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How Consumers Use Online for Travel

Jeffrey Grau
How Consumers Use Online for Travel Jeffrey Grau

For many consumers, travel planning is not just a means to an end, but an enjoyable activity in its own right. The intangible nature of travel makes it well suited for online research. PhoCusWright claims three-fifths of online travel shoppers cite search engines as resources to research their vacations.

A comScore study of search behavior prior to online purchasing found that a higher percentage of travel shoppers conduct relevant searches in the 12 weeks prior to making an online purchase than online buyers of computer hardware, apparel and sports and fitness goods. Some 73 percent of online travel buyers conducted relevant keyword searches in the weeks prior to an online travel purchase, and more than three-quarters of the searches performed by these consumers were based on generic terms as opposed to merchants’ brand names.

So what are consumers looking for when they conduct online travel searches? Forrester Research found that a majority of online travelers use search engines to find information about different aspects of a destination. Another popular use of search engines is to find pricing information. Over half the online leisure (52 percent) and business travelers (53 percent) surveyed selected this as a reason.

Forrester Research also found that very few online travelers start searches using the new breed of travel search engines most likely because they are not aware of their existence. While 33 percent of leisure travelers said they had conducted searches on Google for travel information in the past 12 months, less than a half percent said they had used Mobissimo, Kayak.com or FareChase. Yet Hitwise, a worldwide competitive intelligence service, found that it is through search engines that internet users are discovering these travel comparison sites.

A high proportion of visitors to travel search engine sites are arriving from general search engines. Yahoo! FareChase, for instance, received 39.3 percent of its visits from general search engines during one week in April 2005. This suggests that travel search engine firms are becoming effective search engine marketers. Also of interest, Hitwise found that visitors to the top travel search engines were by far likely to be over 55 years of age. Hitwise attributed this to baby boomers who, as a price-conscious group, have more leisure time.

Right now the vertical search engines are lacking in features and functionality. But there is every reason to believe that they will gain popularity because consumers want powerful price comparison tools. Online travel agencies have to be concerned that the travel search engines are siphoning off their customers.

“If travel meta-search engines deliver on their promise to efficiently find the lowest prices, then it is possible they will quickly and successfully insert themselves into the travel-shopping value chain,” says Bill Tancer, vice president of research at Hitwise.

When online travel shoppers move from searching to travel planning, they usually begin at an online travel website (54 percent), according to Nielsen//NetRatings research. This is because they offer one-stop shopping convenience. However, a visit to an online travel agency website is no guarantee of a subsequent sale. Four in ten online travel shoppers who begin their research at an online travel agency, according to PhoCusWright, ultimately purchase directly from a travel supplier’s website or call center. This behavior is more common for purchases of air travel than for hotel or car rental reservations.

Similarly, Feedback Research, a division of the Claria Corporation, an online behavioral marketing firm, found that 73 percent of respondents who purchased travel online researched travel at a general site, but then went to a specific company’s site to book their travel. Many of these survey respondents attributed their decision to lower prices and special deals.

“The wide selection of travel suppliers drive the majority of travel shoppers to begin their research with agencies and meta-search providers before directly visiting a supplier,” says Heather Dougherty, senior internet analyst at Nielsen//NetRatings.

Nielsen//NetRatings provides further evidence that online travel shoppers like to do research at travel agency websites but then move to supplier sites to make final purchases. The next two charts show the number of unique visitors and sales conversion rates for the three major online travel agencies and three leading airlines. Whereas online travel agencies excel at drawing visitors to their sites to shop travel, airline sites draw visitors who are ready to convert into buyers.

According to a Harris Interactive survey, price (78 percent) is by far the leading factor influencing adults to be loyal to a particular online travel agency. The problem is that not one online travel agency has demonstrated that it can consistently offer the best price. Worse yet, when price is the sole purchase determinant, online travel agencies almost always lose out to direct suppliers.

Not all travel segments are as highly price sensitive as the airlines. Flying is deemed a means to an end and the various carriers have achieved parity across the important purchase decision factors. What is left then to compete on is price. Hotel accommodations, in contrast, tend to be an intrinsic part of the travel experience. Price is a factor, but may weigh in only after other criteria such as location, brand name, customer service and amenities are considered.

When PhoCusWright asked online travelers to compare direct travel suppliers with online travel agencies by several criteria, direct suppliers scored higher on all but one --lowest price. But this holds little comfort for the travel agencies. The direct suppliers are closing the gap: While 38 percent of respondents to last year’s survey said suppliers offered lower prices, 14 percent said so in 2002. Direct suppliers have been aggressive this year in making their offers compelling to customers. By now the gap could be negligible.

“Online agencies have lost their footing with leisure travelers in 2004 as a result of aggressive supplier efforts to better manage inventory and win business through a combination of online and offline direct channels,” says Susan Steinbrink, analyst, PhoCusWright.

Suppliers have also gained an important advantage over traditional bricks-and-mortar travel agencies. Some 36 percent of respondents to PhoCusWright’s survey said suppliers offer the best customer service, compared to 33 percent who selected offline agencies. This means suppliers are getting very good at the one thing they do: for Continental, selling airline seats; for Hilton, selling hotel rooms. What is less a surprise is that direct suppliers beat out online travel agencies in customer service, although the greater than two-to-one margin may raise some eyebrows.

Jeffrey Grau is a senior analyst at eMarketer (www.emarketer.com).  This article is drawn from his new report, “Online Travel Worldwide.”

10. Mix it up. Change up the format of posts to keep readers engaged. We alternate between full-scale reports, interviews, news recaps, and more to keep our content fresh.

11. Link back to previous posts. Since we cover several facets of the digital industry, we often write about topics that relate to previous posts we've published. When this happens, we link back to previous posts, which provides necessary context to the reader and also helps usher traffic to pages that might have been otherwise missed.

12. Tag your posts. Tagging posts with relevant keywords will help readers find content by topic. Categories serve a similar purpose and provide a layer of organization to your blog that becomes more important as you produce more and more content.


13. Designate a point person. Our blog taps into the brainpower of several individuals across a company, so it's important that the buck stops at someone. Designate an editor with strong project management skills to keep assignments on track and keep content flowing.

14. Make posts shareable. Look at other blogs for ideas on how to make your content more shareable. We include links to share posts on all major social platforms, as well as a "Tweet This" button to simplify sharing across Twitter. Facebook's new "Like" button is also growing in popularity, and according to a recent TypePad study, is boosting referral traffic for some blogs by as much as 50 percent.

A re-tweet button makes it easy for readers to share articles with their followers. The share button at left has a similar function, and simplifies sharing across all major social networks.

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360i broadcasts new blog content to its fan-follower audiences on Facebook and Twitter, which together amount to several thousand people.

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Social marketing and blogs aren't replacing the corporate website, which still serves as a valuable hub for key information about a brand and its products. Who you are as a brand doesn't change all that often, so a corporate website by definition is rather static. However, "what you think" and how (as well as how often) you engage with your customer is increasingly important.

Consumers have come to expect more interactive brand experiences that keep up with the overall pace of the social web. This means that marketers looking to engage audiences on and off their corporate sites must adapt to become more dynamic, more prolific, and more social.

Sarah Hofstetter is SVP Emerging Media & Brand Strategy, 360i.

On Twitter? Follow iMedia Connection at @iMediaTweet.

Sloth: "We care about you -- your call will be answered in 600 minutes."

Ignore me at your own risk. I am not just one customer any more. I am me and my social media-empowered army of friends and associates. Make us wait longer than we think we deserve at your bar, store, or so-called hotline and our wrath will be heard faster than you can say, "may I help you." 68 percent of us will leave and never comeback, but that's just a fraction of your problem. A mighty minority of us will attack you like ninjas on Yelp or TripAdvisor or some other rating service leaving a lingering trail of forewarning rage. Yes, be afraid of sloth.

Avarice: "What do you mean your service doesn't work as expected?"

This one is as easy as 1-2-3. One: over-promise, two: under-deliver, and three: duck and cover. I think I'm safe in saying that everyone hates feeling they've been ripped off. This is less about the feeling that you paid too much for something. Sure that hurts, but that's usually on us for not doing our homework. No, this is paying for what you think is a premium service only to find out it's unreliable or doesn't perform as advertised. That tactic will guarantee recognition; however, it will most likely be on the "The Most Hated Companies in America" list.

Wrath: "You're pissed off? How do you think I feel?"

Chances are I wouldn't last five minutes on a customer service desk, especially when the fourth boneheaded caller/yeller in a row refuses to realize that his miniscule problem is, in fact, a user error. Be that as it may, shouting back at your disgruntled customers in person, on the phone, or online is a shortcut up "Schlitz" creek without the proverbial paddle. Just ask the folks at Amy's Baking Company how their epic tirade on Facebook worked out (hint: not so well). Even in the face of "wait until you hear this one" user incompetence, customer service interactions need to start with a bit of empathy and be driven by the sincere goal of turning each and every detractor into a brand promoter.

Gluttony: "We're so happy you're our customer. Want fries with that?"

We get it. Just about every business wants to sell more products, usually with a priority to its existing customers. And reaching out to your existing customers in person, via email, direct mail, or phone can be beneficial to both parties, especially if the interaction coincides with a need cycle. But there's a line here where enough is way more than enough. It's a line that once crossed, replaces receptivity with fervent animosity, followed by a vitriolic tweet decrying the thirteenth contact by Brand X that particular week.

Pride: "Honestly, we're too busy right now to care about your little problem."

The flip side of overselling is acting disinterested. This is particularly the case in social media when brands have a presence, but consciously or unconsciously ignore relevant conversations. To label this behavior prideful may be a stretch, though it does send a message that the brand simply can't be bothered to converse with the hoi polloi or the masses. The big risk here is that you could unwittingly ignore a customer with influence -- who responds by turning your cold shoulder into a hot topic.

Lust: "Nice to see you again Mr. Jones. You there, get back in line."

Showing preference for one type of customer over another is tricky business. Airline reward programs come with a sense of fairness: Fly more and enjoy clearly defined perks. But treat one customer better or worse and you're begging for animosity. For example, the cable company that breaks protocol to respond faster to an outage at a celebrity's house is likely to get an earful from the regular (and ignored) guy around the corner. The extreme case here is when Chick-fil-A's CEO expressed preference for "traditional" families, generating a firestorm of brand hatred.

Envy: "Did I mention we're just like Apple, only..."

Perhaps this has happened to you. You're shopping for something and the sales person says, "This is just like the leading brand, only many dollars cheaper." So you buy it, head home, and open the box only to discover that instead of saving money you wasted it on an inferior product. Yeah, that pisses me off big time, especially since it's so avoidable. It's OK to make cheaper products (in fact, thanks for giving us choices) as long as you manage our expectations and don't pretend to be something you aren't.

Control: "Press 0 as many times as you want. There are no humans here."

Want to see unadulterated ire? Piece of cake -- just make your customers feel helpless. For example, don't bother telling the passengers in the terminal that their plane is delayed until an hour after it's too late for them to do anything about it. Or don't offer a digital support center that empowers your customers to make adjustments to their accounts at any hour of the day from any device. Or, my favorite: Remove the hit "0" option from your customer service phone tree, setting up the opportunity for fruitless loops of avoidable anger.

Final note

There is a silver lining within all this talk of hate and "sin." Customers that express brand hatred are a bit like the friend that tells you about the spinach in your teeth. It's embarrassing for sure but not as bad as the real enemy here -- indifference. Vocally angry customers are creating the opportunity for your brand to address their issues. You just need to be listening and then try to remedy the situation. Indifferent consumers are quietly unsalvageable.

Drew Neisser is founder and CEO at Renegade.

On Twitter? Follow iMedia Connection at @iMediaTweet.

"Frustrated young woman yells at a man" image via Shutterstock.


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