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Full Circle Marketing

Full Circle Marketing: From Value Chain to Value Web
Discussion Paper

The fundamental vision of the BIT Reiseliv project is stated as: ”to create accessible tourism based on customer demand” The participants in BIT and Innovation Norway share the belief that various information technologies can enhance Norway’s success at making the destination more accessible. Initially accessibility was associated with having a web presence. The web is now used by over a billion people world-wide and those users tend to be more affluent, educated, curious and well travelled. Researching travel is now one of the most popular activities on the internet. Thus it is vital that Innovation Norway does what it can to help Norwegian communities and providers both develop an attractive web presence and gain the knowledge and skills needed to use that presence effectively. Phase 1 of BIT focused on developing web marketing competence around the country. The next step was to encourage more interactivity between guest and host and, more importantly, encourage pre-bookings. BIT worked with various regional DMOs to introduce booking systems that could be used by DMOs to provide an electronic distribution channel suited to the needs of small business suppliers. Of the X DMOs in Norway, some X% are now developing booking systems that can be used by their members to sell product online. The challenge now is to link those various systems so that a full array of product can be aggregated into one database to ease searching, comparing and selecting prior to booking. One of the key projects in Phase 2 involves looking at the supply chain as a whole, and determining where connections are needed or can be improved and where there is room for further efficiency gains. The purpose of this paper is to show that traditional supply chain analysis is inappropriate for this sector. Instead, if Norway wishes to attract and serve more international guests, it must take a customer centric view and do whatever it can to ease the customer’s decision making process and smooth their journey around a decision-making cycle or circle. In this context, the role of BIT should be to ensure that Norway is making best use of current information and communication technologies and the channels they have opened up to improve access in the fullest sense of the term.


Full Circle Marketing

The Unique Challenge of Tourism Tourism differs from other sectors in two major ways: first, the customer has to be moved to the point of consumption – in most other sectors, by comparison, it is the product that does the travelling; and secondly, the customer is not purchasing specific products but having a complex experience comprising several distinctly different facets or components produced by discrete and often unrelated suppliers. The term “value chain” is, therefore, less applicable to tourism. Its use tends to reinforce a product centric perspective that assumes that the product and suppliers are in control of production, packaging, distribution, pricing and placement when, in fact, the customer is very much in control of assembling and packaging their experiences before, during and after a visit. So if a destination such as Norway and its multitude of counties and communities wish to make themselves truly accessible to prospects in the fullest sense of the term, then they must shift from a product centric to a customer centric perspective. They must start to see the world as the customer sees and experiences it. Where there are information gaps, they must be filled; where there is confusion, clarity is required, where there is hesitancy on the part of the visitor, confidence and trust must be built so that decisions are made.
“Winning enterprises are those that conceive of themselves as inter-connected business webs or trading communities held together by a common customer. The customer sits at the centre of an orbit not at the end of a chain. Winning enterprises are those with the most “intelligence” – i.e. are able to sense and respond to visitor needs in real time. They are able to exchange and circulate this intelligence to all members of the community so that the visitor’s whole experience is a positive one.”iii

The Customer’s Experience Journey – and the Need to WOO!, WOW!, and WOM! Figure 1 shows the cycle that the visitor experiences when visiting a destination. The visitor is the centre of his or her own journey that goes through five sequential phases: 1. Awareness - Desire The journey starts with a desire or need to travel and the individual becomes aware of options and of fantasizing and imagining places and experiences that might comprise a vacation choice. 2. Inspiration - Choice The next stage involves being inspired – being enticed or persuaded to chose one place or product over another.


Full Circle Marketing

3. Choice / Commitment – Research, Plan & Book It’s at this point that the visitor commits to a destination or experiences and ideally moves into the planning and booking phase The role of the destination and supplier at this phase is essentially to “WOO” as in the meaning to attract or entice the customer and enable them to commit and accept the proposal!

4. Experience From the customer’s perspective this is the most important phase in their journey as it represents the experience and the time spent on vacation at the destination. It is a composite experience comprising multiple elements and very rarely, if at all, are all components purchased at one time and very few of them can be experienced concurrently. Some are mutually exclusive, others supportive of one another. Figure 1: Customer’s Purchase Cycle

The role of the destination and supplier at this phase is essentially to “WOW” the customer – to ensure the experience is so thrilling and positively memorable that they are inclined to tell others about it thereby encouraging them to visit. 3

Full Circle Marketing

5. Share Memory – Reflect & Recollect The visitor packages their own experience in the form of stories and memories recorded in their minds but also recorded on various media (photos, videos, journals, blogs etc.) that can be shared with others. These memories can then be used to “attract” and inspire other visitors to the destination and the cycle starts again. The role of the destination and its suppliers is to encourage and enable Word of Mouth (WOM) referrals and recommendations that encourage repeat visits. In order for the destination to be effective, it must interact with the customer at each of these five stages as follows: 1. ATTRACT – FOSTER AWARENESS Unless the customer is thinking about a travel experience and unless the destination has registered as an option with some appeal, no amount of booking technology will generate any bookings. Sadly, as the fascination with technology has increased, many destination marketers have forgotten the important task of attracting attention, and generating interest and desire to visit one place over another. This aspect of access requires very strong, clear brands that evoke positive feelings. For Norway to achieve its visitor targets, it must “stand out” as a destination, be seen as exciting and relevant to variety of market segments, and convey a sense of urgency that leads to action. The greater the distance that separates visitor from destination, the more generic and clear the brand message needs to be. Long-haul visitors will not respond to county or community messages unless they are clearly communicated within the national umbrella of Norway. Thanks to the widespread use of broadband and multimedia, today’s destination marketers can and must make use of high quality moving and still imagery to convey the features of their place in ways that attract and entice. So in international markets, the national gateway site has a huge role to play in attracting as well as inspiring and enticing. 2. INSPIRE & ENTICE Having generated a positive inclination to consider Norway as a destination option, the next task is to inspire the potential visitor with ideas for getting the maximum enjoyment from a trip. It is now important to build confidence in the visitor – to enable them to see that travelling to the destination will be easy, affordable and, most important of all, exciting, fun, fulfilling and interesting. Given that visitors are seeking memorable experiences, it is vital that the destinations communicate what makes their places, products and services stand out. As prospect visitors are increasingly influenced by the recommendations of their friends and peers – it is vital that the destination has used a variety of means to generate positive buzz and a sense of “specialness”. It should be easy for the visitor to seek testimonials and recommendations from peers they trust.. 4

Full Circle Marketing

If successfully inspired and confident in the reliability of the information they receive, the visitor will commence the next phase along the purchase cycle and commence researching and planning a complex trip. The focus of the destination shifts from attraction and inspiration to providing actual support – to making it easy for the potential visitor to find the products and services that match their interests, needs and circumstances.

3. SUPPORT BEFORE DEPARTURE – RESEARCH, PLAN, BOOk This stage involves three activities: a. Informing, Enabling – i.e., presenting relevant information in a way that it easy to find and manipulate so the visitor can plan an itinerary; b. Building confidence that the selections of places, products and services will match the profile of the visitor and will be delivered consistent with any promise. Note, since few consumers trust suppliers, access to reviews and recommendations from peers and communities has become a very important part of this process; c. Selling/pre-booking – enabling the customer to select all or parts of an experience (flight, accommodation, tickets to events and activities etc.) Sadly, this is where many tourism destinations cease their activities on the assumption that the job has been done once the customer has committed funds and made a purchase. Sadly, because the visitor is only one-third through the product purchase cycle at this point.

4. SUPPORT DURING THE VISIT – ENRICH THE EXPERIENCE The visit, the period between leaving home and returning to it, is the most important phase in the customer’s journey – not just because it represents the experience but because the visitor’s propensity to recommend, refer and return depends on the quality of that experience and the extent to which it matched expectations. At this stage, the destination must do what it can to make it as easy and enjoyable to access the information and services needed to enhance and enrich the experience whether that be access to more information, to tickets and services, or to ways of recording memories. Having made the effort to get to the destination and allocate scarce time and money to the activity, the visitor wants to avoid disappointment (did they miss anything?); see and do as much as they can; find the places that match their interests; and share with friends and family back home. Enrichment and fulfillment are most likely to occur if all aspects of the visitor’s being are 5

Full Circle Marketing

positively stimulated: physical comfort, mental stimulation, emotional well-being and spiritual fulfillment. Technology can be applied to achieve all four. 5. SUPPORT AFTER THE RETURN HOME – ENABLE MEMORY SHARING The visitor has an experience at a destination but cannot take this home. While visitors can only take home invisible, virtual “memories”, the destination has the opportunity to help ensure that those memories are as positive and remain as vivid as possible and, furthermore, has the chance to help their propagation so that they “infect” or encourage others to come to the destination. Today’s hardware (digital cameras and video recording devices)combined with a variety of software (photo/video editing and sharing ) and social media now enable the visitor to become the most powerful marketing vehicle for a destination – provided that the experience was perceived as positive. Word of Mouth (WOM) is now the most pervasive and effective source of information influencing travel decisions.

The Value Chain as a Business Web or Value Net
Each visitor’s purchase cycle as well as their personal journey to Norway occurs within a much larger complex web of inter-related businesses and services with which the visitor must interact. Figure 2 illustrates the web as comprising the customer at the hub or centre of his or her own journey (circle one). The next circle contains all those agencies and intermediaries that help influence the visitor’s choice of destination. It is vital that the destination and its producers understand who these influencers are and how they might work with them to attract customers. Up until just 10-12 years ago, the key partners were tour operators and travel agencies. Now they have been supplemented by Online Travel Agencies OTAs)such as Expedia, Travelocity, Opodo, Last Minute as well as by various DMO or surrogate DMO sites; news media and multiple forms of Social Media (Facebook, WAYN, Trip Advisor etc). The third outer circle comprises an enormous host of individual suppliers (well over 12,000 in Norway’s case) who help the visitor to 1). Get there; 2). Get around; 3.) Have a safe and comfortable place to sleep; 4). Enable them to eat and drink; 5.) Do, see, and participate in activities and events; 6). capture memories and 7.) share those memories with others and reflect back on the experience.


Full Circle Marketing

Thus the task is not to map the value chain but map the customer’s journey through their purchase cycle to ensure that Norway makes it as easy and enjoyable as possible to gather the support, information and services they need to ensure they make a positive decision to visit Norway and have a sufficiently satisfying experience that they tell the rest of the world! While the actual journey through the business web will be unique to each visitor, it is possible to map pathways based on origin, type of trip (length, purpose, experiences sought, budget etc. ) Based on the current financial partnership of BIT Reiseliv Phase 2, we recommend that three journeys/ scenarios be tested:


Full Circle Marketing

1. SOUTHERN NORWAY A German family of four (from Berlin) seek a one week resort stay in Southern Norway. This is their first time visit; they are seeking nature, opportunity for family activities and the chance for togetherness. They are not at all knowledgeable about how to get to Norway (whether to fly or drive); they are not sure whether they can or should buy a package. The challenge is that Mum and daughter like shopping and sunbathing, father and son like sailing, swimming and fishing. They’d like to do some family activities together. Can they do it all without travelling too far?

2. TRONDELAG A well educated couple from Cambridge, UK (he’s doing his PH.d and she is working in market research for BT) are thinking about Norway and Trondheim comes to mind. They aren’t sure what’s around Trondheim and how easy it is to travel between centres in Norway but they have some friends at the university. They want some commercial accommodation and access to city life but would also like to get a taste of the fjords and do some hiking, if time permits. They both love fine dining and enjoy concerts and theatre. They both use the internet a lot and would like to plan the trip independently but where to go? Can they do what they want in the one week they have available to them in August. They do know the days are long and that suits them! 3. OSLO AND SURROUNDS A newly retired American couple are making their second visit to Europe. Last time they “did” a number of major icons – London, Paris, Rome – but this time they’d like to venture into Scandinavia and get a sense of the region. But they’re visiting friends in Edinburgh first. They’ve always wanted to experience a mini cruise but also want to see more of Scandinavia….. The question in every case is – how do easily do these “personas” plan a trip to Norway? How easy or difficult is it to find, review, compare the various stages of a trip? What routes could they take? At what point do these personas give up on the web and seek help elsewhere? In which case who is the elsewhere and how do they get there? How do the various suppliers work together or not? Does the ferry sell accommodation? Do the airline sites make it easy to book accommodation? How do the destination sites help a visitor decide what to see and do? Figure 3 provides a matrix – the columns represent various stages along the customer’s journey; the rows indicate different supplier channels that might act as a starting point. For each of the three scenarios, map the agencies in each category listed down the left hand side that are actively supporting the five phases of the customer’s journey above and see how easy or difficult it is for the customer to complete that journey……


Full Circle Marketing

If a destination is serious about being “customer centric”, it will realize that one all purpose site – even with localized versions – will no longer work for most potential customers. Instead of pushing information at customers, more effort has to go into engaging customers in meaningful conversations that reveal the customer’s intent. Having got the prospect to reveal what they are planning to do – what kind of experience they seek, it then behoves the destination to deliver information that enables the customer to proceed along its purchase cycle in a meaningful way. But that vital step won’t happen until suppliers see the world through the eys of their customers, realize how very difficult and frustrating it is to use the plethora of incomplete web sites and decide to do something about it!


Dancing With the Customer, Desticorp Paper, 2002