Co-creationCollaborative cultureInnovative cultureMarketing 3.0Open innovation

Destination Models 3.0: Customer segments (I)

Beyond the targeting criteria according to the kind of tourism activities -nature, culture, sports, etc.-, the primary target destinations 3.0 intend to attract and engage is the so called “Creative society”. Creative people are the most expressive and collaborative consumers, and also those who are most active in the social media, thus connecting and influencing many other consumers and becoming a backbone in the local economies. They are trusted and admired within their community, and through their concern and awareness about the social impact of brands, they are to become our best brand ambassadors.

Because of their aim for self-actualization above other needs, and their desire to create and collaborate, they are the ones who are most likely to become engaged with our value proposition and to participate in co-creating experiences and stories for the destination. They are those searching for spiritual fulfillment on top of other motivations, and this is what unlocks the most of their creativity. Furthermore, they are trendsetters and change leaders within their communities. They are the new wave of consumers who move the society towards a more human centered world. They are Tourists 3.0.

In summary, the prototype of the “Tourist 3.0” could be described as someone who:

  • Is driven by the aim for contribution to make the world a better place, and for human spirit fulfillment.
  • Belongs to communities and social media networks, which are the main and most trusted source of information, and with whom shares knowledge and stories.
  • Likes to co-create and collaborate with other consumers in his favorite brands’ marketing activities.
  • Is concerned about the impact of tourism on the environment and the local communities.
  • Looks for authentic experiences through which he can develop new skills, learn about new realities, cultures, and ways of life, which open his mind and ultimately change or influence his life.

Have you heard of the Creative Society? Do you regard its related trends as futuristic or current?

Business model innovationCollaborative business modelsEnvironmental sustainabilityInnovationMarketing 3.0

Destination Models 3.0: Competitive advantage & Value proposition (II)

In tourism 3.0 it is essential to understand that the new marketing focuses on weaving values and mission within the business culture, which is reflected deeply in the experiences and stories marketing the destination, and ultimately obtains profits through the appreciation of the positive impact that the business has on the society, the environment and the culture. It is through the opportunity given to have this positive impact that destination models 3.0 target the stakeholders’ human spirit. Furthermore, by empowering all stakeholders to participate, they become accountable for the accomplishment of the mission.

Beyond the mission driven value proposition that sets destination models 3.0 apart from other tourism development models, it may be necessary in many cases to target non-mission driven tourists offering non-mission driven experiences to guarantee sufficient revenue streams all year round, or to partially subsidize the mission driven activities. In such cases, the model should prioritize the development of experiences that appeal to the affluent tourists and other segments or niche markets that contribute in balancing the demand seasonality, assessing also whether these tourists generate any additional negative impact either on the natural or social sphere.

In this section, there should be explained not only the competitive advantage(s) that sets it apart from other destinations and the portfolio of experiences it intends to offer to visitors, but also the vision, mission and its related goals, so long as they are the primary reason for which mission driven stakeholders are to get engaged with the destination.

Do you think we should consider anything else when defining the value proposition and the competitive advantage?

Collaborative cultureIntelligenceIntelligence methodsStrategyStrategy planning & execution

Destination Intelligence 3.0: Benefits of capturing intelligence in the outbound markets

The growth of the tourism business with emerging outbound markets and new destinations is drawing an increasingly competitive scenario with plenty of opportunities. Moreover, the markets are evolving rapidly with new business models, new communication & sales channels and new market segments.

This major dynamism, innovation and market fragmentation requires a systematic analysis to detect new trends, new key success factors, foresee its threats and take advantage of its opportunities. Furthermore, along the last years there has been a significant decrease on the tourism promotion profitability, which suggests the convenience of innovating in more efficient marketing strategies and tactics.

Market intelligence (MI) is a systematic process of search, selection, analysis and distribution of information about the competitive environment, recognized and accepted by all the organization and its stakeholders.

The market intelligence studies are to identify business opportunities and market trends, analyze competitors, their practices and strategies, and all the variables that affect the evolution of the competitive scenario in order to orientate the strategic planning.

The impact of the MI activities consists mainly of the support given to cost reduction decisions -including risk reduction on the decisions to make- and de discovery of opportunities and innovations that produce an increase to the value provided to the client. The knowledge generated by the MI may be summarized in the following points:

  • Detailed company profile of all potential collaborators.
  • Best practices in marketing, management, innovation and new business models.
  • Markets and segments attractiveness. Opportunities, market trends and evolution of all the key factors influencing business development and profitability.
  • Key information for the design, innovation and product development obtained from deep demand analysis.
  • Key information for the optimization of the company’s commercial missions in the outbound markets, as well as for the Tourist Boards.

At the end, this brings the following benefits:

  • Decrease in the risk of failure.
  • Business diversification with the penetration in new markets and segments.
  • Improvement in the competitiveness and the innovation process.
  • A revenue increase from the opportunities of which we take advantage.
  • A major profitability of the marketing investment.

Can you envision any other outputs or benefits of the market intelligence?

Business model innovationCo-creationCollaborative business modelsCollaborative cultureCulture change

Destination Marketing 3.0: Targeting tourists 3.0

Once the Mission, vision and goals are defined, it’s time to think about the necessary strategies to guide our efforts towards the goals. Prior to the mission statement, there has to be a marketing diagnosis to set the starting point from which we intend to achieve all these goals.

Beyond the conventional segmentation criteria according to geographical origin, sociological and motivational profile, the key target group to engage in order to succeed in the marketing 3.0 transformation are the creative activists, also referred to as creative society or tourists 3.0. The challenge is mainly expanding the network of mission driven activists and other like-minded contributors.

These kinds of tourists are more likely to be found in specific communities or social networks, for the conventional marketing channels are not likely to work. They are concerned about the impact of the tourism activity on the environment and the local communities, and are driven by the aim for contribution to make the world a better place, and for spiritual fulfillment above other motivations.

They are activists in the social media either criticizing the brands creating negative impacts on the society and the environment, or promoting brands concerned about positive impacts. Such networks are becoming the main and most trusted source of information for most consumers who increasingly trust other consumers rather than companies. It is through these social networks that consumers share their knowledge and are to share stories about the life-changing experiences offered in the destinations.

Unlike typical passive consumers, tourists 3.0 are willing to take an active role in their relationships with their favorite brands, through co-creation of products and marketing contents. They want to be active players in the brand’s marketing activities, mostly through the social media networks. They are the ones who hold the community’s trust, and so have the power to decide which brands are to be supported.

They are more motivated by self-actualization, which is what unleashes most of their creativity, and by giving them the opportunity to contribute in social and environmental issues the destination is targeting and appealing to their human spirit, their primary motivator. In the destination, they look for authentic experiences through which to develop new skills, learn about new realities, cultures, and ways of life, which open their mindset and ultimately change or influence their life.

Attracting, convincing and engaging them in the mission purpose turns them into brand ambassadors who spread the stories about the destination’s experiences, ultimately expanding the network of brand enthusiasts at no cost to the destination.

Another strategic target is that of the young generations, who may get engaged through special educational programs and game-playing activities. Furthermore, it is interesting to explore the many niches and segments of special interest travelers, characterized by a high educational level, sensitivity towards cultural and environmental issues, and high expenditure in the destination.

What percentage of the desired marketing impacts do you think we can expect from this type of brand ambassadors, compared to the impacts created through conventional marketing in mission driven destinations?

Business model innovationEnvironmental sustainabilityMarketing 3.0SustainabilityThird sector and social sustainability

Destination Models 3.0: Competitive advantage & Value proposition (I)

The core competitive advantage of destination models 3.0 is their unique capacity –built upon the open innovation ecosystem- to create mission driven experiences and stories that engage stakeholders to become brand ambassadors, as well as to adapt its business model to changes in the environment, and to involve all the local communities in providing authentic life-changing experiences, while alleviating poverty and protecting the natural and cultural heritage.

In destination models 3.0, the mission, vision and values are embedded in the core of the value proposition. Destinations 3.0 are known as scenarios where many stories take place about authentic and life-changing experiences with the local population, which ultimately have a positive impact on either the social, cultural or natural environment of the destination. Moreover, visitors are encouraged to write and share their story in order to inspire more people to live their own experience.

Hereby are listed some sample life-changing experiences classified according to the type of mission accomplishment, which may consist on alleviating poverty, protecting the environment, promoting the cultural heritage or fostering socio-cultural transformation both in the community and the tourists.

  • Environmental protection
  • Tourism programs consisting of discovery of the natural heritage while actively participating in an environmental protection program in cooperation with NGO or other entities.
  • Nature sightseeing and observation experiences accompanied by an expert environmentalist educating them on the fragility of the natural heritage and the environment-friendly practices.
  • Heritage protection and promotion
  • Learning about the local arts, language, cooking, dancing, instrument playing, etc. to turn intangible heritage into a skill development experience.
  • Immersive experience with cultural / ethnic minorities for a deeper understanding of their culture, traditions and way of life.
  • Poverty alleviation
  • Accommodation with local families where to enjoy their home hospitality and have a firsthand experience of the local reality.
  • Sharing meals with local families, experiencing their way of cooking, their rituals and the local food along with their hospitality.
  • Enjoying other interactive experiences offered by locals who share their knowledge about the hidden spots of the destination, local games, parties and tell stories.
  • Socio-cultural transformation
  • Accommodation and stay in religious sites such as monasteries and temples sharing the lifestyle of the monks to develop spirituality and peace of mind.
  • Developing communicative skills through storytelling facilitation programs, and further encouraging participants to write their stories and submit them in contests and the social networks.
  • Developing creative activities that challenge and stimulate their imagination through art workshops and contests, including a broad scope of art disciplines.
  • Multi-activity resorts where clients are educated on healthier lifestyles, learning about balanced diet, physical exercise, meditation, etc.

Do you envision other types of life-changing experiences?

Business model innovationCollaborative business modelsInnovationStrategy planning & execution

Destination Models 3.0: The business model canvas framework

The business model canvas is a strategic management template for depicting the rationale through which a business creates, delivers and captures value. It is a strategy blueprint with elements describing a business’ value proposition, infrastructure, customers, and finances to assist business leaders in aligning their activities by illustrating potential trade-offs.

This business model framework describes the key components that define the business’ DNA:

  • Competitive advantages & value proposition. Core strategic edges that provide advantage over competitors, experiences provided to the tourists and mission based value provided to all stakeholders. This should explain what differentiates the destination’s offer from others, and so the reason why tourists should go and other stakeholders should collaborate with the destination.
  • Customer segments. The target tourist segments that the destination wants to attract, based on criteria such as geographical markets, sociological and motivational profile.
  • Customer relationships. The kind of relationships the business model wants to establish with tourists, how to deliver the experiences and how to engage the tourists with the destination.
  • Marketing channels. The types of channels and marketing partners through which the destination is to deliver the stories and other marketing contents to engage potential tourists and other stakeholders.
  • Key activities & management system. The most important activities to sustain the competitive advantage through continuous improvement and execute the value proposition, as well as the platform’s management system including strategic goals, performance standards and metrics to measure the health of the business model.
  • Key resources and organizational structure. The necessary assets to start operating the platform and attracting stakeholders, which encompasses human, financial, physical and intellectual resources. In the organizational structure, every position is defined by its mission and key competences.
  • Key partners. The network of partners which are necessary to deliver the value proposition, as they bring along know how, resources and other value which are beyond the core capabilities of the business model, but should not be internalized, in order to reduce risk and costs, and to optimize operations.
  • Cost structure. The balance between overheads and variable costs, determining the potential to generate economies of scale or economies of scope.
  • Revenue streams. The way the business model generates income from the delivered services and products to different target clients and partners.
  • Social & environmental costs. The negative impacts that the tourism business development may cause in the natural environment and to the local communities. Hereby we may remark also the negative impacts saved by the tourism 3.0 development approach, in comparison with the usual practices.
  • Social & environmental benefits. The positive impacts that the tourism development is having both on the natural environment and local communities. They are to be measured through a series of metrics to assess the progression on the mission accomplishment.

Would you add or change any business model building block?

Business trendsCollaborative business modelsInnovationIntelligenceIntelligence methods

Destination Intelligence 3.0: Approaching tourism 3.0 from the regional level

Fostering the adoption of the practices and values proposed in the Vision of Tourism 3.0 entails transforming progressively the mindset of the tourism industry leaders towards a culture of collaboration and innovation.

Such efforts may well start in the top levels of the regional tourism boards, governments or industry associations. Either of these may take the lead in promoting the practices of Tourism 3.0 throughout the region down to the local levels, and a possible way to do so is by establishing a Destination Intelligence 3.0 system. This entails three main activities:

  • Capturing intelligence in the outbound markets
  • Monitoring the tourism activity in the destination
  • Leveraging the collective intelligence through an open innovation system

Destination intelligence 3.0 sets the stage for tourism destinations to develop their innovation strategy, providing a series of information flows and tools that facilitate and stimulate destination stakeholders to envision the need for innovation not only on the product development area but also on a more holistic approach encompassing all building blocks of the business model to continually improve the destination’s competitiveness. Further, it envisions how this practice is to become a key discipline in sustaining competitiveness and improving the destination’s marketing efficiency and effectiveness.

Apart from the consultancy reports, do you thing that intelligence reports elaborated by industry associations, governments and tourist boards are satisfactory to guide strategy, marketing and innovation planning in local destinations? If not, what is missing?

Business model innovationCollaborative business modelsCollaborative cultureCulture changeEnvironmental sustainability

Destination Marketing 3.0: Mission, Vision and goals

In Marketing 3.0 the mission is the main purpose of the destination development. This is to be defined by listening to and understanding the needs, concerns and aspirations of all stakeholders, starting with the local community leaders but without disregarding other potential stakeholders such as the communities of creative activists, who are to become the destination’s best brand ambassadors. Creating a mission often starts by thinking about small ideas that can make a big difference, and doing a Marketing Plan 3.0 gives an opportunity for reflection upon the mission definition, to make it more ambitious and attractive to the targeted mission driven stakeholders.

Such concerns and aspirations addressed by the mission are to be closely related to poverty alleviation at the base of the pyramid, protection of the natural environment through sustainable practices, and socio-cultural transformation towards more open and sensitive mindsets, changing the way people do things in their life, unlocking their human potential through skill development, and also fostering discovery of the fulfilling power of contribution to the greater good.

When a good mission is created it introduces a new perspective which ultimately is to transform the stakeholders’ lives, becoming a symbol within the community. Such a mission has to be spread through compelling and real stories that appeal to the targets’ human spirit, also empowering them to contribute in the activities aligned with the mission accomplishment. Their participation is crucial and they should feel responsible for fulfilling the mission.

The vision depicts how the destination and its stakeholders are to be transformed through the accomplishment of the mission, what the destination aspires to become and attain. The vision has to be the guiding force that motivates all stakeholders to contribute to the mission accomplishment and become brand ambassadors for the destination.

Marketing the mission and vision to the stakeholders is to be a critical step in the transformation, in order to engage them in the collaboration and innovation efforts, in view of a better future for the destination’s community. This is to be explained in the section about Internal Marketing.

Once the mission and vision are defined, they have to be turned into goals to better focus the strategies and efforts towards the mission accomplishment. Further, these goals have to be converted into a series of specific, measurable and time-bounded objectives which are to be the reference upon which performance is tracked throughout the implementation of the marketing plan.

Such goals and objectives are to be classified in many different areas of scope:

  • Mission goals and objectives, related to poverty alleviation, environment protection or socio-cultural transformation.
  • Business goals and objectives, related to financial performance and business model development.
  • Marketing goals and objectives, related to brand awareness, storytelling contribution and popularity, content delivery, merchandise sales, etc.

All these goals and objectives are to be used in the definition of the key performance indicators to track the success in the implementation process of the plan.

Which do you think will be the key success factors in defining the adequate Mission, Vision and Goals, beyond stakeholder participation?

Business model innovationCollaborative business models

Destination Models 3.0: shaping the new generation of destination business models (II)

From the operational perspective, the platform has a group of core businesses and resources fully integrated –whose owners become platform shareholders or sell them to the platform-, and a group of businesses which may choose among several flexible integration formulas to become part of the platform, whose owners may keep control of their business and have the right to change their integration status upon complying with specified conditions.

Therefore, the small local suppliers (such as restaurants, accommodation, activity organizers) operate autonomously within the platform, taking advantage of the increased attractiveness of the destination due to the story-based marketing, the platform’s services and support in providing a higher-standard customer experience, and the aforementioned advantages of leveraging the collective intelligence. In exchange, they have to comply with the obligations established according to their chosen integration formula within the platform -see section 3 about integrating stakeholders-, which would mainly consist of complying with service quality standards and urban aesthetic guidelines, and contributing to the open innovation system.

In summary, the platform is in charge of several roles:

  • Ensuring that the tourism business is developed in harmony with the cultural and natural heritage.
  • Managing and controlling service quality of all integrated businesses.
  • Directing and managing the open innovation system and its outcomes.
  • Providing facilitation and support to integrating businesses, especially to new entrepreneurs.
  • Managing the incentive system to reward good service quality and contribution to innovation.
  • Managing the bookings of all service businesses through a booking center.
  • Managing the integration of all businesses within the platform.

As a result of the tourism 3.0 development approach, destinations integrate and engage all the local community in the tourism activity, maximizing their collective human potential to develop a vibrant and harmonious destination where visitors come to live authentic life-changing experiences which ultimately address some of the stakeholders’ concerns.

The following sections explain in further detail the structure and operation of destination models 3.0, and the detail of each of the building blocks that depict their rationale. In the upcoming blog posts the main challenges in developing business models 3.0 and their correspondent strategies will be explained.

Do you envision other roles that the platform could or should be in charge of?

Business model innovationCollaborative business modelsInnovationMarketing 3.0Strategy

Destination Models 3.0: shaping the new generation of destination business models (I)

Destination models 3.0 are conceived as collaborative models which intend to leverage the creativity and know-how of all the stakeholder community to gain competitive advantage over their competitors, by developing a large network of brand ambassadors who create and deliver stories about the life-changing experiences that take place in the destination, in order to engage new stakeholders in the pursuit of a mission that addresses the concerns of the destination’s community. They are also triple bottom line models, as they account not only for financial costs and benefits, but also for environmental and social costs and benefits. Usually, the mission encompasses some of these issues:

  • Fostering socio-cultural transformation through the promotion of healthier lifestyles, cross-cultural understanding, mindset shifting in leadership culture, developing mindfulness, etc.
  • Enhancing conservation and promoting the cultural heritage.
  • Protecting the environment through education, innovation and deployment of sustainable practices, and collaboration with partners’ environmental programs.
  • Alleviating poverty through the empowerment of the communities in the base of the pyramid to become micro-entrepreneurs and participate in the tourism business.
  • Unlocking human potential through the empowerment of all stakeholders to participate in the destination’s model innovation system, with the creation of experiences and stories.

The model is a multi-sided platform which creates value by facilitating interactions between tourists and local service suppliers, also attracting many mission driven stakeholders through the network effect. Further, the collaborative business model intends to leverage and engage the collective intelligence by:

  • Creating life-changing experiences which directly or indirectly address the mission issues.
  • Designing and developing marketing contents and materials to brand the destination.
  • Revamping the business model as new challenges and opportunities come along.
  • Sharing resources among the community and developing economies of scale.
  • Leveraging the negotiation power of the community to obtain favorable deals with external suppliers.
  • Providing more professional development opportunities to community members.

Do you envision other issues to be encompassed in the mission? Do you think of other advantages of collaborative models, other outputs of the collective intelligence?