Keywords

1 Introduction

Every day companies lose customers unconsciously [28]. Therefore, customer relationship management (CRM) serves to “… encompass the development and consolidation of long-term profitable customer relationships through coordinated and customer-specific marketing, sales and service concepts with the help of modern information and communication technologies.” [35] Due to an even stronger trend for individualization in travel, companies need to know about travelers’ needs and wishes. This topic is becoming increasingly important also in view of the current COVID-19 crisis. Customers’ wishes and requirements thus become the focus of every company and all its business areas [27]. The fundamental basis for maintaining customer relationships is customer data, which is condensed into customer profiles. These must be aggregated, classified and stored in a customer data platform [60]. The profiles then serve for databased CRM to derive tailored offers and communication [37] based on the individual information such as demographic data or psychographic data. Building a database should be seen as a profitable investment, as customer information significantly increases the efficiency of marketing activities [17, 43, 57] and allows companies to generate a higher return on investment [33]. Early approaches in CRM application in community-based tourism analyzed the degree of CRM implementation in destinations [20]. Other authors stressed the importance of cooperation between various service providers and the DMO in community-based tourism for an integrated CRM [21, 22]. DMOs were defined as “enablers of integrated electronic CRM” and an adoption framework for this cooperation was developed [21]. Also, the visitor relationship marketing orientation among DMOs was researched and a model to operationalize DMO visitor relationship orientation developed [42, 46]. Results showed that DMOs were often “responsive and reactive rather than proactive” [42]. Another author analyzed data-driven CRM for airline and travel agency industries [10] and coffee shops [11] in Taiwan. While bigger companies are already quite successful in strategically collecting customer data, the tourism industry lacks behind in this topic. A study amongst Austrian and Swiss DMOs showed that there is a huge gap between data availability and the strategic use of this data due to legal, know-how and financial constraints [4]. Data is very often still not made available online, not collected systematically, if so stored in silos by other service providers and links between databases are often missing. They can neither process data of guests staying in the regions nor of their activities. As tourism destinations are complex systems [3], they are not in command of data sovereignty [25]. While this field of research is not new for the tourism and hospitality industry [6, 38], the majority of tourism businesses still rely completely on the success of the development of the touristic offer. Their lack of understanding of customer orientation and their dismissive attitude towards modern approaches to creating competitive advantages are to blame [56]. Even the DMOs have resisted the demands of digitalization for too long [36]. Considering the increasing global competition, the trend shift towards short breaks and the decreasing number of regular guests, intelligent approaches such as CRM are immediately required in destination marketing in order to maintain the competitiveness of destinations [2, 36]. Therefore, it is up to DMOs as strategic competitive entities to drive CRM for the benefit of the destination and all its touristic stakeholders [53]. Following the literature on CRM in the tourism and hospitality industry [49], this paper addresses various research gaps: “The majority of published research articles are in the area of hospitality, with a specific focus on hotels and restaurants. (…) Future research in the tourism area, especially at the destination level is also required.” [49] Indeed, in literature CRM has gained a foothold in tourism research [49], but unlike the numerous research contributions in the hotel sector [17, 57], CRM in the context of DMOs is discussed in fewer recent publications [2, 36, 46]. “In examining the three components of CRM, the technology aspect has received the most attention, whereas the roles of people and process have been widely neglected” [49]. The general marketing research fields like database marketing, permission marketing, marketing automation, online marketing or data privacy issue aspects of building a database for CRM, focus either on technological aspects [28] or on behavioral aspects [30]. A holistic view on both crucial aspects has not yet been issued. This is the reason why this paper combines both technological and behavioral aspects and stresses the social interaction of both supply and demand side. “The topic of e-CRM is widely researched in the marketing, management and IT fields. However, there is a need for H&T scholars to focus on e-CRM” [49]. Digitalization has become one of the main fields in tourism as an information-intensive, globally-oriented, but locally-delivering industry. Technological advancement is transforming tourism value chains. Whereas technological innovations are doubtless possible, the problem remains in implementing digital services and marketing within the mainly small-structured tourism industry [15]. There is thus still a long way to go for the digital transformation of tourism businesses. Therefore, when establishing a destination-wide CRM, also the interests of service providers as well as their level of digital literacy need to be taken into consideration [50]. In order to also take into account both the DMO’s role and the necessary cooperation with local service providers from the supply as well as the customer side of this relationship, this paper focuses on how to establish a balanced relationship between the DMO and the potential or existing guests and tries to answer the following research question: How can social exchange promote the generation of dialogue-ready customer contacts for data-based CRM in DMOs to create a win-win situation for both sides? Which key factors are decisive for the success of this social exchange relationship? The aim of this paper is to show how a data-based CRM can be developed by DMOs from a holistic perspective as well as to consider the challenges of the digital transformation for both DMOs and service providers.

2 Building a Customer Database for CRM

This paper addresses technological aspects for both DMOs and small-scale tourism providers as well as the lack of the social dimension of the relationship between guests and the DMO.

2.1 Technological Aspects from the Supply Perspective

The instruments for building up a customer database for CRM are primarily located in acquisition management by addressing the target market, identifying interested parties and converting them into customers [16, 51]. It includes the stimulation of interest in the target market, the identification of prospects as well as their processing until the conclusion of a purchase. Through the sales funnel, prospects should be transformed into customers [51]. At the end of the funnel, it is important to bind these customers to the company through the subsequent customer loyalty management [43]. Along the sales funnel, different information about the customer is generated at various touchpoints of the customer journey. This data flows into the company’s database, is classified and clustered by predefined segmentation attributes and is condensed into a unique customer profile [17]. The basic motive of creating a customer profile is to present the customer in a holistic picture, because the generated customer profiles are used to initiate, maintain or rebuild customer relationships [4]. Hence, the more data is generated from a customer the better the picture of a customer gets. Which customer information a customer profile should contain depends on the respective objective of a company [32]. Name and email address were identified as the most important and lifestyles as the second most important variables for customer acquisition [58]. Today, the checkbox for obtaining marketing permission also counts as a target variable for lead generation, because personal data may only be stored, processed and analyzed with the explicit consent of the data subject [47]. Therefore, every European company needs to consider the General Data Protection Regulation (GDPR) to initiate and maintain business relationships [23]. While these processes work well for other industries, DMOs mainly are not in direct contact with the customer, as guests usually directly interact with accommodation or other service providers. On the other hand, the small-scale tourism providers often have neither the personal and financial resources, nor the know-how to establish such customer databases. This makes the technological requirements for a databased CRM of a DMO even more challenging.

2.2 Behavioral Aspects from the Demand Perspective

Major data leakages and misuse in the past have had a negative influence on the trust of customers in handling personal information [9, 14]. Therefore, from the perspective of customers, also behavioral aspects have to be taken into consideration. Privacy concerns imply a perceived sensitivity to the preservation of one’s own privacy and manifest themselves in concerns about storing, using, sharing and publishing personal data [1]. In addition, direct marketing is often leading to customer annoyance [4]. The cause-privacy concern impact model (APCO) explains the emergence of privacy concerns and their influence on customer behavior [55]. Beside experience, awareness, personality, demographics and culture as the drivers of privacy concerns, plenty of authors studied the privacy paradox. It describes the contradictory contrast of personal attitudes to displayed behavior [29], which influences the behavioral intention and is the main cause of contradictory behavior patterns [55]. Thus, customer behavior only partially reflects the conventional assumptions of behavioral psychology, according to which human behavior is based on rational considerations. In fact, customer behavior is based on the outcome of a privacy calculus or a personal cost-benefit comparison [34, 39]. To impact customers’ privacy calculus and hence consumer behavior positively, the use of incentives has widely been discussed in literature [30]. Discounts and free products or services are considered as monetary incentives due to their measurable value [41]. Non-monetary incentives include hedonic incentives, which are described as a psychological benefit component [30] and utilitarian incentives, which are characterized by their functional utility character [44]. All those incentives can be combined in crystallization points [7] such as bonus schemes [26], applications [13], customer clubs [12] or loyalty cards [45]. It is also important to think about where to place these incentives within the customer journey. The cost variable of the privacy calculus includes all risks and negative consequences that arise from data transmission [59]. If the expected benefits exceed the costs, customers are willing to allow data transfer [34]. The cost and benefit calculation in the privacy calculus is based on the principles of social exchange theory [34, 39] as one of the oldest, but still most popular theories to explain social behavior [48]. Parties are mutually interdependent and impose costs and rewards on each other through their behavior [18, 24]. Thus, the least costly, most rewarding option is chosen [54]. While this topic has been studied in CRM in general, studies on guests’ behavior as an application to the tourism industry are still scarce [49].

3 Method

Given the need for insights into more complex structures of economic and social relationships within the field of data-driven CRM in DMOs, a qualitative research method was applied [8]. In this course, the topic was examined empirically from the alpine community-based DMO’s point of view conducting 13 semi-structured guided expert interviews [19]. An interview guideline was developed based on the literature review. The main focus areas were: 1. how can DMOs successfully establish an exchange relationship for databased CRM; 2. what type of customer data must be generated in the initial contact and 3. what type of benefits must be offered in exchange; 4. how would the ideal cost benefit ratio for DMOs and guests look like 5. in which phase of the customer journey must the data generation be located. Experts were chosen, as they are highly qualified to answer the research question. They are seen as “crystallization points” of practical insider knowledge and therefore can be interviewed instead of a large number of subjects [5]. All interviews were held online during spring 2020 and lasted from 40 to 90 min. The following selection criteria of interviewees were established [19]: professional qualification, knowledge of the functions of DMOs and touristic behavior, and a close relation with alpine community-based destinations in the German-speaking area. The sample comprises 13 participants of which four are CEOs in consulting companies for strategic and digital matters of DMOs, two of them professors in tourism marketing management on a collage of higher education, two chief digital officers in DMOs, four marketing employees responsible for CRM in DMOs, one chief marketing officer in a cable car company and leader of a CRM project launched together with a DMO. Not having focused on gender nor on nationalities, the sample resulted in seven male and six female participants, with two of them living in Switzerland, four in Germany and 7 in Austria. All participants fulfilled the qualification criteria. For data analysis, a summarizing content analysis was chosen [40], as it is ideally suited for evaluating expert knowledge in a narrow field of research [52]. The interviews were transcribed [16]. MAXQDA, a common software solution for qualitative data analysis [31], was used to develop a codebook. This was done by paraphrasing relevant text passages from the interview transcripts, generalizing their messages and reducing them to their point of meaning [40]. This method allows to extract expert knowledge from the generated qualitative data and to derive inductive categories in which this coded information is compound. The resulting categories of this research include: important frame conditions of DMOs and key success factors for the establishment of exchange relationships; required customer data to create a customer profile and effective customer benefits in exchange. Based on these categories the experts research results have been discussed. As there is no significant difference between the DMO’s managers or employees compared to other experts’ perspectives, the results of this research must not be discussed from the different expert group’s points of view.

4 Results

The research results show that the establishment of an exchange relationship with tourists must be considered in the context of the DMOs’ frame conditions and key success factors as well as consider the design of the exchange relationship.

4.1 Establishment of the Exchange Relationship

DMOs suffer from a lack of customer proximity as guests usually directly interact with service providers in the destination. Thus, the DMO often has few to no touchpoints with guests who have already been to the destination. Even though all experts view DMOs as an important source of inspiration for guests, they are by nature in an unfavorable position for data generation. Other key players in the destination however, such as accommodations, gastronomy, shops, touristic service providers are in an ideal position for data generation as they are in a legal economic relationship with guests. Therefore, experts refer to establishing networks with services providers within the destination. By means of stakeholder management DMOs have to convince all key players and involve them in the process of data generation for a CRM system. With them bridging the contact between the DMO and tourists, valuable data pools within the destination can be channeled. In addition, a number of key success factors for the establishment of exchange relationships could be identified. These are classified as strategic, conceptional and methodological factors. The strategic key success factors are based on a strategic approach of why data and what data is generated, and how it is going to be used by the DMOs. Otherwise, data is generated randomly and may lack specific insights or it is too broad to be structured usefully. Also, know-how in the field of databased CRM must be implemented in the organizational structures of the DMO to create marketing efficiency to the destination’s benefit. The conceptional success factors include facilitators of the exchange relationship. For DMOs it is essential to know that the less data is requested from tourists in exchange for a benefit, the more likely is their willingness for data disclosure. Also, the relevance of the offered benefits must be maximized and exactly meet customers’ needs at the specific touchpoint in the customer journey. Even though the inspiration and consideration phases (pre-booking phase) are already targeted by many DMOs, all touchpoints along the whole customer journey should be addressed. All experts see a high and so far not claimed potential for exchange relationships during the stay in the destination. In order to exploit potentials, it is suggested that DMOs become innovative in terms of creating intelligent customer benefit offers. Experts underline the necessity of making best use of the DMOs’ frame conditions, rather than emulating common sales funnel strategies of usual single player businesses. The methodological success factors include that DMOs need to guarantee high customer experience at all touchpoints and interact with customers in a very simple context as complexity leads to high drop-off rates even before the actual exchange takes place. In general, experts urge DMOs to act in a helpful and trustful way towards tourists in order to minimize data privacy concerns and to create more confidence by tourists.

4.2 Design of the Exchange Relationship

In order to motivate the guests’ desire for dialogue, as little data as possible should be requested in an initial active contact. The e-mail address as identity carrier and point of contact, the name, and the marketing permission for the legitimacy of the data use as well as the defined interests that give meaning to the identification data represent the ideal starting point for the creation of a basic customer profile. Experts stress that extending customer data is gained through further touchpoints. Many of these customer data can be tracked passively, without affecting the customer’s data privacy concerns and therefore without causing social costs. Findings suggest that for creating a customer profile relevant for CRM, DMOs must at least add the customer’s interests. Less but also relevant are preferences or origin. In exchange for customer data, rewards become essential. Results suggest that rewards should include a versatile combination of incentives. There is a clear preference for hedonic and utilitarian incentives to stimulate the willingness to engage in dialogue. Information before or during the journey emerges as one of the most significant incentives as it creates high benefits for customers at low costs for DMOs. Information of this type is classified as hedonic incentive as it provides profound travel experiences. Moreover, tourist communities with options for digital exchange on the DMO website or possibilities to express recommendations and reviews during the post stay phase are considered effective. Hedonic incentives cause low costs for DMOs. Utilitarian incentives provide a more convenient travel experience. Experts claim that assisting technologies generate extraordinary customer benefits in all phases of the customer journey. Also booking systems for tickets, experiences or other services of touristic interest are highly beneficial. Assisting tools or systems cause moderate costs, as licenses or development costs are predictable and limited. While hedonic and utilitarian incentives are considered to generate high customer benefits, five of thirteen participating experts dissuade DMOs from offering monetary incentives as the quality of generated leads is expected to be very low in terms of higher opt-out rates as customers are not really interested in a lasting exchange relationship but rather seek for one-time saving opportunities. However, receiving gifts such as free services, goodies or consumption goods during the journey, appears to have positive effects. For the exchange relationship to be successful, it is important that the cost-benefit-ratio is balanced. This means that guests should not have to disclose an unnecessary amount of personal data and DMOs should not suffer from disproportionate project costs. Therefore, incentives causing low or flat-rate cost for DMOs such as information and assisting technologies are the best option to keep the exchange relationship balanced. Gifts on the other hand, may in high quantities get too cost-intensive.

5 Conclusion

The research results show that DMOs are in an unfavorable position for establishing an exchange relationship for databased CRM on their own, due to lacking customer proximity. Even though the DMOs’ booking platforms would in fact be an important touchpoint for establishing exchange relationships with tourists, OTAs hold most of the market share while DMOs count few bookings on their own platforms. Nonetheless, DMOs are still in the ideal position to bridge the gap using their networking capabilities and power in the destination. If they successfully collaborate with key players in the destination, they could establish a data-based CRM. DMOs may convince accommodation providers to communicate the DMOs benefits to their guests by linking directly to the DMOs landing pages or registration forms. Thus, the DMO potentially creates touchpoints with all guests in the destination. Solutions of this kind would be game changing, as mediation is an effective and legal way to get in touch with all tourists coming to the destination, no matter whether they booked their holiday on the site of third parties such as OTAs. It is also suggested that DMOs clearly define their goals of a databased CRM system before establishing an exchange relationship. Depending on the goals, relevant touchpoints, customer data, customer benefits and lead quality may differ. For the goal of tailored marketing communication and offers based on customers’ needs, a basic customer profile must at least contain the customer’s email address, his or her name, the marketing permission and very important – his or her interests. It may be however suggested that customer’s interests are gained passively during further touchpoints, because the more data is requested at an initial touchpoint, the higher the dropout rate will be. In exchange for data disclosure, DMOs must offer extraordinary customer benefits at acceptable costs for the DMO in order to keep the benefit-cost-ratio balanced for both parties. As the results show that monetary incentives may lead to high costs or even negative effects, DMOs must channel the power of hedonic and utilitarian incentives. Experts consider information, communities together with systems for holiday administration and planning most effective. Yet it appears that efficiency may be even increased by consolidating all benefits into one crystallization point. This could be a destination app or travel guide, which assists customers along all phases of the journey. It may provide information on activities and individual programs based on the customer’s interests, scheduling and booking before the journey. During the journey it offers orientation, while after the journey it allows customers to review their activities. Such a travel guide which includes accumulated hedonic and utilitarian benefits and maybe even - if still cost effective - free services, stimulate the willingness for exchange as they provide high value for tourists and low costs for DMOs.

6 Limitations and Implications

This research involves some critical limitations as technical aspects are only addressed in rudimentary form and thus remain largely unsolved. Furthermore, staff of DMOs formed the biggest group within the sample which might cause a bias in the results. Another bias might arise from the time of interviews falling within the COVID-19 crisis. Future studies should take into account the demand side to prove the actual effect of the incentives on the willingness to engage in dialogue as well as on the actual perceived data privacy concerns from the demand side. Another essential aspect would be a holistic analysis of the exchange relationship over a longer period. In addition, surveys should also be carried out outside of the German-speaking area. Based on this research, Ötztal Tourism in Austria used these findings to establish a databased CRM system. As a solution for the problem of data sovereignty through various destination stakeholders, the DMO exploited its stakeholder proximity and built a destination-wide partner network of approx. 1,000 accommodation and 30 service providers, who mediate the contact between the DMO and the tourists. This practical example shows how a DMO can overcome the lack of customer proximity and achieve data sovereignty by creating a network platform amongst service providers, which offers valuable benefits for both existing and potential guests. By applying a combination of mainly hedonistic and utilitarian benefits and creating a customer profile gradually, a balanced social exchange relationship can be developed. This research contributes to the knowledge of alpine community-based DMOs as to how a databased CRM can be established to fully contribute to the destination’s marketing efficiency. It shows that not only technical but also behavioral aspects have to be considered and how the principles of social exchange effectively facilitate a win-win relationship for all involved parties.