Targeting The Right People To Drive Sales Conversions In Uncertain Economic Times
Introduction
From COVID-19, to Omicron, to a mounting global crisis in Eastern Europe. We are living in uncertain times -- and that uncertainty has consequences for the way that people buy things, and the ways in which marketers can encourage them to buy. Under economic and social pressure, essentials tend to take priority, and consumers may either postpone or entirely eliminate what they consider to be unnecessary purchases. Depending on the circumstances, buying habits may range from extreme austerity to over-consumption and panic buying.
The good news for hospitality providers, vendors, and marketers is that in times like these, the show must go on. Organisations who thrive during an economic downturn are those that tighten their belts on operational efficiency while continuing to invest in marketing efforts. Those that prosper are organisations prepared to refocus, adjust priorities, and discover ways to maintain connection with the consumers.
How do you target the right people to drive sales conversions in times of economic uncertainty? This was the subject of an All-Star Panel at the DTA Virtual Summit. Speakers included Emil Petrov, Head of Strategy, Tourism New Zealand, Dyah Wulandari, VP Performance Marketing, Tiket.com, Julie Purser, Vice President of Marketing, Loyalty and Partnerships, APAC, Marriott International, Gibu Mathew, Vice President and GM, APAC, Zoho Corporation, and Samiha Alam, Head of Enterprise Partnerships, SEA, AppsFlyer. The panel was moderated by Akira Mitsumasu, VP Global Marketing, Japan Airlines.
The discussion considered the opportunities that travel organisations can take from changes in customer behaviour, digital and operational strategies for dealing with uncertainty, and the need to balance short and long-term objectives in developing targeting strategies for and during uncertain times.
Changing Customer Behaviour: Threat, or Opportunity?
For Tourism New Zealand, closed borders, rather than any perceived change in customer behaviour, have been the major threat in the wake of COVID-19. The knock-on effect of this for consumers has been a heightened awareness of health, safety, and hygiene issues, a general tendency to avoid risks, and a need for flexibility in travel planning.
Opportunities are available in the trend for more purposeful travel, in the coming years. While there may be less travel overall, journeys will be made for specific purposes, and to meet needs and criteria that really matter to consumers. For these excursions, customers will be willing to pay a premium, to make sure they get exactly the itinerary and services that they want.
“Travel with a purpose” or “travel for good” have also been growth opportunities for Marriott International. The organisation has created a new programme dubbed “Good Travel with Marriott Envoy” to address some of these shifting needs, and to create more sustainable programmes at Marriott hotels, for both loyalty scheme members and guests. In creating a suitable environment for these determined travellers, safety and hygiene are key concerns.
With international travel still largely restricted, there is also a hyper-local focus now, with domestic tours, “staycations”, and in-country offerings such as the “Marriott On Wheels” delivery service operating in India, and partnerships with Grab and LMA in China.
(Source: Marriot Bonvoy Traveller)
Dealing with Uncertainty
The cancellation of live events has been a particular threat to the fortunes of many organisations within the region. However, virtual alternatives such as the sale of tickets for online concerts have been an exciting new growth opportunity.
In an atmosphere of uncertainty where travel guidelines can change at a moment’s notice, flexibility has become paramount for consumers, extending to matters like rescheduling, cancellations, and refunds.
Hospitality venues currently have a low occupancy rate, making it a buyer’s market in which consumers can now gain access to luxury and facilities that may have been out of their reach in previous times. For organisations, this may open up opportunities, as travellers with an awakened taste for luxury demand more of it, in future.
The Effects of Digital Transformation
Within the region, digital transformation has been fuelling new possibilities for Business to Business (B2B) transactions. For example, businesses have been taking advantage of new digital avenues to offer cross-border services.
At the consumer level, digital technology has been transforming the home into a hub for work, social interaction, and commerce. Organisations with an agile and lean mindset and a willingness to embrace this new reality may benefit in future, by enabling the new digital-centric consumers to manage their own travel agendas through self-service portals and automation.
Targeting Strategies for Changing Times
In markets like Thailand where many consumers are booking travel and hospitality online for the very first time, customer acquisition remains a primary focus. As far as customer retention is concerned, with conditions on the ground still volatile, brands must be careful in their recommendations and targeting, to guard against making inappropriate suggestions, or promoting deals and options that are no longer viable. Marketing spend tends to be less on automation and programmatic efforts, and more towards service-based retention strategies such as providing new ways to redeem loyalty points, and improvements to customer service or self-service channels.
Organisations in the software and technical support arenas have been positioning themselves as educators and enablers, with for example, offers of free access to their applications and digital platforms, to help businesses return to a state of relative normality, in as quick a time frame as possible.
For organisations like Marriott International, a hyper-local approach is extending to targeting and promotion. The shift has been from international to local, to business and leisure. For example, the Envoy programme has been pushing special offers for extended stays where one member of a family is working, while the other family members are simply on vacation. Throughout the pandemic, Marriott put the focus on its members - for instance, by extending membership status, and eligibility for awards.
In addition, there has been a shift from in-person to virtual, with organisations having to create more seamless interactions to reach consumers digitally.
With access to international travel still restricted for many, the task for organisations like Tourism New Zealand is to “keep the dream alive” in the minds of consumers. This means putting the focus on brand building and selling what the destination has to offer as an aspirational goal for a future when movement once again becomes free. In markets where some movement has become possible (such as the recent reopening of Australia’s international borders), the targeting strategy is specific and simple: “Stop dreaming about New Zealand, and go!”
Balancing the Short and Longer Term
The current atmosphere of uncertainty gives organisations an opportunity to pause and pivot, and formulate strategies that address the short term challenges and generate value in the longer term. The key here is to make sure your organisation’s response to today’s conditions are part of a broader strategy for the long-term future.
For travel brands, this short term - long term balancing act requires organisations to actively redefine their role in the lives of customers today, as a foundation point for the relationships they will have with those consumers in the future.
Learning Lessons from Dramatic Change
Amongst consumers, purpose is at a premium, during this time of uncertainty. Travel, if it does occur, takes place for specific reasons, or with a set objective in mind. For travel organisations looking to engage with such single-minded customers, the emphasis is placed on what their brand can offer. The more uncertain the environment becomes, the more organisations will have to invest in brand building and differentiation.
Since the accelerated pace of change means that “the future is faster”, organisations must invest in making the necessary changes to cope with the shifts occurring and reshaping the very nature of tourism. As previously noted, organisations must act in the short term -- but with an eye to the longer-term future.
Successful brands must continue to place the customer at the center of their thinking, developing sensitivity to their needs, preferences, and capabilities. This helps establish what services and facilities to provide, and the deployment of the tools and platforms used to engage with the brand. An understanding of current and future trends in the market ensures brands keep pace with the needs and expectations of their customers.