Tuesday, April 17, 2012

Who is your customer?

It seems that New Zealand's two main Travel Media Companies, AA Travel and Jasons Travel Media are tag-teaming one-another in a war of words against those pesky Online Travel Agencies (OTAs).

In the midst of a campaign, to win the hearts and minds of Kiwi accommodation advertisers, Pete Blackwell, CEO of AA Travel continues along the theme of dissing OTAs, including recent TripAdvisor spinoff, Tingo.com in today's latest advertiser newsletter.

OTAs offer a one-trick-pony platform by reselling room inventory from consumer focused websites and are rewarded by performance (ie: commission).

The AA & Jasons offer a multi-media referral service across print and digital platforms where advertisers are required to pay most fees upfront.

With two distinct platforms - one focused on consumers and the other on its advertisers, it's interesting to contemplate what will prove to be the more successful? 

In AA's latest advertiser newsletter, Pete Blackwell comments:   
"I think one of the challenges in this online world is defining ‘who is your customer?’ I get into discussions with accommodation businesses who feel AA Tourism and Jasons have the same function as the commission-earning online travel agencies (OTAs). You know who the big OTAs are and it seems more are popping up every day. The big difference to me, between us and them, is who these companies think their customers are.

For us, our customers are you, the tourism businesses of New Zealand; for the OTAs, it is the consumer. Understanding the difference is vital.

With the recent launch, by a major OTA, of a website which guarantees the lowest price, (and will reimburse consumers if the price drops), the OTAs have demonstrated that they are willing to do whatever it takes to win consumers, and that means lower prices and lower yields for you. They also don’t care about your business future. They take your commissions and reinvest it in their own marketing, not to help you or grow your destination, but on Google AdWords on search engines, so they can further separate you from a potential customer. Their eyes are on the consumer and you are their product.

I know many of you see the ‘pay for performance’ model as appealing, but it is very dangerous to consider OTAs as your friends. They are an easy way to do business, but all they are really doing is competing with you, hiding your phone number and contact details and commoditising your business by making the price the most obvious differentiator to your competitor.

We see our job as getting the consumer to talk with you, to transact with you through your most profitable channels, (your own website, your telephone and reception) and to invest in growing the market. There is little point in just slicing the pie… someone has to grow the pie. You are our customer and we must drive you solid business at the best possible yield and also promote your unique value, your unique experience, not your discounted price.

See you on the road.

Click the "Get Widget" link below to place this widget on your website or blog!