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?
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?
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-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?
Apart from the open innovation system, there would be many other key activities to highlight:
- Destination’s strategic planning and monitoring the results of its implementation is one of the primary roles of the destination’s platform, from the definition of the mission and the design of the business model, to its deployment and continuous revamping so long as the environment requires so. This is the main role of the platform’s executives, with the support of the open innovation system and the information gathered through the monitoring system.
- The destination marketing is one of the main reasons to justify the development of business models 3.0, leveraging the outcomes of the content marketing system to develop campaigns, destination merchandise, organize events and support special projects such as film broadcasting. Further, especially at the beginning, the platform should develop a marketing plan to start-up the content marketing system and leverage the marketing partners’ influence to attract the first flows of visitors.
- The storytelling training is just as important as the aforementioned story creation section, as it is to train and coach stakeholders in developing their storytelling skills. Such training has to be carried out by a pool of certified storytelling facilitators who train not only all platform partners, but also tourists, becoming one of the life-changing experiences that set destinations 3.0 apart from others. Needless to say, it will be a key factor in nurturing the content marketing system.
- The local service suppliers training may also be critical, so long as the destination model 3.0 intends to foster entrepreneurship in the poorer layers of the local communities. This training and coaching should be primarily focused on hospitality business management, customer service and foreign languages, without disregarding other needs to be identified through the service quality control.
Do you envision how this would work? What kind of obstacles or challenges do you foresee?
Destination models 3.0 are complex in nature, and so it is the system of activities that need to be coordinated and managed to sustain its competitive advantage and make the destination model develop to the utmost of its potential.
The open innovation system is the central activity that nurtures and sustains the competitive advantage of the business model, from which many kinds of outcomes are expected:
- Business model innovation: revamping the model through constant brainstorming, reflection and discussion about improvements in either of the building blocks to achieve current goals, or to analyze new approaches to pursue the mission, improve profitability, streamline operations and adapt to the ever changing environment, foreseeing in advance the upcoming challenges and opportunities. The collaborative system should empower new leaders to drive new initiatives with the cooperation and support of the other stakeholders. Participation is limited to qualified stakeholders, also considering crowdsourcing initiatives opened to networks of external experts. Training on business model innovation methodologies should be considered to set a common framework for facilitating discussion.
- Co-creation of experiences: opened to all stakeholders, this section should feature vibrant discussions where mainly local entrepreneurs and enthusiast tourists exchange and pre-test ideas on new life-changing experiences to be developed in the destination. There could be contests to stimulate participation of the largest extent of stakeholders.
- Story creation: also opened to all stakeholders, this section could feature story creation contests in many formats such as videos, podcasts, text, to be developed individually or in groups. Participation of bloggers would be encouraged through the organization of blogger trips, especially during the initial stages of the destination’s development. This section requires particular attention from the platform managers, as it is the “content marketing machine” upon which the destination model relies to attract and engage new stakeholders over time.
- Marketing contents and designs: this section could encompass the development of an image bank or several collections of designs, to be eventually used in merchandising or marketing materials. Participation in this section could be stimulated through creation contests or crowdsourcing to professional photographers and designers. For the image bank, key influencers such as the “Instagramers” could be invited to the destination as with bloggers and journalists.
Beyond the platform managers’ initiatives to invigorate the innovation system, individual initiatives should also be eventually rewarded through a pre-determined incentive system. In this regard, platform leaders should orientate the innovation efforts towards the mission driven goals and identified challenges and opportunities in the business model innovation forum.
Beyond giving empowerment, the platform leaders’ role is to inspire others and provide facilitation and support to develop skills such as story creation and storytelling. Further, they should control that the initiatives are well aligned with the mission, prioritizing its accomplishment over other goals, to preserve the integrity of the brand. Such control, in fact, should be carried out by all stakeholders. Platform leaders should deeply assume that empowering stakeholders consists also in sharing power with them.
Do you envision any other interesting output to be obtained from the open innovation system?
The main methodology for obtaining all this information is to carry out interviews with tour operators when visiting them, in workshops and during the fam-trips.
The collaboration and complicity we may establish when helping them with business & product development is the key to obtaining all the intelligence. The privileged position as collaborators allows us to obtain more information and more easily than an independent consultant.
The information to research a market segment may be obtained with a few interviews with the key tour operators, complemented with other sources like publications, brochures, surveys and interviews with experts and related associations.
The information for elaborating tour operator company profile programming our destination should be obtained through in-depth interviews and brochure analysis; whereas the information about tour operators not featuring our destination may be obtained through telephone interviews and brochure analysis.
The main sources of information are:
- Tour-operators and travel agents
- Publications and newsletters
- Tourism fairs
- Congresses, conventions and seminars (papers, thesis, studies, presentations, etc.)
- Specialized consultants and journalists, special interest associations, etc.
- Internet and social networks.
For the aforementioned research goals and objectives, would you consider any other methodology or information sources?
In searching for enthusiastic contributors and mission driven stakeholders there may be many different profiles such as schools or NPOs . Continuous search for like-minded communities is key to nurture the content marketing system and expand the destination brand awareness. Individual partners such as bloggers or journalists are also likely to be good storytellers, also considering their media power as key influencers.
Beyond the existing communities related to the aforementioned stakeholders, the destination should develop its network of brand enthusiasts, accommodating the needs of individuals to connect with like-minded people in new communities where the bond is rooted in one-to-one relationships among members. The destination management has to be conscious that communities exist to serve the members, not the business; and so it has to facilitate interconnection among them and encourage participation.
It is necessary not only to communicate the mission and the vision, but also the evolution of the key performance indicators related to both social and environmental issues, to let the stakeholder community see how the destination is advancing towards the mission accomplishment: how much has been done, and how much is left to do.
In the Whitepaper “Marketing destinations through storytelling” there is to be explanation of how to leverage the destination’s stories as a key marketing content. Furthermore, in the Whitepaper “Envisioning open innovation in destinations” there is envisioned several ways the open innovation could be deployed as a marketing content generator.
Do you think that horizontal storytelling –created and controlled by brand enthusiasts- may fully or almost fully replace traditional communication tools such as advertising? What do you think it is necessary to make that happen?
The main marketing channels are the social networks where all the brand ambassadors are spreading the stories, and the mission driven travel agents connected to like-minded travellers. Other partners such as non-for-profit associations may also become channel partners, as they can distribute the stories to their social circles and attract new stakeholders. They are the ones with the best credibility to do so.
Channel partners will not only work as change agents and brand ambassadors, but will also collaborate in the innovation platform bringing worthy ideas and market insights, thanks to their deep knowledge of the outbound markets. For instance, they may bring information about how other destinations are tackling similar challenges.
Furthermore, as mentioned before, it may be necessary to attract non mission driven tourists and therefore use conventional travel agents to market the destination to these targets. This will most likely be necessary in the early stage of development, when the destination has not yet generated enough contents and stories to engage the desired targets. Travel agents will therefore have a key role during the early stages of the destination’s development bringing key insights for the strategic planning, and as key channel partners, to leverage their market knowledge and marketing influence.
Other marketing channels to take into account will be the platform’s booking center and travel portals as sales channels, whereas journalists and bloggers are likely to be key story deliverers especially during the first years of the destination’s development.
In this section, the business model should explain the different channel partners and marketing channels through which the destination intends to communicate its value proposition and deliver the stories. It should explain the expected functions and strategic importance of each channel throughout the short, mid and long term.
Do you envision any other specific marketing channels for destinations 3.0?
This open innovation system is the core of the destination marketing 3.0, becoming the central hub where all communities get connected, and fulfilling the need for connection with other consumers in communities. These communities are the ones which guarantee that the business will ultimately serve the customer’s interests and concerns, and not just the business profit. It is through this community initiative and collaboration that the platform becomes a “content marketing machine” where people create, share and inspire each other to live and tell new stories.
Finally, business models need to develop their unique DNA that reflects the brand’s identity through the social networks, targeting the mind of the consumers and intending to be relevant to their needs. Then, they have to stick to their brand promise delivering experiences up to their claims, prioritizing the mission accomplishment, to keep the brand’s integrity and reach the spirit of the consumers.
Failing to comply with the stakeholders expectations will eventually lead to losing their credibility and hence their engagement. This should be complemented with a brand image whose values appeal to the consumers’ emotional needs. All together is what leads consumers and other stakeholders to experience, engage and eventually become brand ambassadors. Only originality, integrity and authenticity will be effective.
From the operational perspective, such open innovation ecosystem would be based on technological platforms –either existing or proprietary- where to held content creation contests -photo, video, stories, poems, etc.- and collaborative creation processes to further refine the content and integrate insights from various stakeholders.
In this section, the model should explain what kind of relationships it intends to establish with each customer segment, whether they are to be passive receivers or active contributors, specifying what kinds of contributions are expected -co-creation, story delivery, contest participation and voting, etc.-.
Do you think that destinations usually leverage their client’s creative and influential power?