Revising your product
Step 1: Review your markets
Step 2: Discounting or value-adding
Step 3: Proactive marketing

During the first few weeks following an emergency, you will need to make some quick marketing decisions for your business. This section will help you to identify the best strategies to get your business back on track.

After looking at the cash flow implications of the crisis on your business (see Money section), there are likely to be some marketing-related decisions to make to increase your sales.

• What product do I have to offer? Do I need to make any changes to it as a result of the emergency situation?
• How do I get customers back to my business?
• Which ones should I focus on?
• Do I need to discount my prices?
• What advertising opportunities should I participate in?

Revising your product

NEXT STEPS

One of the things you may discover soon after an emergency incident occurs is that you can’t offer the same experience to visitors as you did before.

If you’re in regional Victoria, the natural environment could be damaged by fire, flood or storm which may lessen the appeal of visiting the area. You may need to identify new sites of interest that are undamaged by the emergency and safe for visitors.

You may not be able to offer your usual range of products or services due to damaged property or trouble with suppliers.

The emergency may also have created certain negative perceptions about the region that you need to address through changes to your product.

Or you may need to restructure your product in some way to appeal to a new market to substitute for those who are not visiting.

Most tourism operators have to alter their product offerings in some way to compensate for the impact of an emergency.

The trick is to be quick to notice what changes would help your business, to put these in place, and then communicate them to your markets.

The better you know your customers, the more adept you can be at devising product changes that meet your customers’ needs and aspirations (see Steps for Effective Marketing).

TIP
There is opportunity for every business to improve its products and services at any time to create a better experience. The best and cheapest way to find out what your customers want is to ask them. This will give you ideas about what little extras would please them to encourage them to visit more often. As the oft-quoted research says, it costs seven times more to attract a new customer than to keep an existing one. "

Parkgate Resort, Halls Gap
“Three or four months after the fires, many operators got quite a shock to realise that the reason for tourists to visit their business had been severely hampered. People had to acknowledge that tourists were not coming to the area to experience their particular business but to see the Park. When that was damaged, so was our trade. To help alleviate this, we worked hard to identify new spots in the Park for people to visit as the most well-known sites were closed. We introduced these sites to potential visitors when they made inquiries or arrived at the Resort, and it seemed to work well. During this research, I went to places in the Park that I’d never been to before. It is important for tourism operators to be open to product development - change - after a big event like this. It is part of winning back customers and maintaining levels of return visitation.” Samantha Magill operated Big 4 Parkgate Resort, surrounded by the Grampians National Park, when bushfires hit the area in late 2005 and early 2006. "

Once you’ve identified the types of product changes you’d like to put in place, work out how you’ll tell your target markets. This may include any or all of the following communication tools:

• Update your website, and other websites that feature your business. This may include the introduction of new packages, added extras, etc.
• Send a newsletter or email to your previous guests to inform them about the new product.
• Let potential visitors know about any changes to your product when they contact you by telephone. Prepare briefing notes for reception staff to ensure the message communicated to visitors is clear and consistent.
• It is also advisable to contact existing bookings to let them know about any changes to your product if the experience they thought they were purchasing has been altered.
• If your product changes create a newsworthy story, contact travel media and other relevant media outlets to explain the new products.

Steps for effective marketing

NEXT STEPS

Step 1: Review your markets

Knowing who your markets are before an emergency hits gives you a head start when recovering from an emergency.

Do you know….

1. Where your visitors are from - by country, state? Yes / No
2. The email and postal addresses of previous visitors? Yes / No
3. How your customers found out about you? Yes / No
4. What your visitors like to do in the area? Yes / No

If you answered no to any of these, if an emergency occurs you could miss out on some quick and cheap marketing opportunities, such as contacting previous guests with special offers.

It is easy to keep records of contact information for previous visitors. By maintaining a database of this information, you can:

• Build a profile of your customers and their visitation patterns to help you make decisions about marketing and product development that are tailored to the needs of your markets.
• Further build your relationships with previous customers by contacting them with information about special offers, new products, etc.
• Have access to the contact details of people who have already shown interest in your business, and who are likely to be more receptive to your promotions. Email addresses are especially useful after an emergency to provide you with an instant, cost-effective marketing opportunity - the means to get a message out quickly to people who already know about your business and who could be encouraged to return again.

Which markets recover faster than others?

The experiences of different businesses recovering from a crisis show that some markets recover faster than others. How markets respond will depend on the type of crisis. For example, German visitors who generally value the environment will take longer to return to a region where natural habitat has been damaged in some way, e.g. by a chemical or oil spill. US visitors are sensitive to issues of personal safety and can stay away from a destination for a long time if there has been a terrorist attack.

If some of your usual markets are staying away:

• You may be able to attract new markets that can generate business, e.g. if short-break weekenders are staying away from a bushfire-affected area, events based on food and wine or music can be used to generate interest in visiting the area or business again.
• Encourage your more loyal, repeat visitors to come back.
• Focus on market segments that are less deterred by the specific type of emergency.
• Sometimes those looking for a bargain can provide a short-term market to stimulate cash flow if you decide to discount your prices.

After the terrorist bombings in London in 2005, holiday visitors stayed away en masse. The first to return were business tourists. Some tourism businesses refocused their marketing away from international visitors to target UK people seeking a weekend in the nation’s capital city.

5 Star Adventure Tours, Alpine National Park
Operators of 5 Star Adventure Tours, Tracy Walker and Daniel Boissevain, are business survivors of the 2006 bushfires that broke out in the Alpine National Park.

One of their successful recovery activities was to draw on the relationships they had established with previous guests. Since starting the business three years prior, they had retained information about all previous guests and, with their permission, had kept in touch with them to promote new tours and products.

When fires burned through sections of the Park and tours had to be cancelled, cash flow to the business ground to a complete halt. After tours were able to recommence and they had to get word out quickly that they were back in business, Daniel sent out a special offer to previous guests to book a tour and dinner by paying a 50 per cent upfront deposit, with the remainder payable when they took the tour in the next 18 months.

As many of these visitors had formed special bonds with Daniel and Tracy while on tour, they were only too willing to help. “Our previous guests were a lifesaver for the business,” said Daniel. “Around this time, turnover was down to zero and they helped to keep money flowing in to pay the bills.”

To do
Work out which markets you should target in the short-term aftermath of the emergency to get business going again by completing the following table for your business. Include this table in your new marketing action plan.

Step 2: Discounting or value-adding

Discounting
After an emergency incident, discounting can be a useful strategy to stimulate cash flow if you have had to close your business for a period or people are staying away from the area.

Decisions you will need to make when discounting are:

• Should you discount your product or service? (See highlight box)

If yes:

• For how long will you offer the discount? A week, month or season?
• What will the value of the discount be? Can you cut costs and make some money while offering the discount, or will the discount create cash flow but mean that you operate at a loss?
• How will the discount be offered? For example, will it be a price reduction or a buy one, get one free?

Research suggests that if you discount it should only ever be for limited periods, otherwise customers will come to expect the discounted price as the norm. Also, if you discount too heavily, it may damage people’s perception of your product, giving the impression that it is of cheap quality. The more luxurious the product or service, the greater the risk of undermining your brand if you discount your prices.

Value-adding
An alternative to discounting, but with some similar issues, is value-adding. This involves including additional products or services (for example a picnic hamper or cheese platter) for the same or slightly higher price. It can be a way of making your product offer more attractive but still attaining the full price for your product or service. This may make the business less vulnerable to unsustainable cost-cutting.

Whether value-adding or discounting, a better way of generating turnover after an emergency can depend on the type of product you offer and the price sensitivity of your markets. If you run an upmarket restaurant, you would be more likely to protect the restaurant’s brand if you provided extras for free, rather than discounted the meals which could create an impression of the restaurant being cheap or of lesser quality.

However, if you run a caravan park that has a large number of on-site vans, cabins and tent sites, lowering your rates is much less likely to be associated with a lesser quality experience. Your market may already be price sensitive and attracted to your budget accommodation so you are not contradicting the reputation of your business by providing a discount.

To do
Work out any changes to your prices or value-adds to your product or service that you want to put in place.

Step 3: Proactive marketing

Addressing the obstacles
People can stay away from your business after an emergency for a range of different reasons. The key is to understand what these reasons are and to address them through your promotions.