Online travel markets are booming the world over with European travel
industry seeing the fastest regional growth. The total number of online
bookings has risen by 20% from 2010 to 2011, with UK consistently showing up on
top every year. At 47% online
penetration, UK overtook Scandinavia by a very small margin in 2010, but made
up for a giant 28% of the total European online travel share. As larger markets mature, this number is
expected to drop to 26% in 2013 but Great Britain will still continue to account
for the largest market share in Europe (eHotelier, 2009; European Travel
Commission, 2012; PhoCusWright, 2012; yStats, 2012).
The European online travel market is predicted to be worth €91bn in 2012 with focus shifting from mass
tourism to customised travel for the individual (eDigitalResearch, 2010).
According to the European Travel Report 2012 by yStats, more than half of all consumers
within Great Britain book their holidays online. Travel related properties
(online travel agents, destination information portals, transport and
accommodation sites) now attract about 44% of digital audience in Europe as UK
leads with 66.5% penetration, an 8% point rise from 2010. In April 2011, travel
giant Expedia, Inc. recorded 21.7m unique visitors to their websites
(TripAdvisor, Expedia and Hotels.com), making them the most popular travel
property in Europe (European Travel Commission, 2012).
Another survey carried out by the European Travel Commission (2012) shows
that 78% of travel professionals are increasing their digital budgets (social
media, SEO, content, video, mobile apps etc) in 2012. With the advent of
ubiquitous technology, larger companies have been investing in experience
enhancing models built around augmented reality and gamification.
Integration of innovative marketing solutions along with advanced
technical tools to measure their impact creates a significant gap between large
enterprises and SMEs or micro enterprises. Financial constraints, lack of
skills or misalignment of priorities leaves UK SMEs at the losing end despite a
large number of internet users in Britain booking travel and accommodation via
the web (Buhalis & Main, 1998). Travel bookings rank among top 5 e-commerce activities done online
(ACMA, 2010) yet a large number of SMEs can be seen focusing their efforts on
promotion than engagement (Braun, 2006; yStats, 2012)
Such contradictory statistics highlight the need to focus on internet
customer engagement. The European Commission has begun a demonstration project
to create an ICT and Tourism Initiative for SME’s, given the lack of digital
progress (European Commission, 2012; Amadeus, 2012). Engagement is critical but
formulation of goals and metrics is a task requiring local-level transactions
and enterprise-wide transformations (O’Toole et al, 2007; Gallup, 2009). Recent Epson Business Council research
shows only 29% UK SMEs acknowledging the value of customer engagement
(Lawrence, 2012). A survey of tourism SMEs in the European hospitality sector
shows that tourism SMEs are still reluctant to apply e-commerce strategies
regardless of the fact that the fast growing tourism industry is one of the few
to withstand in the current economy and has been predicted to create more jobs
in the future (Braun, 2006; European Commission, 2011).
The greatest advantage of adopting Web 2.0 has been its ability to
provide firms with personally owned media that allows them to engage customers
and influence them at desirable points within the transaction cycle
(Wanderlust, 2010).
Gallup’s research explains that fully engaged customers are more
profitable than average customers, while companies that have an optimized
engagement plan in action have a customer engagement ratio of 8:1 as opposed
0.8:1 for their counterparts without a plan. Furthermore, enterprises with
optimized engagement outperform their competitors by 26% in gross margin and
85% in sales growth. Engaged customers spend more, return often and stay on the
website for an extensive period. In the long run, engagement is the key to
sustainable growth (Gallup, 2009).
Strategies to create engagement are endless, with businesses going on to
explore different platforms. But as with any investment, one cannot gauge the
true reach of these strategies unless a concrete output is provided. Google
Analytics, Facebook’s Open Graph APIs, Omniture and other popular packages that
provide insight into customer behavior can assist in tracking engagement but
collecting information without any prior goals can cause an overload of data.
To reduce and consolidate data into what actually matters, it is important to
develop engagement metrics based on business objectives.
Literature explains that Customer Engagement is a step forward from
Customer Relationship Management. Along with the two core CRM concepts- Involvement and Interaction, Customer Engagement also addresses Intimacy and Influence. Metrics are then developed based on Engagement’s four
I’s (Hunt, 2011; Myles, 2011).
Customer engagement has changed the world of internet and experiments
are being carried out to develop tools that will help businesses to focus on metrics
to measure engagement. Totango, a tool that allows integration with SalesForce
and Apptegic assist in measuring engagement but so far their application is
limited to the SaaS companies. Companies with technical knowledge tend to
develop their own engagement metrics, such as HubSpot’s famous CHI (Customer
Happiness Index) Score, that helps them identify customers that are at a risk
of churning (Skok, 2011).
Investing in developing engagement metrics is an easier task for larger
enterprises, for tourism SMEs running on low financial and human resources,
such a task can be mistakenly viewed as high cost. The real issue is lack of
knowledge or training. Developing customer engagement metrics can be a
simplified process if one begins by addressing business outcomes (Haven &
Vittal, 2008; Skok, 2011)
An engagement measurement plan initiates with,
Consolidation of data
Using a data-intensive approach, SMEs can create a centralized system
that records cross channel data (Haven & Vittal, 2008). At this stage, it
is important to opt for a system that supports correlation of engagement’s
qualitative value along with rigid big data (Jutras, 2011).
Social listening is a growing trend that helps in recording interactions
between customers on forums, blogs, social networks (Vargas, 2010; Band, 2012).
Consolidation of the social data will enable SMEs to address engagement issues
that may usually be overseen. This data can assist in further market research,
sentiment analysis, sorting service issues and customer retention (Band, 2012).
Measurement Analytics
Emotional connection delivers, making consideration of psychological
theories (motivation, search pattern, cognitive dissonance) an imperative
(Haven & Vittal, 2008; Vargas, 2010).
Engagement is the qualitative ‘heart’ metric in between back and
front-end operations (Kaushik, 2007).
Similar approach is suggested by Peoplemetrics (2012) where both
emotional and behavioral outcomes are married to build engagement metrics. Fully Engaged, Engaged, On The Fence and
Actively Disengaged are engagement
segments that help in sorting customer responses. Further focus on these
responses helps in providing an insight into REAP- Retention, Effort, Advocacy and Passion
of a customer.
Peder (2009) for Unilytics suggests
an engagement model based on Act-React-Interact with the point being that every activity has its own value
that affects the company’s marketing success differently. No single activity or
event is the ultimate metric.
Consumers are passively and actively interacting with the brand at all
times. Setting metrics that record ‘visit
to an array of behavior ratios’ can provide a brilliant insight into Awareness-Interest-Conversion-Advocacy
cycle. Acquisition of such analytics can assist in development of tools like ‘Activity driven search’ or ‘Budget driven search’ to enhance
usability on the travel website (Gallup, 2009; Amadeus, 2012).
Websites are considered successful when they are designed to provide
utility and at the same time are able to entice users into investing their
time, emotions and attention by providing engaging experiences. Lehmann et al
(2012) provide a different view by explaining that so-called engagement metrics
used to measure web usage, are used as proxy for online customer engagement. An
in-depth approach based on self-reported
engagement, cognitive engagement and online
behavior metrics is suggested. To explicitly understand the value of
engagement, metrics should be developed around Popularity, Activity and Loyalty.
But popularity doesn’t always mean engagement. A Page Lever report from
2011 explains that a rise in number of Facebook likes results in decreased
engagement on the page (Constine, 2011).
Lake (2009) for Econsultancy.com suggests 35 social media engagement
metrics, some or all of which can be used by tourism SMEs. These KPI’s can be
measured with the help of Google Analytics or with the application of bespoke
technology. Econsultancy provides a great example in context to specific
metrics such as user generated content. Specific functionality can be built
into the web platform to generate trend reports for ‘comments’ or ‘forum posts’.
Literature review displays a variety of different opinions on which
factors induce engagement. Developing metrics specific to tourism SMEs
essentially requires addressing and identifying business elements that are
unique to the industry.
Aim and Objectives
Peter Drucker explained ‘The
purpose of a business is to create a customer’, but ‘creating’ a customer
costs 5 times more than retaining and sustaining the growth of an existing one,
making the role of engagement very significant (PeopleMetrics, 2010).
As service providers, tourism SMEs have always focused on the customer
but this practice requires further evolution into the digital. Taking business online
has some advantages despite the fact that one loses personal face-to-face time
with customers. The digital reach is wider, 24/7 shopping service is convenient
for the customer and the prospects of integrating new engagement tools that
generate more business are limitless. In addition to an improved service
experience, digital enables tourism SMEs to track, analyse and review customer
behaviour long before the actual shopping takes place. This information can
provide an insight into the demographics, search keywords, backlinks, landing
pages, popular platforms, operating systems, bounce rate and even complex
information based on individual goals set by the business. Detailed information
collected from different analytics packages will enable businesses to enhance
engagement through better web usability and improve user experience.
Blog posts and white papers addressing the concept of measuring customer
engagement have been on the rise roughly since late 2009. Until then, marketing
professionals struggled with developing metrics and eventually some refused to
acknowledge the unique existence of engagement as a separate entity (Mason,
2007; Shevlin, 2007). This has changed with the explosion and adaptation of
intelligent technology that facilitates creation of new interactive
experiences. HeBs Digital has predicted 2012 to be the year of SoLoMo (Social,
Local and Mobile). Convergence of channels and integration of SoLoMo is the new
trend in travel that is built on the concept of creating engagement (European
Travel Commission, 2012).
Engagement is a metric dependent on psychological and emotional factors,
therefore the correlation of performance requires an integration of
quantitative and qualitative. Large-scale tourism businesses have already
lifted up the ante by developing models that track online customer engagement.
For tourism SMEs to move along the same path, the biggest hurdle is the lack
of tourism specific knowledge. Most literature provides information targeted
towards larger enterprises or SMEs that sell tangible products. The unique
feature of tourism industry is that the product itself is an intangible
experience, there by making it in an imperative to track and measure the value
of customer experience and engagement throughout the Awareness-Interest-Conversion-Advocacy cycle. This data will not
only give an insight into the buying behaviour but also help tourism SMEs in
assessing the effectiveness of the actual tourist experience when
post-experience the customer goes on to refer others or buys again from the
same website.
The research aim is to develop
a model that will enable tourism SMEs to Measure The Value Of Internet Customer
Engagement.
SMEs tend to establish online presence without advance planning or
prioritisation and selection of channels that suit individual needs. At times
digital marketing services are outsourced, large number of clients on the
agency side results in online marketing that lacks industry specific
customisation. There is a need to raise awareness by adding to the body of
knowledge that constitutes application of digital marketing within the tourism
industry. Simply developing a digital marketing campaign is not enough, tourism
SMEs must learn to measure the impact and most importantly analyse whether
their actions are viable in sustaining customer development. Tourism SME’s need
guidance through a model based on metrics that can be applied to their
industry.
Four objectives of the study that will enable in achieving this aim,
Objective 1: Best practice for
developing effective engagement metrics
Epistemology, current trends, existing models, advantages of applying
engagement metrics, comparison of metrics used across large and small
enterprises and scope for improvement will assist in developing an
understanding of the best practice. Further analysis will be carried out to
address the feasibility and practicality of crossing the metrics over from
general SMEs to tourism specific SMEs.
Objective 2: Current practice for measuring online engagement in tourism SMEs and
scope for improvement
Travel market trends, internet marketing strategies, and popularity of
channels will help in reviewing current engagement practice, metrics and their
effectiveness throughout the cycle. Scope for improvement will be displayed
through the analysis of business goals and their alignment with current
engagement metrics.
Objective 3: Development of an
engagement measurement paradigm specific to tourism SMEs
Along with the conclusions from Objectives 1 and 2, limitations,
feasibility and usability issues will be addressed. Based on these, an
engagement measurement model will be developed with the aim to assist tourism
SMEs to value the impact of internet customer engagement and use this data to
develop customised digital marketing campaigns.
Objective 4: Conclusion and Recommendations (if any)
Methodology
This research will involve the application of multi-methodology,
incorporating the best of qualitative and quantitative.
i.
Ethnography
is a well-suited theory for qualitative research as it provides the researcher
a detailed look inside the issue being studied. Implementation of purposeful
sampling procedures will assist in addressing the key issues head on. Case
studies and one-on-one interviews with travel professionals and digital
agencies will help in collecting relevant data. Data will collated and analysed
using Computer Assisted Qualitative Data Analysis software like NVivo.
ii.
Quantitative
data will provide this research with a statistical insight. Data will be
collected through online surveys, interviews and analysed with SPSS. A further
insight into the Google Analytics, Facebook/Twitter insights, Omniture or any
other analytics packages of a few selected SME’s is crucial for this
research.
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