Marketing 3.0Storytelling training & case studiesTourism marketing

Destination Marketing 3.0: Storytelling training

Storytelling training is the process through which stakeholders develop their storytelling skills to be fully empowered in telling stories about the destination. Creating compelling stories is an art for which special techniques need to be mastered, and special skills have to be developed.

For instance, to be compelling, the stories have to be real and driven by lesser known characters like any community member, so as to be regarded as a community symbol, a symbol of the collective power of consumers leveraged in networks in front of corporate giants. Furthermore, they should use metaphors such as balance, transformation, journey, container, connection, resource or control. Characters, plot and metaphors are the three components necessary to move people.

The destination’s communication platforms (website, Facebook page, etc.) should facilitate, encourage and reward tourists for sharing their experiences in the form of compelling stories. The Whitepaper “Marketing destinations through storytelling” is to explain all the details about this essential training process for successful storytelling.

Do you think that learning how to craft and tell a compelling story is an experience many people would like to live among the values driven individuals?

Business model innovationCollaborative business modelsSustainabilityThird sector and social sustainability

Destination Models 3.0: Social benefits

As already introduced in previous sections, the mission of destination models 3.0 is to address social and environmental challenges that concern the stakeholders. In this section we explain the positive impacts that the tourism development intends to make according to its mission. The two main types of missions are most likely to be poverty alleviation and environmental sustainability, for which we need to define the role of the destination model in addressing these challenges, the goals and the metrics to measure its success.

When focusing on poverty alleviation, this is intended to be attained through fostering entrepreneurship in the base of the pyramid (BOP), favoring local businesses as suppliers, investing in infrastructure, and providing training, coaching and micro-funding to the poorest layers of the community, empowering them to become active players within the destination model. Ultimately, their participation brings along more human capital in the creation of experiences and stories, as well as a surplus of authenticity and variety that will positively impact in the visitor’s experience and the image of the destination.

Moreover, the raise of the bottom of the pyramid in terms of disposable income is likely to create multiple opportunities for the local economy, with all the new services and products that they may afford to buy. There could be many indicators to track the evolution of poverty alleviation:

  • Newly created tourism businesses in the poorer layers of the community
  • Increased disposable income in the poorer layers of the community
  • Newly created “non-tourism” businesses serving the poorer layers of the community
  • Increased turnover of old businesses serving the poorer layers of the community
  • Increased number of households with access to information technology and computer literacy
  • Increased access to primary and secondary education in the poorer layers of the community

Would you consider other relevant indicators?

Business model innovationCollaborative business modelsEnvironmental sustainabilitySustainabilityThird sector and social sustainability

Destination Models 3.0: Social & environmental costs

Even if destination models 3.0 intend to address social and environmental concerns by reducing the negative impacts that the tourism activity usually creates, it may not be possible to eliminate them completely, for it is necessary to foresee and monitor these impacts to obtain a holistic assessment on the mission accomplishment.

Furthermore, this section should also explain to what extent the destination model manages to reduce these kinds of costs in comparison to most conventional models. So long as the mission is not only to create positive impacts, but also to reduce negative impacts, it is necessary to gauge the negative impacts that the model manages to save in the social and environmental spheres.

There should be established a set of goals in relation to this intended impact reduction. For this purpose, a series of performance metrics are to be designed, along with those for measuring the positive social and environmental impacts. Once a year, a social and environmental audit should be carried out to assess the impact reduction in relation to previous years.

Some indicators on environmental negative impacts could be:

  • Air pollution
  • Acoustic pollution
  • Forest land reduction
  • River or sea water cleanliness
  • Survival status of endangered species

Some indicators on economic, social or cultural negative impacts could be:

  • Employment seasonality
  • Employment insecurity
  • Satisfaction of residents in tourist areas on the cohabitation with tourists
  • Rise of the real estate prices due to the tourism activity
  • Termination or offshoring of non-tourism local businesses replaced by tourism businesses

Would you consider other relevant indicators in either category?

IntelligenceIntelligence methodsStrategy planning & execution

Destination Intelligence 3.0: Monitoring the tourism activity

Beyond researching the outbound markets in search for trends and opportunities, it is also necessary to keep track of the current activity within the destination, as of a continuous internal diagnosis of the local industry performance. Such monitoring system also intends to open a new communication channel with tourists, to complement the information obtained from the trade professionals in the outbound markets.

Even if the primary goals of monitoring systems are to obtain statistical data for the key performance indicators and to observe the evolution of demand characterization through quantitative methods, the new approach hereby proposed intends to expand the scope of the monitoring system to establish a closer and more personalized relationship between the destination and the tourists, especially with the ones who are more creative and socially active, matching with the profile of the Tourists 3.0.

Do you think that destinations usually obtain enough intelligence from the visiting tourists?

Business model innovationCollaborative business modelsMarketing 3.0StrategyTourism marketing

Destination Models 3.0: Revenue streams

In Tourism 3.0, revenue streams are a result of the customer engagement in the mission accomplishment. Depending on every business model, there could be several kinds of revenue streams:

  • Sales of merchandising products (through licensing designs to manufacturers)
  • Service sales (accommodation, activities, food & beverage) from integrated business units
  • License fees to local service providers in some cases
  • Brokerage fees for the booking platform service
  • Renting fees for renting premises and facilities to local service providers or partners
  • Service fees to partners for training or providing technical assistance
  • Asset sales (real estate investments)
  • Sponsorships
  • Service suppliers’ advertising in the online marketing platform (paid premium advertising space)

When providing services to the local service partners, there could be two main revenue models:

  • “Service based fee” model, in which the local partner pays to the platform for the training or technical assistance services used, at an advantageous fee, leveraging the negotiation power of the platform.
  • “Flat service fee” model, in which the local service partners have to pay a fix fee to the platform, allowing them to use a portfolio of services without extra charge.

In between these two opposite models, there may be many intermediate ones, in which there is a fix monthly service fee which gives right to service supplies up to a limit, from which services are payable. Further, such service fees may be subsidized by the platform -especially for the micro-entrepreneurs in the poorer layers of the community-, or to be also funded through the micro-loans. All these issues are to be discussed during the business model design phase with the local community leaders, as they are closely related to the local culture.

This section should include a diagram depicting the evolution of the revenue streams along the different stages of development, in contrast with the evolution of costs over these development stages. This diagram would visually depict whether some customer segments subsidize other segments, or some business units subsidize others, especially in the early development stages. The diagram should also include a break-even analysis to show when the platform is expected to generate profits.

Hereby it is important to remark that one of the main goals of the open innovation system –within its business model innovation section- is to create new revenue streams, increase the existing ones, and reduce costs, for this scheme may change over time, if the circumstances advise to do so.

Do you envision other sources of revenue?

Business model innovationCollaborative business models

Destination Models 3.0: Cost structure

As Destination models 3.0 consist of infrastructure platforms, they are rather fixed cost based, though they have some variable costs as well. As with all overhead based structures, they try to leverage the platform structure to the utmost of its potential, attracting partners that ultimately generate economies of scale and also economies of scope.

Destination models 3.0 intend to be value driven platforms, focused in providing value to its customers and partners, rather than on minimizing costs only. The value provided by the platform to its integrated businesses is based on training and facilitation to help them provide an excellent service, inspiration to develop signature experiences, funding and empowerment to start-up a business, a powerful marketing system to drive more tourist flows, and an aesthetically harmonized scenario which provides a feeling of authenticity and uniqueness to the visitor.

The main overheads of a destination platform are to be determined by the need for investments in infrastructures, facilities and urban aesthetic harmonization. These would be:

  • Maintenance of the physical platform
  • Staff salaries
  • Fixed costs related to the integrated business units
  • Investments amortization

The main variable costs of a destination platform in most cases would be:

  • Marketing expenses
  • Rewarding incentives for contributors to the open innovation system
  • Training and coaching for employees and service supplier partners (to be internalized once the model becomes established and there is constant demand for such services)
  • Debt repayment interests
  • Mystery tourist services
  • Subsidized capital cost in the micro-loans to the small entrepreneurs (in case there is no direct funding available from financial institutions)
  • Mission driven activities powered by volunteers, to be paid for their expenses

In this section the necessary investments with their corresponding amortization periods should be estimated, along with the estimation of fixed and variable costs according to different levels of scale, foreseeing the future development of the destination model.

Would you consider any other aspect to be explained regarding the cost structure?

 

 

 

IntelligenceIntelligence methods

Destination Intelligence 3.0: Results evaluation

Especially critical in the initial development phases of the MI unit, the evaluation of the obtained results is necessary both to justify the expenses and investments as well as for the improvement process of the MI practice.

The evaluation may be carried out through a series of qualitative and quantitative indicators:

  • Number of projects executed on time (Quantitative)
  • User satisfaction (Qualitative & Quantitative)
  • Contribution of the MI to the directors decisions (Qualitative)
  • Increase of the MI queries by the directors and other users (Quantitative)
  • Result of the projects (Qualitative)
  • Increase in the company’s results (Quantitative)
  • Profits/Expenses ratio (Quantitative)
  • Reduction of the future organization costs (Quantitative)

The evaluation of the MI’s economic impact may be carried out by the following steps:

  • Specification of the benefits and favorable results (p.e.: entry in a new market)
  • Measurement: transformation of the intangible values of the MI and tangible representation (new tour operators programming the destination, new direct flights)
  • Accounting: assigning an economic value (new revenue and profits)

Even if there may be difficulties in measuring or evaluating the MI results, not doing it may lead to perceiving the MI unit as a cost more than a profitable practice.

Would you consider any other KPI when assessing MI results?

Business model innovationCollaborative business modelsCollaborative cultureCulture changeEnvironmental sustainability

Destination Marketing 3.0: Internal marketing strategy

It is necessary to market the vision, mission and values to employees and partners, as they have to become engaged to act as brand ambassadors in the social networks. This starts by executives performing an adequate leadership style according to the stated values. Only by delivering a value-driven leadership experience through everyday behavior will the executives manage to engage employees and partners in the mission and values they preach. The leader’s role here is rather to inspire and empower employees to develop their ideas towards the mission accomplishment.

Furthermore, so long as these values are successfully embedded in the corporate culture, these employees and partners in turn will be brand ambassadors inspiring and engaging other people in a life-changing experience. Such values ultimately deliver several pay-offs, like an increased capacity to attract talented employees, boosting productivity, and eventually improving customer satisfaction and recommendation.

Talented professionals look for employers empowering them to be creative, enabling them to develop their human potential. Furthermore, they are to be far more productive if they sympathize and believe in the mission that the organization is striving for. Outside stakeholders assess the organization’s authenticity according to the experience they have with their employees and closest partners.

Such cultural change may require important sacrifice, as it is necessary to stand by these values even if it hurts the business. Only then, when witnessing the employer’s integrity, will the employees engage in full commitment. Furthermore, such cultural issues are to be regarded when recruiting new employees and selecting partners, to make sure that they are likely to integrate within such culture.

Among the values to be promoted internally, it is important to regard the importance of innovation and collaboration beyond the organization’s boundaries as the main values that make a difference in sustaining the competitiveness and marketing the destination to outperform competitors.

Internal marketing should go beyond employees and service partners, also encompassing other partners such as non-profit organizations with whom the destination may cooperate for the development of mission-driven volunteering programs. These are to become key agents in both the mission accomplishment and the delivery of stories, as they hold reputation among communities of volunteers who may become mission-driven activists and brand ambassadors at the same time. Other partners in this section could be educational institutions, which may nurture the destination with storytellers and content marketing providers, as the mission driven purpose may inspire some educational activities in this direction.

Internal marketing is to be especially critical when the shift towards Marketing 3.0 is promoted by the DMO, as they need the commitment of all the destination’s operators.

In the case of the resorts, a specific internal marketing program has to be prepared for shareholders, to convince them on the new marketing strategy focused on the mission accomplishment and the long term profits rather than short-term. As the new marketing approach entails reformulating the business model to some extent, it is necessary to gain their approval to do so.

What kind of challenges do you envision when deploying Internal Marketing by a DMO in cooperation with the destination’s operators?

Business model innovationCo-creationCollaborative business modelsCollaborative cultureOpen innovation

Destination Models 3.0: Key partnerships

As collaborative models, destination models 3.0 are based upon leveraging the potential of an extensive partner network, where we may find several kinds of profiles:

  • Service suppliers are mainly the local micro-entrepreneurs that are to become the backbone of the destination model, providing accommodation, food & beverage and activities. They are the main experience providers, and the ones who bring along hospitality and authenticity to the destination. Here, the destination model intends to foster entrepreneurship in the base of the pyramid to alleviate poverty. These are to be the bulk of the partner network, helping the platform in the development of economies of scale. However, it would also welcome experienced professionals to gain know-how, and for some critical activities such as the organization of events.
  • Sponsors could be an extra source of revenue, so long as their business activities are also aligned with the destination model’s mission and vision.
  • Tour-operators and travel agents are likely to become key partners especially along the early development stages of the destination model, as explained in the Marketing Channels section.
  • Non profit organizations bring in the know how on addressing the environmental or social challenges set up in the mission, as well as workforce and funding in some cases. They also hold a high credibility to act as brand ambassadors.
  • Volunteers bring in extra workforce to accomplish the social or environmental missions, guided by the non profit organizations partnering with the destination. Furthermore, volunteering may be also used to assess many potential employees or potential partners, thus playing a strategic role.
  • Government should take a key role in facilitating the development of the destination model, and if possible as a long-term investor or guarantor. At a minimum, it should guarantee a harmonized urban landscape by carrying out the necessary investments and adapting the regulations.
  • Opinion leaders such as bloggers, journalists and other influencers will be the first who will spread the stories to their followers. They are key players in the starting-up of the marketing system.
  • Community leaders in the role of influencers to engage the rest of the community, and then to participate in the creation of experiences and stories for the destination.
  • Educational institutions may be valuable partners, from the primary school level in the story creation to the vocational school level in the training for entrepreneurship in the base of the pyramid. They may also be a source of volunteers through educational volunteering programs.
  • Strategy consultants may be necessary to provide guidance in the management and the business model innovation.
  • Financial institutions may be needed to provide funding for investments in infrastructure and facilities. Further, they could provide micro-loans to the entrepreneurs in the base of the pyramid.
  • Investors may be necessary whenever expensive infrastructures and facilities need to be built. As explained in section 3, it is critical to sell the destination model vision in order to attract long-term oriented investors, as well as to create a two-tier shareholding structure limiting power to the short-term oriented investors.
  • Land owners are likely to be critical partners, to be fully integrated as shareholders to the platform as long as possible, engaging them for the long term. These are among the first partners that need to be attracted, accounting for one of the key success factors to start-up the business model development.
  • Storytelling facilitators are key players in destination models 3.0, for they are to help all stakeholders in developing their storytelling skills. These could be partners or platform employees, as they not only should be required to train new partners, but also to offer storytelling workshops as one of the life-changing experiences offered in the destination.

This section should explain all kinds of partners that the model intends to attract, specifying which value they bring in and how they are to be rewarded. They should be specified their kind of expected participation within the open innovation system, considering the possibility of using the innovation system for inside-out innovation, leveraging the collective intelligence to their advantage, under previously specified conditions. In the case of the local service suppliers, there should be specified their rights and obligations they have to comply with to become platform’s partners.

Would you consider any other type of partner?

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?