Are we controlling our chains of value?

A usual question that I, frequently, ask to the future of Touristology is… Do you think that it is worth investing in this enterprise OR to work on it in exchange for stock options? They reply focusing on if they like or dislike the services that the enterprise is offering, thinking about its marketing strategies, its sources of funding, the way it is organized in departments and jobs… All these visions are interesting BUT, Do you know THE KEY to a right answer?

Is this enterprise controlling its chain of value?

This is a fundamental question - I told them (for the thousandth time!!!), just remember, chain/s of value are like ecosystems, like cities, like ants… something emerge from it automatically (I, strongly, recommend the book Emergence to go deeper into this topic or this link about Emergence, OR the words of the father of Economics, Adam Smith, and his idea of the invisible hand). In the case of a chain of value, sooner or later, a leader will emerge. So, if you don’t control the chain of value, others will do it for you!

Of course, I’m talking about the chain of value created FOR and BY the customer, Touristologists!  As we saw here “It is the customer who decides who is a member and in which way adds value or gain its trust. Don’t make the usual mistake of a copyologist that defines the chain of value based on their preferences, contacts or interest. We don’t send goods through OUR chain of value. We attract, motivate, and seduce customers through it. For that reason, we have to use the chain of value created for and by the customer!!!”

Let’s see a way to answer this important question:

FIRST: What kind of game are we playing at? Innovation/specialized Tourism or Standarization /Generic Tourism

Standarization/ Generic Tourism? Then, the power to control the chain of value comes from economies of scale and, therefore, the possibility to offer lower prices. One example is McDonald's, as they buy a lot of meat they get big discounts. Ryanair, as they transport thousands of tourists, some tourism destinations (managed by copyologists) pay them to be on Ryanair’s routes. Booking (it is something similar, hotels pay to get tourists…) Google…. Good examples of Oligopsony / Monopsony?

Innovation / Specialized Tourism? So, the power to control the chain of value comes from Community power.

Community power is an old trick in the history of humanity, religions use it, communist parties use it… and nowadays big multinationals (like Apple) are using it as well.

SECOND: Do you have community power? Great! It is good bedrock on which you can build an enterprise and a good asset for your aim to control the chain of value. On top of this you can add two more tiers (you can be successful without community power but, especially in specialized tourism, it is far more difficult).

Let’s analyze some ideas about community power…

A)  Do you gain the trust of your customers? Do you motivate contacts between them? Remember, No contacts, No interactions OR any actions together… NO COMMUNITY

Do we have a community where people communicate with each other and have a sense of belonging? A way to achieve this is through this matrix. Where people that like, pro-am and professionals get networking and provide a powerful nucleus to build layers of profit as we explained here.

 B) Another way to get the trust/loyalty of your customers depends on the answer to the following question:  Is it difficult to find your offer in other places? Do you create your own mobile app? Providers /suppliers give their offers through it and you don’t use other kinds of intermediaries? We saw the case of blink here. We saw the case of ski resorts here. Recently, appears BeMate willing to combine apartments with hotelier’s services, creating their own community and developing their own mobile app (sleepover).

What do you think? Good examples?

 C) What you offer satisfies an IMPORTANT need of the customer? Or is it a need that the customer doesn’t care about? OR you offer something that is so difficult to explain that your customers don’t understand!!!

THIRD:  Can other members of the chain of value go directly to the customer OR create an alternative chain of value? Can other suppliers copy the idea? Can the suppliers go directly to the customer? Can other intermediaries /infomediaries create this alternative chain of value?

Can you provide examples of tourism enterprises and foresee their future using this structure? 

Some of my students (usually the ones that are tweeting, whatsuping, facebooking or gossiping like hens in the middle of the class!!! ) say that they find a lack of structure in my classes. Well, I share the same feeling; I find a lack of structure in their answers!!! On the other hand, other Touristologists always provide perfect answers (usually the ones that work with the concepts, search how to complement them using Internet, talk about them with their colleagues, other teachers and any professional of our beloved sector) Ummm… maybe there is a causal relationship here!!!

Anyway, do you want a structure? Here you have it! Maybe you can use it to provide a good reply. I hope so, for the future of Touristology!!!

Classical /silly mistakes in Marketing Research

I was lucky enough to begin my doctoral thesis in 1996. Lucky, because when my colleagues made their proposals they always added a word… INTERNET. So, I felt that it was compulsory to learn about it. At that time, I was (and still am) lucky enough to work/play with an internet developer (An A+ player in Steve Jobs terms) that always repeats to me… If you, really, want to learn about Internet you’d better learn to code for the web. So, Java becomes a new friend!

I like to have these two visions about Internet (business model and technological scheme) it allows me to have a more holistic vision about its evolution. As you know I, strongly, believe that life is better describes as a circle than as a line. In the case of the Internet’s evolution, it is true that appears an ascendant line (Web 1.0, 2.0. 3.0) but there are mistakes and truths that repeat over and over and provoke in me a feeling of “déjà vu” (sometimes this feeling is wrong, the capacity to know when this happens make you a good Touristologist!!!)

I would like to discuss here two of these mistakes in the execution and interpretation of Internet related Marketing Research.

1) A classical mistake is when new technology/feature appears (web pages, social networking sites, mobile apps…) and some people analyze its use at the beginning and extrapolate this analysis in to the future.

I don’t see any mistake here- Jordi!  Well, the fact of the matter is that the first users (or early adopters) are NOT representative of the average user. They are different; they like novelty, to try new things, some of them will forget about this feature when something new appears. You can call them trendy people who, very fast, try and use any new technologies/features. On the other hand, we have regular people that usually, stick with the things that they are used to.

Try to foresee how normal people will use the new new thing, analyzing the behavior of trendy people it is a like studying cats in order to predict dogs behavior!!!

This happened when, at the beginning of the web (web 1.0) people study the first users and try to foresee the evolution of how people will use Internet.

Something similar is going on with mobile and the debate about who will be the winner mobile apps or native apps. As I always say, mobile apps will be far more interesting when they allow departments inside an enterprise and enterprises inside a chain of value can work as a single organization. This capacity of integration is better achieved on mobile apps than in native apps.

I am not saying that they will be the winner in this battle. I only say, that from a Touristologists point of view, they seem more interesting!

When articles, studies, gurus claim that they can provide an answer and be sure that native apps are the way to go just for the way that first users deal with this new technology is… well, a mistake!

As this mistake is repeated over and over, it gains the category of a classic! Classics are classics because they are always true, they are timeless.

2) Another classical mistake is to analyze a new technology/feature in internet with a simple vision. Some people think that social networking sites (SnS) are only good to increase the number of visitors to your website then, they find/do a study /marketing research proving that SnS only mean a 2% of referrals to website of hotels. So, they conclude that it is better to expend your budget elsewhere (Search engines, OTAs, you-name-it…).

Do you really, think that SnS are only good for improving your web positioning? What about awareness of your brand? What about service management and service recovery? What about increase the feeling of belonging of your customers and employees?....

Do you want to avoid these classical mistakes? You’d better seek the advice of a Touristologist! They know the behavior of the new generation (sometimes called native digital) and also the old ones. They know about trendy people and the regular ones. They have the business model vision and the technological one. They have a holistic vision about tourism. They have a holistic vision of ALL the operations and processes of tourism enterprises… They are Touristologists AND they don’t make classical/silly mistakes!!!!

How to achieve the tipping point with mental states

As you know one of the bedrocks of Touristology is 1,2,3 Theory number 3 (also called Chain of Value) is the link between the demand (number 1) and the tourist services from the tourist destination (number 2). You also know that if you don’t control this chain of value other members will try to do it. The other day I saw this video..

What makes me tweet... 

In my opinion, it is a good example of several important topics that I like to highlight in my classes, seminars, in-company training or start-up meetings in order to define (or redefine!) their (OUR???) business model.

1) Chain of Value, Chain of Value, CHAIN OF VALUE !!! Did I already say that controlling your chain of value is a very important issue? Remember, chains of value usually tend to have a leader, if you don’t dare or you don’t care, others will do it and you will run the risk of becoming a commodity. As you can see in the video, infomediaries (that very easily also become intermediaries) and intermediaries (that very easily also become infomediaries) first they say to hotels, restaurants… any tourism service: 

-Please join us. Then when they achieve a decent critical mass of users and gain their trust, they know that they are masters and commanders of the chain of value and begin to fix their own rules.

“You can’t go away from me. If you don’t give allotment you will appear as far away of the first page (or set of options I present to MY customers) as it can be, you have to pay more commission, you…”

2) MY business or OUR business? Why did I write in the tweet that we can win the battle thanks to loyal customers? Because as you remember it is NOT my restaurant any more is OURS! In the XXI century this is the way to go. In services this is even clearer because we talk about servuction and, as you know, the participation of the customer is a fact.

3) A bad review in an infomediary is only a problem if it is alone. Do I have a bad review in an infomediary? Do they refuse to delete it? Well, let’s drown it! A bad review next to 1,000 good ones is pointless. You can even twist this idea a little bit more…. Let’s make the infomediary pointless. Let’s write bizarre reviews, for instance, give bad grades with great comments. Show to the world that this infomediary is not trustful!

4) Use the power of mental states and (if you are lucky) get the tipping point.

Do you want to defeat me? Ok! It will use my best weapon… my army of loyal customers. Do you realize that when you say that this is a bad place, you are also saying that my customers are tasteless?

You can offer a discount for any review, but there are many restaurants offering discounts and they don’t appear in the news (by the way for free!!!) What if instead you use the power of mental states? Your loyal customers feel angry (one mental state that compel actions) about the infomediary. They also feel that it was an unfair situation (another mental state). This is OUR restaurant (another one)… So, We will give you a lesson.

I will write a bizarre review (an action)… Me too… Me too…. Tipping point (The point where you get exponential increments NOT lineal)… thousand of reviews! Welcome to the tipping point era!!!

5) Create/cultivate/growth your own Social Networking Site (SnS)

Become a tourism enterprise able to cultivate loyal customers. Create your own SnS where it will be easier to provoke/promote positive mental states and avoid negative ones.

Just remember, to play with mental states is a fundamental skill for any Touristologists, because we have the pleasure to work WITH and FOR human beings and, nowadays, we live in a hyper connected society/world!

On the other hand, to build and manage your own SnS it is a sure bet to try to control the chain of value!!!

OK, Touristologists, carve those ideas in your mind! Five ideas that you can summarize in just one… BECOME A TOURISTOLOGISTS!!! The best minds working in the best sector ever!

Selling rooms is what I do, a copyologist was saying proudly …

Sometimes, I have the opportunity to attend meetings, supposedly related to tourism. I say supposedly, because I was fed up of listening to speeches from Mr/Ms. I-know-from-first-hand and I travel-twice-a-year-so-I-know-a-little-about-tourism.

I neither have the space, nor the intention of repeating their speeches here. On the other hand, is not necessary, because you can summarize it on the two golden rules of copyologists. Their favorite sentences when they talk about tourism: 

Rule 1- You know, first we did this initiative focus on local Tourism then, it will be easy to extrapolate it to international tourism. 

Rule 2- You know, first we did this initiative focus on generic Tourism then, it will be easy to extrapolate it to specialized one. I was fed up BUT, not anymore! Now it is a joy to attend these meetings. I don’t have to say anything, I don’t have to argue with anyone anymore… Nowadays, sooner or later appear one of my Touristologists and reply to the copyologists making clear why Touristology is a science and copyology… well, a copy! 

The other day, I was in one of these meetings. It was very interesting, not because any copyologist’s sentences BUT for the reply of one of my Touristologists! They talked about the tendency in Labour Law to let hotels to externalize all that is not its core business. They can externalize these non-core activities to anyone. Some of the attendants were afraid of the future of quality employment in tourism. 

Selling rooms is what I do - a copyologist was saying proudly. All the other activities are complementary services that I can externalize: Do the beds, serve drinks, clean the swimming-pool, serve breakfast. Thanks to this legislation I will be able to reduce my costs and become more competitive! 

Well, I don’t know about you -said a Touristologists- but I don’t just sell rooms anymore! Let’s clarify this once and for all… My business is NOT selling rooms or F&B… My business is to satisfy my customer, providing what they need, when they need it, in the way they need it! I provide experiences; I’m a provider of a service that nobody knows how to externalize. 

I know what makes people travel.

I know how to transform your tourism resources into a product / service customized to a specific segment.

I know how to communicate and commercialize through a chain of value.

I know how to set up this chain of value… I’m a Touristologists!!! Now externalize this or copy it if you can!

I was speechless for the first time in my entire life! But this is not a problem anymore… I’m a Touristologist builder. I have been helping to create hundreds of Touristologists. They’re spreading like a plague into the tourism sector around the world, changing the way we enjoy, manage and define Tourism. They are Touristologists, Touristology is OUR science and this is OUR blog!