Category: Strategy planning & execution

Strategy planning and implementation methods

StrategyStrategy planning & execution

Tracking destination performance for the Competitiveness Plan

At the end of the Plan the key performance indicators are defined. As done in any Strategic Plan, every KPI is assigned with an accountable person in charge of its tracking and interpretation, a priority level to determine its relative importance compared to other indicators, and a frequency determining how often the indicator has to be measured.

The Observatory in charge of the monitoring service is likely to be the most appropriate agent to carry out the tracking of the KPI, in close collaboration with the Competitiveness Club, the DMO and representatives of the Government. For most of the programs, the only way is to carry out a survey on satisfaction asking the tourists about all the correspondent issues. The best moment to do so is when they are about to leave the destination, while at the check-in queue or waiting hall at the airport, for instance. Airports provide us with an excellent opportunity to target specific segments for geographical markets. Another good option is to do it in the hotel halls. The survey should ask about their satisfaction on every issue object of study, their assessment about it on a scale of 1-5, and the importance given also from 1 to 5.

However, there are some competitiveness programs for which specific KPIs can be designed. With regards to the cross-destination programs, this is the case of the following programs:

New flight connections: considering not only the connections themselves, but also the overall capacity (number of flights x airplane capacity). Consider also the capacity increase in the current connections.

Congestion, noise & air pollution: there are specific sensors to measure both noise and air pollution, and also to measure the number of vehicles transiting through a certain point. To count people, there have to be “counters” –persons- in the critical bottlenecks or hot points.

Human resources training: the attendance and successful compliance of the learning goals assessed through skill and knowledge examinations is the main way to measure the effectiveness of this program.

Accommodation upgrade & development: the number of new accommodation facilities built, as well as the number of facilities having been certified with a quality certification or a higher star rating should be the main indicator.

Eco-label system: the number of eco-labels certified for each kind of operator, as well as the number of certifications for each eco-label category for every type of operator, to measure both the environmental friendliness of every type of operator in percentage and intensity.

DMC incubator: both the number of micro-entrepreneurs working in the incubator and their business growth should be measured. Besides, also the time needed for them to be self-sufficient and abandon the incubator, as well as the training assessment should be considered.

Tourist offices & call center: in both cases the service demand should be measured, paying attention to what kinds of information are most demanded. Ideally, also the service demand concentration in certain hours should be measured to provide the adequate resources.

Destination APP: not only the number of downloads, but also other facts such as the number of content uploads by the users (photos, stories, etc.), creative reviews, map downloads, geo-localized deals received and accepted, etc.

With regards to the cluster competitiveness improvements assessment, the indicators to be measured other than by the tourists’ assessment survey are mostly those related to spiritual value, and so on the benefits for the local population and heritage:

Local inhabitants’ survey asking about their satisfaction on several issues such as:

·   Street & public spaces cleanliness

·   Employment & income

·   Pride about the destination

·   Destination model

·   Cultural heritage preservation

·   Noise & Air pollution

·   Congestion issues

·   Tourists’ behavior

·   Cultural life (events calendar)

·   Natural heritage preservation

Further, many other aspects related to the benefits for the destination should already be measured by the Government such as the unemployment rate and the average salary, or by the destination management such as the level of contribution to the open innovation system, the growth of the collaborative model, etc.

With regards to the aforementioned product programs, the correspondent KPIs could be:

Product clubs: number of created clubs, active participants in each club, and the product operators’ satisfaction with the activities carried out.

Product Quality labels: number of operators certified with every label created, product operators’ satisfaction, tourists’ satisfaction, and outbound operators assessment.

Benchmarking trips: number of trips organized, number of participants, and product operators’ satisfaction with the results.

How else would you measure the success of these programs?

Co-creationInnovationOpen innovationStrategyStrategy planning & execution

Enhancing competitiveness through open innovation

As explained in many previous blogposts, the Open innovation system is one of the key features that set destinations 3.0 apart from competitors. One of the outcomes of the innovation system is the generation of ideas for improving competitiveness at all levels: product, cluster and cross-destination.

Product

  • Ideation bank for developing new products
  • Product development contests
  • Forum discussions to detect weaknesses and new ideas
  • Professional advisory on improving product competitiveness

Cluster

  • Forum discussions to detect weaknesses and new ideas
  • Professional advisory on improving cluster competitiveness
  • Mission driven innovation challenges to tackle cluster competitiveness issues

Cross-destination

  • Forum discussions to detect weaknesses and new ideas
  • Professional advisory on improving cross-destination competitiveness
  • Mission driven innovation challenges to tackle cross-destination competitiveness issues

Further, it is important to remember that the Monitoring system is to gather information that eventually should help in determining competitiveness improvement priorities and orientating improvement direction. This information is obtained as a result of the following research goals:

  • Tourists’ needs, problems, and concerns in view of identifying insecurities and discomforts to be addressed through improvement or development of new services and facilities.
  • Tourists’ motivations and concerns to sense the convenience of developing new products or mission driven tourism activities.
  • Tourists’ opinions to pre-test ideas on new products or marketing initiatives, to ensure their viability and adequate development.

Beyond these outcomes, both the open innovation and monitoring system are flexible and so permanently open to add new features and activities to tackle new challenges in the most appropriate way, and so the variety of outcomes may increase constantly. The Whitepaper “Envisioning Open Innovation in destinations” is to explain further details on these issues.

How else do you think that the Open Innovation could contribute to enhance competitiveness?

StrategyStrategy planning & executionTourism marketing

Product competitiveness programs

Beyond the aforementioned recommendations for specific products or sites, these competitiveness programs should also be taken into account, as they apply to the whole product category:

Product clubs are voluntary associations of stakeholders related to the product category, working like a forum or think tank, and led by the DMO Product Manager responsible for the product category, with the following goals and functions:

  • Carrying out market intelligence research
  • Analyzing competitiveness gaps, marketing KPIs and weaknesses to overcome
  • Planning, funding and coordinating the marketing activities
  • Developing new products and improving product competitiveness
  • Monitoring the result of the marketing activities and product operations
  • Lobbying to solve problems affecting the product business
  • Training the local operators in marketing and management

Product Quality labels facilitate the identification of key attributes by the tourists to help them prioritize their visits. Obtaining a label entails complying with certain quality requirements that eventually encourage operators to improve product competitiveness. For instance, there could be labels such as “Gourmet restaurant”, “Charming village”, “Historical site”, “Boutique hotel”, etc.

The method to develop the Product Quality labels should be the following:

  1. Selecting the special labels to create
  2. Defining the requirements in cooperation with the Product Clubs
  3. Labels graphic designing
  4. Carry out communication campaign targeting local operators to adhere to the label
  5. Assessing interested operators on the requirement compliance
  6. Introducing the Product Quality Labels in the marketing materials

Benchmarking trips are organized by the Product Club for the destination product operators with three main goals oriented to improve product competitiveness:

  • Learn best practices from the best performing destinations and operators
  • Learn about the destination model key success factors and competitive advantages
  • Inspire operators with ideas on developing products, providing more value with less efforts

The benchmarking trip organization should consider the following steps:

  1. Identifying possible benchmarks: destinations and operators
  2. Studying every benchmark to figure out what can be learn from each one
  3. Choosing the benchmarks with the most applicable know-how to the destination

Which other product competitiveness programs would you consider?

StrategyStrategy planning & executionTourism marketing

Product competitiveness strategy: marketing & management

The product or site improvement program may regard some standard strategies to leverage its potential, increase the tourism flows and generate new revenue streams, such as:

Connection with other sites: arranging public transportation and sightseeing services to connect sites between them helps the visitor to have time to see more attractions.

Venue for events: some sites may be offered to hold special events such as weddings, concerts, cultural performances, exhibitions, etc. bringing in an extra source of revenue.

Accommodation: some sites offer an excellent condition to operate accommodation services, adapting an old building as a boutique hotel, for instance, to obtain a new source of revenue.

Price: depending on the improvements made, the price may be revised accordingly. It is also convenient to make a deal with the aforementioned smart card, discounts for groups, etc.

The priority need for one or another improvement is to be assessed by the consultants, though a survey to the tourists about their satisfaction on many issues and the suggested improvement needs is highly recommended.

What other type of generic marketing strategies would you consider to make it more profitable?

StrategyStrategy planning & execution

Product competitiveness strategy: infrastructures and services

Beyond enhancing the resources available and the correlated experiences, there are other issues more related to the discomforts and insecurities that need to be fixed sometimes, such as:

Signage: not only to arrive to the site but also to move around within it, good signage is essential to help the visitor get the best out of his or her time.

Food & beverage: even if it is not an essential part of the experience, it is necessary to provide visitors with the chance to buy snacks or drinks, offering a good range of products.

Personnel training: ongoing human resources education in the right attitudes and skills development is recommended to guarantee a good service.

Information: offering precise information to get to the site (website, leaflets, guides, etc.) is as much important as information about the site resources, itineraries, stories, etc.

Accessibility: sometimes there are sites isolated within their cluster, with limited accessibility due to poor public transport service. Services such as “taxi calling” can solve this issue.

Urban aesthetics: some elements such as benches, dustbins, public lighting are essential to keep the tourist areas clean and safe, as well as to provide comfort to the visitors.

Congestion: some sites suffer from congestion issues to be solved through regulated group sizes, scheduled visits to control flows, queuing time information, etc.

What other kind of generic infrastructures and services would you consider to reduce efforts in a tourist attraction?

StrategyStrategy planning & executionTourism marketing

Product competitiveness strategy: resources & experiences

Beyond the development programs to create new products, there are also programs to improve the current products’ competitiveness. In this point, however, it is also necessary to talk about product competitiveness strategy, as the programs are in fact a concrete idea as a result of the product improvement strategy.

The product improvement strategy follows the same methodology of the cluster improvement strategy: creating more value and reducing efforts, which ultimately means creating more resources, experiences and feelings to add value, and developing or improving infrastructures and services to reduce discomforts and risks. Furthermore, when assessing every product individually, it is also convenient to make management and marketing recommendations to attract more visitors and/or to increase their expenditure, reduce congestion problems, increase safety, and other practices to reduce risks and discomforts.

The following examples may better illustrate the product improvement strategy concerning resources and experiences:

Restaurants: adapting charming buildings’ spaces, gardens or terraces as a restaurant may be a very profitable way to create new experiences and revenue streams.

Souvenir shops: when the tourist is satisfied with the site experience, he/she often looks for some kind of object to remember that experience, or to have more information about it.

Creative activities: it is well known that many tourists are willing to take an active role in their tourist experience. Creative tourism is a new trend adaptable to many cases.

Animation: improving the atmosphere feelings may be achieved by integrating performing artists such as musicians or painters, adequate music and illumination, shifting from sightseeing to life-seeing.

Guided visits: either through audio-guides or tour guides, providing interesting information and stories about the site always enhances the value of the experience.

Decoration: the details make the difference between an outstanding experience and a normal one. All decoration elements should be carefully regarded to create an excellent atmosphere.

What kind of generic resources and experiences would you consider to improve a tourist attraction?

InnovationStrategyStrategy planning & executionTourism marketing

Product development programs

There are certain types of products that may be developed in many destinations:

  • Events calendar: there should be an Events committee in charge of designing an attractive calendar of events, both to cover seasonality gaps and to strengthen the value during the high season, when there is the toughest rivalry among destinations.
  • Theme routes: leveraging both material and immaterial natural or cultural heritage may be achieved by creating theme routes. These may consist of visiting places related to a story or a historical character, or just linking related resources.
  • Shopping streets: streets with a sufficient number of attractive stores could be marketed as shopping streets creating a brand, attracting new ones, and enhancing the stores service competitiveness to guarantee a premium shopping experience.
  • Attraction of DMC to the destination offering special interest experiences that are being developed in other destinations to broaden the product portfolio. Some DMCs know-how may be highly appreciated and even have a market prestige that attracts visitors themselves.
  • Souvenir product line: all destination brands may be leveraged through the creation of a merchandise product line, encompassing typical branded products (t-shirts, caps, etc.) and also genuinely local souvenirs related to the unique destination assets.
  • Destination smart card: specially conceived for city destinations, the smart card encompasses public transport allowance, free entrance to many sites and discounts for many other sites, along with some vouchers for restaurants and other services.

Which other product development programs would you consider?

 

Co-creationCollaborative business modelsInnovationMarketing 3.0Open innovation

Product development through co-creation

Beyond customization right before or during the experience, co-creation may take place in many different ways:

  • Co-creation workshops, organized as a creative and educational activity open to all stakeholders, which in turn may provide valuable ideas to develop products.
  • Product development contests, organized to promote contribution to the open innovation system providing elaborated ideas on how to develop new life-changing experiences.
  • Ideation bank contributions, permanently accessible as a section of the open innovation system, where innovation needs are posted, and solutions are submitted and voted.
  • Product Manager’s creation based on inputs from creative reviews and new stories, permanently inspiring and nurturing the marketers’ creativity.
  • Local service supplier creation based on own creativity, inputs from reviews and stories, and the technical support of the Product Manager.

The Product co-creation workshops play a critical role as both educational and productive events. There, Product Managers explain the product development process and the key success factors for creating life-changing experiences according to the destination’s mission. The workshops educate the attendants in the art of ideation and team working to generate and refine ideas leveraging all group members’ creativity.

Attendance should be mandatory for local DMC like the micro-entrepreneurs from the base of the pyramid, but also the participation of all other community stakeholders should be encouraged. Other interesting targets could be school students as part of their education, members of mission driven organizations such as NGO, etc.

Do you think of other ways to develop products through co-creation?

Business model innovationCo-creationInnovationMarketing 3.0Strategy

How to develop new products

Beyond the cluster’s and cross-destination conditions, product competitiveness is no doubt a key factor to consider in the overall assessment and strategy. Product competitiveness strategies entail sometimes developing new products and others just improving the current ones. In this regard, this section explains the key product development strategies and methods, some product development programs that are used in most destinations, and also the product competitiveness strategy and most common programs.

Developing new products is not an easy challenge. Once the product portfolio strategy is defined, the product categories to develop are established. Then, from the product category to the marketable product is where creativity and product development mastery make the difference. The main steps of the product development are the following:

  1. Conceptualization
  2. Business model design & test
  3. Feasibility study and assessment of social and environmental impacts of the product
  4. Business Plan
  5. Launch
  6. Monitoring performance & improvement

Even if the Product Manager is solely responsible for the product development, in Tourism 3.0, the co-creation and the ideas coming from the open innovation bring support in the steps 1, 2 and 6. Steps #1 and #2 are supported by the contribution of the co-creation workshops and the Open Innovation System through various types of contributions: professional and non-professional; whereas the step #6 is supported by the visitor’s creative reviews after their experience with the product.

The case of the life-changing experiences is where co-creation and open innovation play the most decisive role, due to their complex nature, as they have to provoke some kind of personal transformation in the visitor, far beyond the usual tourism experiences. Their development process is therefore more complex as well. The development of life-changing experiences entails the following steps:

  1. Starting from the mission as an inspirational mantra, and listening to related stories to better understand the life-changing idea, define the experience concept based on its life-changing goals (effects or impacts), the constituents of the positive change (those who benefit from the activity), and the activity behind the experience.
  2. Try to include storytelling training as a part of the experience, to generate new stories
  3. Business model design & test
  4. Feasibility study and assessment of social and environmental impacts of the product
  5. Business plan
  6. Launch
  7. Monitoring performance & improvement

In this case, the Product Manager has to supervise the adequacy of the ideas being developed through the open innovation, the product development contests and the co-creation workshops, to help improve & refine them, and to invigorate contribution. The Product Manager is also in charge of selecting and managing channel partners, organizing the aforementioned events, benchmarking and managing customer feedback.

Once the life-changing experience product has been launched, the performance is monitored and creative reviews are encouraged, along with the creation of stories about the experience. These two are the most inspirational sources for product improvement and new products development. The capacity of the product to be customized for every tourist makes it more productive in terms of stories created and creative reviews.

Would you consider other steps in the product development process?

StrategyStrategy planning & execution

Developing value for money

The value assessed by the rational mind is that which takes into account the services and service quality received in relation to the prices paid and overall costs. This is usually the least important of the factors to assess the destination competitiveness, but it should not be disregarded, as the importance of every type of value depends on the type of target, and price sensitive tourists abound. In this regard, it is important that the destination offers a range of services –namely accommodation- to match all targets’ budget. There are many different issues to consider when assessing both Service quality and price.

Service quality

Service quality may be defined as compliance with the client’s expectations in all kinds of services provided throughout the trip:

  • Transport: punctuality, comfort, schedule availability and adequacy, staff attention, added services like entertainment, food, etc.
  • Accommodation: staff attention, compliance with the rating system & quality certifications.
  • Food & Beverage: taste, variety, originality, healthy production procedures, quality of the ingredients, cleanliness of the premises, etc.
  • Activities: safety, staff kindness, compliance with sales information, etc.

Price

Price issues encompass many factors affecting the overall cost:

  • Currency exchange: both the exchange rate and commission may entail a significant cost
  • Package price: the bulk of the budget goes to transport and accommodation, especially when buying a holiday package
  • Tips: many countries are used to receiving tips in service businesses
  • Daily expenses: all costs related to daily life not included in the package, like meals, public transport, snacks, etc.
  • Shopping & souvenirs: this is sometimes one of the main activities or purposes of a trip, and so eventually accounts for a considerable percentage of the overall budget.

Improving cluster competitiveness is a complex challenge to tackle, as it entails a large array of variables which in many cases have to be coordinated. Further, it is important to know which of these factors are more and less important to our targets, to prioritize our efforts.

Do you think of other variables influencing the value for money?