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Published on Monday, June 20, 2011

There's no need to discount, says Carrick






A marketing guru who was once the boss of a tour operator whose philosophy was' stack it high, sell it cheap' has admitted there is no need for travel companies to sell holidays at knock-down prices.

Richard Carrick, former CEO of MyTravel, told delegates at the AITO conference that his thinking on discounting has changed over the past three years.


"I have come to think that you don't need to offer a discount," said Carrick (pictured here).

"Don't give too much away too often, and if you do make a customer an offer explain why, Don't let people think you are a company that discounts."


Far better, said Carrick, to give repeat customers recognition, a personal service, than money off their next holiday.

Carrick, president of the Chartered Institute of Marketing Travel Industry Group, also dismissed the firmly held belief in the travel industry that customer loyalty is key.

He said a study by Harvard Business School proved that companies become more profitable by focusing on disloyal customers than loyal ones. "The most profitable customers are heavy spenders, who spend money across a portfolio of brands, who are not loyal to any one particular product," he said.

Companies should spend more time working out what customers value and stop doing what they don't, said Carrick, but he said customer questionnaires were less useful in finding out about what the customer wants than third party reviews.

"I've come to the conclusion that questionnaires are largely a waste of time, and you should think carefully about how you are going to use the information before asking customers to fill them out. Most companies don't know how to use the data they collect."

His key message was don't do anything unless you know what your business will get back as a result.


 


by Linsey McNeill

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  • Tell that to the tour operators!

    As an internet based company, I am getting emails virtually every day asking for our best price (whose best???)or last minute deals. I send them a link to TUI or T.Cook. We don't want cheap holiday seekers, they are nothing but grief and you just end up being busy fools.

    By Paul Davis, Monday, June 20, 2011

  • AITO vs Airtours

    In many respects its horse for courses. AITO members are not Airtours. Richard is right that most AITO members can sufficiently differentiate their offering that they can avoid discounting. On the other hand a mass tour operator has to go with the discounting model.

    By David Burdon, Monday, June 20, 2011

  • Common sense at last!

    I've been saying for ages, crazy discounting just cheapens the product and the industry. Heavy 'discounting' begins on Boxing day when all the ads hit the screens/papers Anybody with half a brain knows that the 'offical' price is a fictional number anyway which means nothing. A certain cruise operater is already ofering £1000 off 2012 crusies, it means nothing and just comes across as underhand tactics. Price fairly from day one, ban discounting and lets begin the long process of re-training and regaining the respect of our understandably cycinal customers.

    By Keith Standen, Monday, June 20, 2011

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