A lot has been written about how to shift from a marketing system based on new customer acquisition towards a system focused on building a pool of loyal clients and leveraging their recommendations. This approach works for many businesses, but not so well for the majority of the tourism businesses –although it does in some cases – as long as tourists visit different places during every holiday. Most of the small or medium accommodation facilities are nowadays marketed through booking websites such as Airbnb, Expedia, Booking, etc. and charge very high commissions that seriously harm the business profitability. This is a clear example of customer acquisition based marketing.

Therefore, as long as there is little room for customer loyalty for the average tourism business, namely accommodation facilities, how can a business leap forward towards a more profitable marketing system? The key answer is building competitive advantages to set your business apart from competitors, based on relevant value related to the needs and motivations of your target clients. This starts with a thorough market research, which should ideally be supported by the destination’s DMO, as explained in the White Paper “Envisioning destination intelligence 3.0”. Otherwise, customer surveys and benchmarking may also provide useful information. Market intelligence helps find out the specific needs and motivations of all market segments and niches and how to reach them.

In accordance with the characteristics of your facilities and destination, decide which market segments or niches are most appropriate for your business. The White Paper “The 5 competitive forces & business strategy” explains how to carry out this assessment process, taking into account both the potential capabilities of your business and the attractiveness of the targetable market segments.

In the process of building your competitive advantages to target specific segments, it is very convenient to research specific marketing channels – namely travel agencies and tour operators – that are somehow specialized in your target segments. They are some of the best sources of marketing intelligence on how to build the appropriate competitive advantages and position your business in the top list for your target customers. Needless to say, they are key players to access your target customers.

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In order to balance the demand seasonality, it is usually necessary to target many market segments, but beware of possible incompatibilities. It is important to assess the implications of adapting your facilities to every segment, and be sure that such adaptations do not exclude other strategic segments. Most of the competitive advantages should not be an inconvenient for any target, but bear in mind that there could be incompatibilities between some of them when you carry out the research.

Creating loyalty and generating good reviews and recommendations is not achieved just by complying with the customer’s expectations, but rather by exceeding them! It is necessary to offer some unexpected value that makes them feel good and creates memorable emotions. Regardless of the target segment, the best way to make your business stand out among others is by offering memorable experiences to your clients. Then encourage them – through content creation contests – and facilitate tools such as owned social media platforms or postcards, to share their experience with relatives and friends.

This is the most effective and efficient marketing for your business: let others explain how much they enjoyed being your client, and help them do it in a creative and original way that impacts the receivers of their message, providing a call to action for those who want to live the same experience. Such marketing is not only more cost-effective due to saving commissions, but it actually strengthens your market positioning and allows you to raise prices in accordance with the increase of the offered value. The White Paper “The Marketing Plan 3.0” explains in detail many of the ideas of this article.

Posted by Jordi Pera

Jordi Pera is an economist passionate about tourism, strategy, marketing, sustainability, business modelling and open innovation. He has international experience in marketing, intelligence research, strategy planning, business model innovation and lecturing, having developed most of his career in the tourism industry. Jordi is keen on tackling innovation and strategy challenges that require imagination, entail thoughtful analysis and are to be solved with creative solutions.

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