Saturday,  August 8, 2020  1:12 pm

Op-ed: Now is the time for the travel industry to engage with customers like never before


Op-ed: Now is the time for the travel industry to engage with customers like never before
Dana Gain

Imagine we are there. We have done our jobs. The line chart shows a clear and consistent trajectory downward. Commerce is beginning to return for the first time. What is the impact on our business?

As we begin the process of returning to the workplace, it stands to reason we are at risk for the continued spread of the virus. As diligent as we expect to be, it is reasonable to assume small spikes in community transmission until a vaccine arrives. This is the reality we are facing for the next twelve to eighteen months. Customers will be cautious.

Our business strategy should be guided accordingly.

Some consumers may not be interested in travel in the short term. The mass appeal will return, to be sure, but the pace will be hard to predict. Risk tolerance will vary across demographic and socioeconomic boundaries. It begs the question, what can we do to support these customers during the transition?

Are there products or services we don’t currently offer that we could develop to serve this market? Innovation in the heart of our business that could offer peace of mind to those who are not ready to travel now but will likely change their mind in the coming months? Inclusions we don’t currently make available but should consider? What thought leadership can support true innovation and ingenuity as we face the coming months?

Blue ocean strategy may be able to help. This strategic approach has its foundation in the non-customer living outside industry walls. Southwest Airlines transformed the train and car traveler into an air passenger by charging less and getting customers to their destination more quickly. Yellow Tail Wine approached beer and cooler drinkers with two simplified wine flavours that would appeal to the masses. In these and other case studies from Kim & Mauborgne (2005), purchasers outside industry borders were pursued. These non-customers did not buy from us yesterday but, if approached correctly, may buy from us tomorrow.

How do we translate this into a solution for the travel industry?

We must consider that our intention is different. We are not pursuing customers outside the confines of this industry, it’s the reverse. Our customer base started out with us, but to some degree has departed. According to the blue ocean model, vacationers might be classified as tier two non-customers. For reasons of either interest or resources, this group simply refuses our offering. This is the eventuality we may be facing in the coming months.

What can we develop as an industry that will help us bring our customers back?

There are two crucial strategic directions to consider. First, pricing paradigm. We could investigate reimagining a pricing strategy to focus more aggressively on base loading and flexibility. Offer customers atypical purchasing conditions or layers while establishing enhanced protocols in the delivery phase. And second, determine what makes our product different. Customers have a multitude of options available on which to spend their discretionary income. What options can we build into the travel product that don’t exist today?

If there was ever a time to think in broad terms about what our industry offers our customers, that time is now. Some will return to us organically over time. Others will pick up where they left off, perhaps booking their future travel today. But what we have here is an opportunity to reinvent our industry to serve the customer like never before. It's hard to imagine anything more exciting. 

Let’s talk about it.

Dana Gain is a global sales and marketing executive with a 25-year career in the cruise, airline, hospitality and internet sectors.

Reference: Kim, W. Chan.Mauborgne, Renée. (2005) Blue ocean strategy: how to create uncontested market space and make the competition irrelevant. Boston, Mass.: Harvard Business School Press.


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