Internet has now became a ubiquitous technology. It is everywhere around
us, we can access it at any time with our Smartphones – 82% of European guests
owned a Smartphone (Theresa Ryan’s lecture) – and it has became a extremely
important tool for Travel and Tourism. Internet able to low entry market
barriers, to expand market size and increase the potential of reducing costs
for companies (Gurau, C., Ranchhod, A. and
Hackney, R., 2003).
Thanks to this new tool, Travel
and Tourism companies have been able to build their own Information
Communication Technologies (ICTs) that can be used for several reasons:
tactical and strategical management, pricing policy and Yield Management,
communication… The most dramatic change is seen in the distribution improvement.
Web 2.0 allows companies to change Internet from a communication tool to a real
distribution tool, where the customer is involved in the purchasing process.
Customer should not be anymore considered as targets, but as partner that
conduct their own online research, and then use self-service technologies
(SSTs) to purchase (Stockdale R., 2006). It allows companies to reduce costs,
but it creates for them a real challenge in terms of eImage, eVisibility, and
eReputation. On top of that, we can observe an increase of new travel players,
such as the emergence of Online Travel Agencies (OTAs) that represent strong
competitors for tourism companies as the strategy of these OTAs is mainly based
on price differentiation.
Those are the reasons why it is
crucial for companies to develop online customer relationship management
(eCRM). It will allow companies to increase their guest satisfaction, to
increase their visibility (online and offline) and it will improve customer
loyalty and retention.
Why customer loyalty is important
for a company?
Internet
still has an unsafe reputation for a lot of consumers. Some people are still
scared by online purchasing, as there is no human contact anymore. You do not
trust a merchant, a craftsman, but a website with a call centre that is not
even based in your country. This is a real opportunity for big brand companies
as their offline brand could generate a secure feeling that consumers can rely
on. In this context, loyalty is easier to get, and trust is more important than
price (Vatanasombut, B., Stylianou, A.
and Igbaria, M., 2004). Thanks to customer loyalty,
companies could significantly :
-
reduce their costs of communication to guests
-
reduce their administration and operational costs
-
increase their sales thanks to better market
segmentation, recognition of high profit customers…
-
increase customer satisfaction (Stockdale R., 2006)
Unfortunately,
customer satisfaction is not sufficient to encourage and to ensure repeat
visits and purchases from customers. A real eCRM strategy is crucial for
companies to optimise their customer retention (Feinberg, R. and Kadam, R., 2002)
What is a eCRM strategy ?
The constant emergence of new
competitors is a real challenge in terms of price differentiation, eVisibility
and eAttractiveness for travel and tourism companies. In this context, it is
crucial for companies to have a real eCRM strategy to ensure customer retention
in order to optimise sales. Based on Rosemary Stockdale reflection, we can now
define what are the seven steps of a proper online customer relationship
management strategy.
Identifying the online customer
Companies have to replace a way to
replace the previous face-to-face meeting between a travel agent and the customer
to establish the type of customer he is dealing with, his needs, and his
habits. Online identification is based on online behaviour habits analysis and
professionals have to be able to get these information.
Online Market Segmentation
Based on the analysis of the key
characteristics of the customers, companies can establish relevant market
segmentation. This will help them define different communication strategies
depending on their target, but also to know better the needs of their online
customers to propose advantages on some special good or service that will be
purchased online.
Another extremely important point, as Rosemary Stockdale highlight, companies
have to define the IT capability of their clients. Indeed, the retired people
segment is more dependant on technical services and assistance and might not be
willing to purchase online if the process is too sophisticated.
Customer Data
Companies should keep information about
their customer. A relevant database might be useful for them in terms on studies,
conducing researches and define communication or pricing policy strategies for
instance.
Website Design
On average, customer attention to a
website is around 10 seconds (Heldal, F., Sjovold, E. and Heldal, A.F., 2004).
It means that the website design is extremely important as companies have 10
seconds to attract the customer and make him intent his purchasing process. As
Gianforte said, companies can increase their sales by 33% procuring to
customers a great website experience.
Information gathering and handling
Companies have to be aware of the
importance of which data will be used, which data will be spread to the web,
and which data has to be considered or not. For example, Web 2.0 abled websites
such as TripAdvisor, where guests are free to share their experience with other
users. In case of negative feedbacks, professionals have to show to their
clients that they are taking into consideration their point of view to ensure
guest retention.
Communication with customers
Communication is a key tool to maintain
a link between a company and its guests. It is a way of promoting the brand,
using the online market segmentation done previously to adapt the communication
to specific targets in order to be more effective.
Community sites
With the emergence of websites such as
TripAdvisor, customers feel involved, feel that they are part of the projects
and the success of a company. Loyal guests of a company will help it improve
its customer satisfaction by sharing their experience, their needs and their
expectations. The challenge here for professionals is to manage their
eWord-of-Mouth. Indeed, as travel or tourism goods are intangible, the
word-of-mouth and the reputation of a company is extremely important in the
purchasing process of a customer. Customers trust the other customers and
negative feedbacks could have a strong negative impact on a brand.
To sum-up, Internet has dramatically
changed the company-customer relationship, in terms of promotion, distribution…
It represents for both professionals and tourists a huge improvement thanks to
the potential of cost reduction, simplicity of the purchasing process and the
fact that the client is considered more as a partner than as a simple target.
But on the other hand, it created risks such as eReputation issues. In this
context, it is crucial for companies to develop a proper eCRM strategy to
benefits from customer loyalty.
References
Gianforte, G. (2003) ‘The World at Our Fingertips –
How Online Travel Compa- nies Can Turn Clicks into Bookings’, Journal of
Vacation Marketing 10(1): 79–86.
Vatanasombut, B., Stylianou, A. and Igbaria, M. (2004)
‘How to Retain Online Customers’, Communications of the ACM 47(6): 65 – 9.
Gurau, C., Ranchhod, A. and Hackney, R. (2003)
‘Customer-centric Strategic Planning: Integrating CRM in Online Business
Systems’, Information Technology
and Management 4(2 – 3): 199 – 214, p. 200.
Feinberg,
R. and Kadam, R. (2002) ‘E- CRM Web Service Attributes as Determi- nants of
Customer Satisfaction with Retail Websites’, International Journal of Service
In- dustry Management 13(5): 432 – 51.
Heldal, F., Sjovold, E. and Heldal, A.F. (2004) ‘Success
on the Internet – Opti- mizing Relationships through the Corpo- rate Site’,
International Journal of Information Management 24: 115 – 29.
Stockdale,
R. (2006) ‘Managing customer relationship in the self-service environment of
e-tourism’, journal of Vacation Marketing 2007; 13; 205.
