Christmas is over, onward through 2015!
So, many travel businesses will be awaiting the annual January sales rush, for many this months bookings will be a good barometer of how their year will pan out. Fingers crossed.
Its good to see the different TV ad’s (I must say, I do like P&O’s and Kuoni’s is very clever, amazing footage) and the different messages each deliver. I also note both Thomson and Thomas Cook are using tracks from Queen, just an observation.
So, how do customer chose whom to book through? We’re back to differentiation which I think come into four strands:
So, brand is tricky, its built up over time and is how the customers view the business (not how the business sees itself as I think many make that mistake – brand building is about attempting to influence the customers perception of the business by keeping the promises the business makes, that is different to projecting the internal perception of what the business stands for to customers).
Product is key in my humble opinion. Thomson have been going down this route for sometime. They’ve linked differentiation on Service to this. EasyJet have differentiated on service incredibly successfully (after all, from a customers point of view, is there material difference in product between European short haul airlines?)
Service, if one can really deliver on the promises the business makes to customers, service is a killer differentiator. Customers will come back to you again, the holy grail. This is how a business can really build trust especially when being brilliant when things go wrong. Ironically (and maybe frustratingly) there is a great deal more recognition for delivering help than there is for delivering a product when nothing goes wrong.
Price. This is key but nasty. Of course, all customers want a good deal but what is a good deal? it’s not just price but price matters and it matters a lot. If a businesses only differentiator is price then at some point it will be in a fight to the death with competition as someone will come along and undercut (through various means i.e.: process, technical, marketing etc..). I think one must mitigate absolute reliance on being the cheapest in the market by pushing focus to some other area of differentiation.
Differentiation (real differentiation) is difficult and risky. I received Michael Lewis’s ‘Flash Boys‘ from Santa this year. For anyone interested in business, economics, the banking disaster and risk taking, please read this book.
Essentially Brad Katsuyama (2 years younger than me, makes me feel I must achieve more!) worked for a bank. He was taking home $2m per year. He noticed market anomalies and uncovered some ‘dodgy’ practices making trading almost impossible. So, he set up new a new stock market called IEX (!!!). He quit his job and put all of this life savings into it to try to bring transparency back to the market. It’s quite a story (with one awful miscarriage of justice which I shall not disclose here, read the book!). Brad is up there with those I admire, his sense of altruism and whats right made this happen. Money was not the driver. Truth was (and I am sure remains) his differentiator.
It shall be interesting to see how differentiation develops this year in the UK travel sector. I am sure it will as we move closer to 2017 and in the UK / Europe, potentially changing and far reaching regulatory ‘tweaks’.