Segmentation vs Personalization in Tourism Distribution

Segmentation vs Personalization in Tourism Distribution

The big players in the tourism industry have a key tool with Big Data for optimizing both their product and its distribution.

Having the ability to break down what is really relevant in the data nebula in which we are immersed can greatly facilitate the customization sought in the traveler’s experience. Having the ability to discriminate between a segmentation and a personalization is one of the challenges facing today’s large hotel chains. What in many cases we use as tools to favour the distribution of accommodation causes an inefficient use that generates the opposite effect. According to a study conducted by the company Ometria, we can see how 60% of travelers develop a rejection of brands that do not know how to identify their needs through email marketing actions.

The natural evolution in terms of distribution from the traditional “one-to-many” segmentation is moving towards a personalization completely focused on a one-to-one level. Segmentation is a process in which data is used to divide the market into groups according to their shared attributes and interests. This way, the distribution focuses on definite population blocks.

On the other hand, for approaches to customization, custom delivery algorithms are currently used based on an ongoing learning ecosystem. The concept of continuous learning revolves around the versatility of a system that can adapt the product to parameters as different as its purchase history or the weather forecast of the origin of the purchase. Markets tend to optimize resources and automate processes through technology.

Therefore, it is convenient to adapt to these changes in order to wisely choose our “battles”, identify the channels in which we have to compete, and know how to perfectly discriminate against our most direct competitors.

We must keep in mind that true individualization is reduced to the personal request of each individual and the context of the individual’s request for the service or product that we can provide. According to a study conducted by the Harvard Business School, we extract how personalization can boost the return on investment of our marketing actions by 5 to 8 times. For this reason, it is important that we analyse the extent to which both the product and the service can be personalised, as well as the channels through which they can be distributed in order to be truly aligned and communicate along the same lines. On the other hand, an article by the consulting firm McKinsey points out that, although technology has an important role to play, the real challenge is to transform the organization’s processes and practices to extract knowledge and turn it into customization. 

At this point, seeing how personalized advertising can reduce acquisition costs, increase revenues and optimize the efficiency of our distribution processes, we should consider these perspectives as a reason to adopt this type of technology. Using factors such as the ones that we present below can help you implement or improve your hotel’s personalized approach:

We can meet the client before his arrival. It’s easy if you’ve booked online, even if you’ve never stayed with us. There is so much information available in social media, that we can know if you like golf, horseback riding or ludo. All of that is public information. But there’s more: if the client has already used a booking platform, we may be able to access their browsing history, see what they have consulted and what they have searched.

Special treatment for their specific characteristics. Information about your birthday, work place and favorite food is not hard to come by. Especially if it is a returning customer, congratulations or a special detail will be very positive. All customer information should be in the CRM.

Creating bonds with familiarity. Recently I was writing at this same place about how great it is to have a guest come back to the hotel and find his new room with the perfect temperature (the one he used on his last visit) and his favorite TV station already chosen (the one he watched the longest the last time). The accommodation becomes somewhat familiar to the client.

Evolve with the customer. Customers change over time. It is not the same whether the client is on vacation or on business, or with the family. Customer data must always be applied in the context of the moment. And this context is marked by the client himself with details such as his social interaction, for example.