TARGET SEGMENTATION
Those who work in tourism know how important it is to offer interesting and personalized experiences.
A great holiday is in fact characterized by memorable and personal experiences for travellers. To achieve this goal, workers in the sector must juggle the delicate balance between the characteristics that make the chosen destination unique and the multiple needs of their customers.
Personal communication skills, analyzed in the previous unit, play an important role in this case, as they allow tourism professionals to involve and empathize with customers. These skills not only improve customer satisfaction, but also streamline marketing activities if they are well integrated with a set of customer analytics processes. In this unit the concept of customer segmentation will be explored.
What does customer segmentation mean?
Customer segmentation corresponds to the process of organizing and dividing customers into groups – segments – based on common characteristics, behaviors or needs.
This procedure involves the collection, analysis and implementation of data. Collecting relevant data can be done from various sources, the most common being CRM systems, surveys or website analytics. This data is subsequently processed to identify significant patterns and segments.
Categorizing customers into homogeneous groups allows us to obtain a better understanding of preferences, motivations and patterns of choice of services.
Companies can thus customize their marketing, product development and service offering strategies to effectively target and engage specific customer segments.
The advantages of good customer segmentation are many:
- Adapting marketing messages to specific segments, personalizing them contact with the customer and the effectiveness of communication campaigns.
- Identification of the customer segment with the most value for the company and consequent.
- Resource allocation.
- Customer loyalty.
Customer segmentation is based on broad classifications, dividing customers based on general and recurring characteristics or behaviors. This is why it is advisable to identify a limited number of segments to use for strategic decision making, such as marketing targeting, resource allocation or identifying high-value customer segments. It can be said that segmentation helps companies make informed decisions based on a general knowledge of their target.
Segmentation variables
Segmentation is structured based on various variables, the most common are demographic data (age, sex, income), geographical location, psychographic data (lifestyle, values, interests), behavior (purchase history, involvement ) or specific needs (price sensitivity, preferences). Each company chooses the variables based on the data it has available, the reference sector and the objectives it wants to achieve.
Segmentation approaches:
Demographic segmentation
based on age, gender, income, education level and/or other demographic factors.
Psychographic segmentation
based on lifestyle, interests, values or personality traits.
Behavioral segmentation
based on purchasing choices, behavioral patterns, loyalty or involvement with the company.
Geographic segmentation
based on geographic location, such as country or urban/rural areas
Here are some examples of segmentation of the tourism market to understand how companies can adapt the offer of services to specific groups of customers.
- Hotel that caters to business travelers by offering conference rooms and fast Wi-Fi.
- Tour operator for adventure lovers offering packages for excursions and extreme sports.
- Family-friendly cruise offering children's activities and childcare services.
- Resort di lusso rivolto a clienti con un alto reddito offre servizi esclusivi e ultra-comfort.
- Travel agency with types of destination aimed at pensioners characterized by exhibitions and cultural events.
Guidelines for tourism businesses
DATA COLLECTION AND ANALYSIS:
Collecting data from CRM systems, surveys, website analysis, social media etc allows you to analyze it to extract significant information for identifying models and target segments.
RELEVANT VARIABLES:
Identify segmentation variables relevant to the tourism industry and your business. Generally, the most useful are those linked to demographics (age, gender, income), geography (location, travel preferences), psychographics (interests, values, lifestyle), behavior (frequency of travel, purpose of the trip) , or specific needs (adventure, luxury, family, education).
MARKET RESEARCH:
It is a good idea to always stay up to date on the latest developments in the sector, conduct market research to understand the emerging needs of customers or study those conducted by similar companies.
FOCUS ON SPECIFIC CUSTOMER NEEDS:
The segments should be as close as possible to the real needs of the company’s customers. For example, segments could be based on adventure-seeking travelers, culture enthusiasts, sports-loving travelers, eco-conscious travelers, or budget-conscious travelers. Each segment should have unique characteristics that can drive targeted marketing strategies.
PROFITABILITY ASSESSMENT OF SEGMENTS:
Ensure the commercial validity of the identified segments. Segments should be large enough to justify the allocation of human/financial resources and capable of generating sufficient revenue. Evaluate the market potential, growth prospects and profitability of each segment.
ACCESSIBILITY’:
Evaluate the possibilities for interaction. Is the company able to get in touch with the segments identified through its marketing channels, service networks or partnerships? Analysis of one’s operational capabilities with respect to the relationship with the segments.
TAILORED MARKETING:
Creating personalized messages for each segment allows you to offer communication and marketing tailored to the customer and create promotions suited to the characteristics of each segment.
COLLABORATION:
For good segmentation, collaboration between the various departments/roles within a company is necessary. People in marketing, product development, sales and customer service must share information and coordinate their activities.
CONTINUOUS MONITORING:
Regularly monitoring the performance of each segment allows you to evaluate the effectiveness of your strategies, marketing campaigns and product offerings. A certain flexibility allows you to adapt the segmentation approach to the evolution of customer preferences and market dynamics.
The European tourism market
This site reports an interesting infographic based on market research carried out in the tourism sector in Europe and allows us to understand, with data in hand, the various customer segments, the characteristics, the numbers and the value on the market. It is a useful tool for setting your segmentation and making wise choices regarding your company’s portfolio.
