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Analysis - December 6, 2007

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Chronology

December 2007

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Print Accommodation, Management,

Building a customer database

To begin with, customers are the very heart of your organization; they keep your company alive. Without your customers, you would not be in business.

LL Bean, an outdoor equipment and apparel company in the United States, displays this saying on its office walls: “A customer is not dependent on us, we are dependent on him.”

At Disneyland Resort Paris, there are no “customers,” but “guests.” In the service industry, especially the travel and leisure sector, the customer is indeed a guest.

This is why I would like to add a fifth P (People) to the 4Ps of the marketing mix (Product, Price, Place and Promotion), to cover customers and customer relationship management.

Knowing your customers is one key to successfully boosting sales because it enables you to:

  • Suggest the right product or holiday package
  • To the right customer
  • At the right time

Quite often, the 20/80 rule is very accurate when analyzing a company’s clientele: 20% of the customers account for 80% of the business volume. Therefore, creating a customer database and becoming familiar with its features can definitely help improve sales and consequently your company’s profitability.

The database should enable you to extract customers or prospects so you can:

  • Boost sales and profits
  • ncrease the number of new customers, thanks to word-of-mouth from satisfied customers
  • Encourage customer loyalty with new products and special offers
  • Get your message to your customers at the right time, for example, when they are planning their next vacation or weekend getaway with friends

Find the appropriate information

One has to begin by opening drawers and looking at your business’ customer records. Files should be consulted chronologically, in the following order:

  1. Marketing – Information Requests
  2. Reservations
  3. Reception – Front Desk
  4. Leisure and Recreation – Classes
  5. Dining: Meal Plan or Theme Supper
  6. Customer Accounts
  7. Customer Satisfaction Survey
  8. Commercial Services – TO/Agencies & Groups/Seminars

Some of your company’s divisions deal directly with customers and have a lot of useful information (like the contact information obtained when the customer last booked a stay or requested information).

Is your site a family holiday destination? Information about your customers (adults, parents, children and grandchildren) can be useful when you are creating new products or packages, like spring holidays aimed at seniors or family getaways on long spring weekends.

Some campground operators specifically target families with children ages 12 and under, while others seek teens and young adults. If you know your customers well, you can target potential customers that resemble them.

It is estimated that your customer base erodes at an average annual rate of 10%. Therefore, your file of new contacts and prospects must be replenished regularly. Since your current customers are the best ambassadors of your product, you should seize the opportunity to ask them for their friends’ and relatives’ contact information.

Organize the customer database

The data gathered must be organized and recorded to suit its ultimate use. Some words of advice: keep it simple and functional.

Too much information becomes useless information. Not every piece of information is useful or workable, in any event, not at first. It is better to start out simply and then develop your database as your needs grow.

Set realistic goals when launching your customer database and share these goals with your associates. They will no doubt have comments and suggestions on how best to collect and use the information gathered.

Monitor two indicators

In addition to qualitative data like the customer’s name, contact information and, of course, email address, it is useful to monitor two other types of customer information:

  • consumption history
  • communication history
  1. The consumption history includes information like:
  • dates of stay
  • duration of stay
  • number of adults and children (and their ages)
  • any reservations for rented accommodations – cabin, RV, bungalow, trailer
  • special features of campsite location – near a lake, in the woods, a specific site
  • several accommodations reserved with friends or relatives
  • optional activities: classes or reserved activities like horseback riding, tennis, canoeing, kids’ club, etc.
  • reserved dining options, such as a theme dinner
  • specific services like a baby monitor
  • outside products or services like a sound and light show being presented in the area

Of course, a consumption history will incorporate all information from prior years.

Experience shows that customers tend to spend the same amount of money at their vacation destination as they do on the rental. By monitoring your customers’ consumption during their stay, you can quantify the economic importance of each reservation and define profiles for targeting the most promising potential customers.

If you have more than one site, it would be useful to consolidate them when renewing contracts with third parties and travel professionals.

    2. The communication history records the dates and messages sent to each customer. You can monitor and measure the effectiveness of your communications and promotional offers.

As always in a communication campaign, it is recommended that you test your promotion on a representative sampling of your target clientele. A well-organized customer database will make it easier to quantify and evaluate your communication activities. The communication history is necessary for building customer loyalty. It enables you to develop a lasting relationship with your customers by taking their preferences and shopping habits into account.

Remember, wooing back an old customer is one-fifth the price of finding a new one.

By combining these two approaches (consumption and communication histories), you can, with a little experience, extract information and group together the profiles of similar or closely matched customers.

  • Once you define qualification criteria, you can use them to segment your database. Criteria like postal code, holiday period, family make-up, activities and purchasing method, either direct or indirect, will help you extract customers with similar characteristics.

For example, to tell your customers about a spring weekend promotion, you would extract all the addresses located less than three hours away by car. A four-day June package to explore the Loire Valley and learn about wine-tasting would be sent to customers who are able to travel at that time of year, like seniors.

Knowing your clientele is also necessary for properly positioning your product. In an increasingly competitive economy, it is vital that your market position and marketing goals be clearly stated.

The tools needed

There are many customer database management software programs available on the market. Select a customized tool that will enable you to format the customer database in accordance with your goals and uses. The ideal tool is one that you can develop as your needs progress and that functions with your office software programs (e.g. Excel, Word, Access).

Finally, you should be able to connect your customer database directly to your Website and operate it from the site.

With the Internet, you can communicate with each and every customer. Nowadays, it is indispensable to have a direct marketing tool for communicating and selling, because over 50% of all people search the Internet for information on their destination and holiday spot and 40% have used it to reserve travel products.

Should you operate more than one tourism business, building a customer database on your extranet site will make it even more efficient and functional. Some information can be centralized on it, or made available and useable for each department in your company.

Of course, access must be secure and adapted to each user’s responsibility level. The marketing department does not need the same data as the front desk or the person in charge of supplemental activities.

Customer databases are the property of a business and an important factor in its future success. Therefore, a responsible individual must be appointed to manage and coordinate the project with the input of the departments involved.

Use the database

Offering all customers the same benefits or discounts will only lower your profitability without guaranteeing an increase in sales. Often, this tactic simply leads to ongoing price-cutting. The only rule: any promotion or discount offered to a customer must always be justified and reflect the history of the customer’s relationship.

Analyze the reservations made and study your customers’ profiles to better understand their buying habits and then use this enhanced customer knowledge as part of your marketing efforts. You could improve business during slow periods or increase average revenue per customer.

You could launch a loyalty program that uses preferential treatment and specific extras to develop privileged customer relationships. Preferred customers will agree to receive communications from your company and send you valuable information about their preferences and future needs.

It is essential to involve your associates and increase their awareness. Without their daily input, your database will quickly become unworkable due to its incorrect, incomplete or simply out-of-date information.

A good database must be selective, exhaustive, nominative, up-to-date and accurate.

 

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