Customer and market knowledge
||“If my services would be based only on customer wants, it wouldn’t be so profitable. One tries to offer everything, the moon and the sky. But everything costs something. The service, however, has to be so designed that the customer feels that she gets what she pays for. And maybe she won’t be able to get it if the service becomes too good. On the other hand, the service can become so expensive that the customer is not ready to pay for it.”
Different sources and methods can be used to gather customer and market information. Information collected through customer surveys is easily comparable and usually is a precondition for those taking part in development projects. From a product development perspective, however, the information acquired through the traditional customer survey is not enough. The product developer’s gaze should be directed towards the different actors in the operating environment who should be actively involved in product development. As multi-stakeholder interactions are characteristic of the tourism industry, it is important to identify, recognise, sustain and help to develop the knowledge and expertise of key stakeholder groups.
|“For a long time we have been gathering customer information trough surveys that are filled by our customers after each safari. Also tour operators give us feedback continuously. Nonetheless, we need to think carefully about how to measure customer satisfaction. I would like to know how they experience our different services and perhaps there is something they would like to say about something that we haven’t been able to ask.”
Gathering customer information through different methods: Hotel Furgler and Jaakkola Reindeer Farm
As surveys do not always succeed in asking customers the right questions, it has become more important to use other methods in collecting customer information. In addition to customers, also employees are a good source of information. After all, they are the ones who create the product together with the customer.
Hotel Furgler, which is specialized in family holidays, is a good example of how important it is to use different methods for gathering customer information. The management of the hotel realised that traditional surveys were not delivering enough information for further developing the hotel and its services. As a result, the hotel started to try different ideas of collecting customer information. One of the ideas was to give customers a blank sheet of paper, on which they could freely give feedback without any kinds of constraints. According to some customers the hotel lacked activity programmes, which take place outside of the walls of the hotel. This helped the hotel management to develop a barbeque feast on an Alpine meadow, to which families are transported on an unusual, family friendly bus.
In addition to gathering feedback, the hotel employees are encouraged to observe what customers do during their stay at the hotel. Observations conducted by the staff help the hotel to further develop the hotel in just those issues, where the hotel doesn’t support family practices yet. In this way, the hotel realised that children hanging around and playing in the sauna area made the stay of parents and other adults less pleasant. The situation was solved by making the sauna area a children free zone during the day. In addition, the hotel offers families the opportunity to book a sauna turn for the evening, for example, in case the parents would like to go to the sauna together with their children.
The business couple of Jaakkola Reindeer Farm has been monitoring the behaviour, doings and sayings of customers during their visit to the farm – through the different phases of the customer journey such as the reindeer corral and the tepee. With the help of observation, it has been possible to understand that customers were much more interested in the way of life of people in the North than just reindeer husbandry and the reindeers. In addition, it was noticed that the stories told when visiting the corral were usually not paid attention to. Visitors were more focused on seeing the reindeers, following them and making pictures of the animals. Usually when the customers stepped into the tepee they started to ask the same things that were told while in the corral. As a result of these findings, the reindeer farm visits at Jaakkola’s were developed in such a way that the stories were moved from the corral to the tepee where customers can enjoy the narrative while watching a slide show.
Employees as crucial information sources: BaseCamp Oulanka
For example, in most activity programme companies we find professional guides who know the operating environment very well. These guides are able to provide information about product performance and possible areas in need of further development. In contrast to customers who experience the product for the first time, guides are experienced with the product as well as the customers using them.
BaseCamp Oulanka, which is a pioneer in nature-based tourism, sees its guides as the main source of customer and market knowledge. For example, climbing guides, who are passionate climbers themselves, are constantly visiting different climbing destinations in Europe and around the world. When they return home they bring new ideas and good practices.
Due to their hobbies, the guides are always following the latest trends and development in climbing equipment, thus keeping the company informed and updated with the latest market developments. As a pioneer the company is always searching for interesting products worldwide that could serve as models for product development. BaseCamp Oulanka operates basically as a knowledge-based organisation. It is not hierarchical, everyone is involved in everything, products are developed based on the best knowledge available and product development is an ongoing process.
Promoting expertise through networking: St. Lapland
If a company lacks expertise in a particular field, for example marketing and sales, it can be obtained through cooperation with other actors in the area.
Eight family-owned companies from Kuusamo in the Finnish province of Oulu have been doing cooperation within an internationalisation project that has contributed to bringing them together and networking with one another. The lack of a salesperson or sales agent was identified as a common problem related to the inefficacy of the companies in reaching international customers. The companies considered several different options for hiring a common sales force, finally ending up with a co-marketing strategy based on an export ring coordinated by Finpro – a business association offering internationalisation services.
Led by an export manager appointed by the companies and Finpro, the export ring seeks to help Finnish companies in launching an internationalisation process and establishing new distribution channels. The tasks of the export manager included operational marketing and the creation of both customer contacts and distribution channels for regular business transactions.
In a nutshell, export rings make it possible to hire a common export manager and thus facilitate co-marketing activities. The export manager appointed to the export ring of the companies from Kuusamo succeeded in working out – for each company – products suitable for the international market. Furthermore, by adopting a common name (St. Lapland) and trademark, these companies created more accessible and effective marketing communications with their customers. Not only international marketing is practiced under a common name, but a holistic product – formed by the services of the eight companies – is also offered to customers. This close co-operation has not excluded other companies from the area. And St. Lapland companies still compete with one another on the domestic market. In particular they compete for domestic customers looking for accommodation and restaurant services.
Promoting product development through enterprise resource planning systems
Product development is intrinsically linked to the development of business activities and processes irrespective of whether such development takes place on a firm, network or destination level. When the scope of business processes increases, enterprise resource planning systems contribute to enhancing information management and in some cases to promoting the development of business networks.
Travius, which was exclusively developed for the needs of the tourism industry, is a good example of a system that handles in a centralised way some of the most important business processes: offers, orders, invoicing, cash, reporting, customer management, e-commerce and operations management. Such a system helps companies to develop their business processes alone or together with other companies in case of a network. Product prices and orders can easily be transferred to business partners, commissions can automatically be calculated when transferring the order, product stocks can be monitored in real time in the network and among business partners, and all products from the network can be sold through the online store. Versatile reporting tools also contribute to the quality of the documentation.
What is this about?
Tourism companies usually use a relatively limited variety of forms for gathering customer and market information. It is important for product developers, however, to assess together with other business partners what information is needed and what kind of methods can be used for gathering certain type of information. Usually product developers tend to rely upon customer surveys that are based on the two basic assumptions that customers: a) know accurately in advance or remember – and are able to present – afterwards their own needs, desires, visions, expectations and experiences, and b) are able to express them clearly on a numerical scale or by using language. In principle, survey research is, however, based on terms and structures created by researchers and the solicitor of the survey giving customers a limited number of response alternatives.
Due to the nature of tourism products, it is risky to rely upon a single source of information and to analyse the obtained information from a single perspective. In the tool section, the handbook offers a number of different tools that can be used independently or simultaneously for gathering customer and market information. When designing products aimed at contributing to the co-creation of meaningful experiences, it becomes crucial to look at the customer practices and the situations that arise when the customer is experiencing and using the product. By observing customers’ doings and sayings in natural situations, we are better able to gain insight into how they engage in the creation of meanings. This knowledge is vital for product development.
The use of different sources and types of information contributes to turning our attention towards a variety of stakeholders who have valuable knowledge about the customer practices and the market as a whole. Guides, cleaning staff, waiters, salesclerks and other employees, whose duties are related to customer service, have valuable knowledge about the customer.
Mere customer knowledge is not enough. Rather product developers need to acquire, interpret and assess information from a market perspective. In this regard, the knowledge of salespersons, tour operators, national tourism organisations and export associations are of vital importance. Trend reports as well as blog writings can be a useful source of ideas for product development. Networking, in particular, can help product developers to reduce their number of work tasks and responsibilities, leaving more time for focusing on the acquisition of customer and market information. One doesn’t need to do everything alone!
Open the product developer’s workbook (link on the right). It will help you to apply the content of this page to your own case.