0: Key activities & management (III)

Among the management activities, there are some to be highlighted for their critical importance:

  • Service quality control on all service suppliers would be carried out through the reviews and ratings of customers plus a “mystery tourist” system to complement it and to assess the needs for training and coaching, especially for the new entrepreneurs. This would be complemented with an incentive system to stimulate service and skill development attitude, as well as a penalty system for those service suppliers who do not comply with the service quality standards.
  • Service booking system for activities and accommodation, which at the same time serves as the online platform where tourists write their reviews and rate all the services they have used. Such booking platform should be adapted for smartphones to allow visitors do their bookings and reviews as they experience the destination.
  • Partner selection and integration following the partner development strategy, which establishes the target partners’ profiles with precise criteria, and the integration formulas and procedures they may choose in order to become destination partners.
  • Partners’ shifting through integration formulas, to accommodate the integrated partners who wish to change their integration status, upon complying with the specified regulations. This is explained in detail in the section 3.
  • Scanning the market environment in search for market trends, opportunities and threats in the outbound markets that may lead to rethink the business model. This should be done through partners’ collaboration in the open innovation system and ideally through a nationwide market intelligence system delivering information to all its local destinations. This will be further developed in the upcoming Whitepaper “Envisioning destination intelligence 3.0”.

Do you envision how this would work? What kind of obstacles or challenges do you foresee?

IntelligenceIntelligence methodsStrategyStrategy planning & execution

Destination Intelligence 3.0: Results and output types

Apart from improving the conventional market reports, the market intelligence allows to obtain the following kinds of outputs:

  • Internal reports to support strategic and operational planning.
  • Segment reports for many markets.
  • Newsletter about the evolution of the outbound markets.
  • Benchmarking and new trends reports.
  • Qualified database with detailed profiles of tour operators and other potential partners
  • Qualified database of media, freelance journalists, internet portals, forums, blogs, social networks, segmented by product.
  • Ad-hoc reports.

The MI will be used by staff at all levels, from the Managing director to the Product Managers. Moreover, considering that the MI system is to benefit all the regional tourism sector, the outputs may also be delivered to the operators and local tourist boards.

One of the key success factors of a MI system is the rapidness in the delivery of the outputs, as an essential part of the MI value stays in having the intelligence data before your competitors. For that purpose, the system should provide outputs of small dimension (news, articles, summaries) and fast production that allow its fast delivery process to the users.

For the exchange of information and its distribution to the users, there should be a technological platform like an intranet from which the users could download the MI reports.

Do you envision any other kind of research output or format?

Co-creationCollaborative business modelsCollaborative cultureCulture changeInnovative culture

Destination Marketing 3.0: Product development through co-creation

Co-creation is the new approach to product development. Tourists want to personalize the experience according to their own unique needs and desires. Destinations provide a platform experience as of a generic product, which is somehow customizable by tourists, and by observing how they customize their experiences, the platform eventually develops a portfolio of experiences customized to the needs and motivations of various types of tourists, though still flexible.

Product co-creation is developed mainly through the open innovation system, where stakeholders participate motivated by the will to contribute to the mission accomplishment, and also by the will to showcase their creative skills and gain reputation among the community. Marketing 3.0 intends to leverage these motivators to foster co-creation of experiences and continuous improvement in collaboration with the local service suppliers to keep on enhancing the destination’s offered value.

The co-creation takes place in a collaborative platform as part of the open innovation system where locals may offer their experiences and they receive reviews, ratings and advice from destination product managers on how to make it better. To train stakeholders in the co-creation process, special workshops could be organized, where the key factors to successful product development are explained.

To create life-changing experiences, contributors should start by gaining a deep understanding of the mission statement as a basis for discerning what kind of experiences could be suitable. Further, by listening to stories they can understand what kind of experiences create a life-changing impact on the receivers and thus inspire new experiences by leveraging the contributors’ imagination from the open innovation system. The fact that brand enthusiasts are empowered to participate in the co-creation process spurs their commitment and their will for spreading the stories, as they are also willing to let everybody know about their contributions.

What main challenges do you foresee in the co-creation of tourism experiences?