Sixty odd years have passed since the post WWII sister city movement formed to bring the world back together again. The movement is still strong but it's time for the focus to change.
As visitor development manager for Hutt City, international relations falls with me. When I first started I had visions of international relations being a series of councillor delegations to far flung cities with little interest in anything more than the travel and a personal cultural experience and certainly no tangible benefit to the city. Well in reality there was a bit of that, but we have refocused what sister cities means to Hutt City and we have become much more strategic in how we manage sister city relationships.
Do you want sister city relationships?
Firstly we had to decide what we wanted to do with sister cities. Hutt City has four sister city relationships of varying types: Tempe, AZ, USA; Minoh, Japan; Taizhou and Xi'an, China. One of these relationships was generating tangible benefits to the city in terms of culture and paying visitors coming to Hutt City. The decision was made that Hutt City would be proactive with the cities generating economic benefit to the city and responsive to those that weren't.
Another mind shift was to have future international relations (not sister city relations) with cities of strategic benefit rather than random darts at a globe.
Who pays?
A culture and expectation of the host city paying for everything was of little benefit to us when visiting delegations are often quite large. Now we insist on paying our own way when travelling and they do the same when visiting.
Throughout the year we receive several delegations from one off cities. Previously we used to buy them lunch and give them a presentation on how our city is managed. We still buy them lunch but now we charge them for the presentation which includes lunch.
Who travels?
The Mayor should always travel even if it's just for the first day or two. The power of the Mayor, particularly in Asian cultures, can't be overstated. Travelling with the Mayor we might have the CEO and one manager.
Other than that it is only businesses who travel. We invite businesses and schools to come on what we now term 'business missions'. These businesses pay their own way.
What happens on the Business Missions?
Yes we still go and visit a temple and get a bit of cultural grounding before launching into business but ultimately our focus is to ensure our businesses get the most from their mission.
Prior to travel we coordinate with the overseas Chambers of Commerce to set up appointment streams with business contacts that will help our businesses meet the objectives of their mission.
What benefits have we seen?
- we still get the cultural experience and tolerance which are the underpinning values of sister cities
- schools are receiving fee paying foreign students
- businesses have developed export and import avenues
- one new business has been developed specifically to cater for visitors from one market
- currently sourcing an agent in Hutt City for a Chinese exporter
- lots of ideas for development in our city
Our total budget for international relations has been cut by 40% and the increased benefits are enormous. I would really like to hear from other cities working their way through managing their international relations. I would also be happy to talk in more detail about what we have achieved.
David Hancock is the visitor development manager for Hutt City, Wellington, New Zealand and would be delighted to receive comments on this or any other topic.
http://www.huttvalleynz.com/
http://www.facebook.com/HuttCity.Wellington
My last post talked about what we have done with service at our retail domestic travel outlet to generate record revenue months with a 28% downturn in customers. It's easy to think of all the things we have done inside our retail space to present product and make customers want to stay. But most interesting are some changes we have made to the appearance of our space for people on the outside looking in to allow us to engage with prospective customers before they step inside the door.
How we engage with customers from the outside in
- People looking from across the road do notice us
- People looking through our shop front window have several planes to look at and through
- We physically engage with customers after hours
Through the window
I once did some marketing evaluation work for an architecture firm. A wonderfully talented young bunch of creative people, an equally creative shop front and their work space upstairs but customers just did not come through the door. Downstairs was a selection of models of buildings they had designed and these were displayed on stylish plinths amid a sea of large pebbles; wall to wall, front to back. Nothing else disturbed this space except for the set of stairs in the back corner which lead up to the business end of their architecture practice.
The shop window of these architects was far and away the most paused at by pedestrians along this stretch of retail but nobody new what was inside. Interviewing everyone who stopped and looked in the window, not one person new that they had just seen the work of architects. Guesses of art installation, vacant retail and others but nobody new it was an architecture firm.
The window which all these passers-by had stopped at had the company name on it but they weren't looking at that, they were looking inside to this wonderfully artistic space. We quickly got a sign on the back wall and then all of a sudden everyone new what they were pausing to look at.
Of course an architecture firm is not going to get by on foot traffic but the example does demonstrate the way people engage with shop fronts.
People want to engage with you before they step in the door
From across the street
I did some work for a pub whose customers amounted pretty much to a few regulars sitting on their stools each evening and the rest of the time was next to dead. There was nothing inherently wrong with the appearance or feel of the pub on the inside, but a quick walk outside and across the road once during the day and then again at night showed up two problems. Day or night, passers-by could not see into the pub because of window treatments. Worse still, at night, nobody could see the pub because almost every bulb on the outside of the building had blown.
With a week of well lit evenings on the outside and people being able to see into the establishment during the day or night, we all of a sudden had patronage.
Impressions of what's inside can start on the outside
What we've done
The main entrance to our retail outlet was cluttered by an old red phone booth. It didn't do anything except sit there and take up space. We moved the phone booth into the centre of the outlet and it now serves as an attention grabbing display case. The entrance has now been opened up to make it brighter and more inviting and real product can now be displayed there.
We've removed stickers and posters from our windows so passers-by can see inside to get a feel for what we are all about.
The focus for displays had always been inward facing to the point of having a display wall blocking off a huge window. From the outside all people could see was the back of a display wall. We have reduced the sizes of our display panels from two or three large panels on walls to five or six displays in the middle of the floor space. Now people can look in and between our displays from the outside and visually engage with us before deciding to come in.
We've cleared the windows and created fore, mid and background displays for people on the outside to be visually engaged
After closing
After closing our displays are lit and we stand out. We have also placed some promotional material outside in a plastic flip top box which is mounted to the wall. At first we thought that this box would be smashed and our material scattered to the winds. But after more than a year of having this display, we are without incident and the top ups required are testament to its use. Now people arriving outside of our opening hours can take a brochure and be a bit more informed when they phone, email or come back when we are open.
A simple plastic brochure box lets us communicate with customers and tell them that yes we are closed but we are still thinking of you
Now I did say that customers are down 28% on last year but I believe the efforts we have made have reduced the impact of what the downturn in customers could have been. I also believe that customers are seeing us as an ever changing business that they are interested to engage with. The staff are also enthusiastic in this culture of change to see what effect our efforts have on business.
David Hancock is the visitor development manager for Hutt City, Wellington, New Zealand and would be delighted to receive comments on this or any other topic.
http://www.huttvalleynz.com/
http://www.facebook.com/HuttCity.Wellington
New Zealand is in a recession and the media continues to tell us about the receiverships, the liquidations, the redundancies and the closing doors. I have no doubt that the effects of the recession have been catastrophic for some businesses and there was nothing that could be done to save them. It does bother me though that some businesses sit back and cop it on the chin and say, well business is bad because we are in a recession and that's that. This post is about some of the things we have done to try and get through this downturn; the results have really surprised us.
One of my day to day charges is a domestic retail travel outlet
The customers to this business are locals, regional and international visitors. Over the past six months April - September, customers through the door have been down between 9-28% compared to the same months last year.
Despite this downturn in customers, revenue is the highest it has ever been for each of those months. The increase in revenue for any of those months is between 10-40% on the previous best result.
Customers through the door are significantly down over the past six months but revenue is hitting records month after month.
How we achieve record revenue with reduced customers
- we have maintained some marketing initiatives and increased others
- we have reiterated our previously trained sales techniques to our staff
- we give an instant reward for add-ons and up-sells
- we communicate with customers in ways that might surprise them
Our sales techniques
We introduced sales training to our staff several years ago but it's only now that times appear to be tough, with up to 28% reduced customers that we can see the benefits. I think it was one of those things that you do in faith but don't really see the benefit at the time.
Those are 'Our' sales techniques too. There are quirky things with every business that will require sales techniques tailored to that environment. The way people move through our space, the areas we have to engage with the customers, the way we display our product all influence the sales techniques we use.
We have banned a few things:
- Sitting down - replaced with a big standing heart felt 'Hello' or 'Kia Ora'.
- 'Can I help you?' - replaced with 'I see you are looking at the ...' and conversation naturally flows from there.
- Letting 'I'm just looking' stop us - replaced with a reply of 'Have you been in here before' which they invariably haven't and so we can introduce them to the three distinct product areas and the conversation usually flows from there.
- Offering the cheapest price - replaced with having a conversation with the client and finding all the details and then providing the right product.
Develop sales techniques that work for your environment
Instant reward for add-ons and up-sells
We have 'the badge'! A little Kiwiana badge that doesn't look out of place on the uniform. Only the staff know what this badge is for and they want it. As soon as an up-sell or add-on is achieved, word is circulated to the staff and the badge is handed over. So far the results have varied from a stamp for the postcard through to $600 worth of accommodation for the free map they came in to pick up.
A simple but instant reward and recognition
Surprising customers with communication
Conversation with customers initiated by questions has not only gained the confidence of our customers and shown a real interest in them, it has also developed a new skill in our younger staff; conversation!
We have done the usual email newsletter and social media but the real difference in all this has come from taking the time to find out how our customers' purchases have worked out for them. We know when a customer has completed their travel and at that time we pick up the phone and talk to them about their experience. It is amazing how much repeat business we get from doing this and sometimes we have another booking before we've hung up the phone. At the very least we have done something that has pleasantly surprised the customer and we can almost guarantee we'll see them in the future and if not them it will be their friends who they've told.
Have real conversations with customers and check how their purchase turned out for them
The past and the future
The training and extra communication efforts of the past have paid off for the situation we find ourselves in now. If we were starting from scratch there would be improvements in business performance but not to the levels we are experiencing now.
We do worry how much longer we can keep getting more from less. Eventually we will have peaked and we will be getting less from less. At the moment we are not sitting back and letting the New Zealand and global economic downturn happen to us. It is motivating to everyone to see what we are achieving but I can assure you our fingers are still crossed behind our backs.
David Hancock is the visitor development manager for Hutt City, Wellington, New Zealand and would be delighted to receive comments on this or any other topic.
http://www.huttvalleynz.com/
http://www.facebook.com/HuttCity.Wellington
Working with motels and smaller tourism operators I often have discussions with them about paying commissions. Back in time forgotten, a now unknown sayer spread a story about the evil in paying commissions. And now the universally accepted tourism industry distribution network is left to slowly spread the story of the good in paying commissions.
Tourism has a Distribution Network
I hate to start with tourism 101 but like every industry that exists, the tourism industry has an accepted distribution network. This includes but is not limited to: consumer to supplier, consumer to retailer to supplier, consumer to retailer to wholesaler to supplier. This distribution network has a marketing expense for every component, regardless of how the consumer ultimately purchases from the supplier.
Commissions are a Marketing Expense
From the resistance I have heard to commissions, it appears that the barriers go up based on how a business records the commission in their financial accounts. Resisters will say that paying commission is a simple reduction in revenue. However all revenue received has a cost through the marketing undertaken to achieve that revenue. Different sectors of the tourism industry will have different benchmarks for what is an acceptable 'overall' marketing expense as a percentage of 'overall' revenue. Some marketing efforts will cost more than others and the resulting revenue will also vary, but ultimately an accommodation provider, for instance, could be accepting of a marketing expense at 10% of 'overall' revenue.
Accept that there is a distribution network for tourism as with every industry and that distribution has a marketing expense and we are well on the way to having a cohesive distribution system for the tourism industry.
The Good in Commissions
An accommodation provider will have their product advertised and promoted through media, many and varied. This advertising and promotion has a cost. An advertisment in a regional publication is a good strategy and these advertisements generally have a very high cost, sometimes as much as $4,000. Now while this is probably a good use of the marketing budget, the accommodation provider is often unaware of how much revenue has been derived from this advertisement. Asking where you heard about us is good but it's not fool proof.
Commissions, unlike any other form of distribution and resulting marketing expense, have the beauty of no revenue - no marketing expense.
If the marketing budget was to blow out as a percentage of revenue, the accommodation provider can be guarenteed that this is not due to paying commissions. No matter how many rooms are sold, at whatever price, the commission will always maintain an acceptable percentage of revenue as a marketing expense.
Consumers Embrace the Distribution Network
Consumers will surf the net and contact an accommodation supplier directly and make a booking. There are still consumers that don't use the internet and want to talk to an agent who will make the booking for them. Consumers will read about accommodation in brochures and book direct and others will want further information from an agent. This is the tourism industry distribution network in full swing.
When the agent contacts an accommodation supplier on behalf of the consumer, this is the agent acting as an ambassador, giving a voice of acknowledgement, that the accommodation is suitable for the consumer's needs. Every business in every industry wants and needs these ambassadorial spokespeople spreading the good word about them.
Embrace the tourism industry distribution network as the industry's consumers do.
Further discussions we could have:
Different distribution networks can have different rates and different rates within a network?
Work with your distribution networks and they will work for you?
David Hancock is the visitor development manager for Hutt City, Wellington, New Zealand and would be delighted to receive comments on this or any other topic.
http://www.huttvalleynz.com/
http://www.facebook.com/HuttCity.Wellington
