Changing Trends and Methodologies in Modern Prospect Generation
Author: Chris Hornbeck, CEO, Resort Insiders
Published: RCI Ventures Latin America
2013-01-31
The myriad benefits of permission-based, client-friendly marketing methods are changing the
way many vacation ownership companies are approaching their lead generation activities
As changing technological and cultural trends demand that the vacation ownership industry
continue to diversify its lead generation activities, the space where the most attractive growth
potential exists is in permission-based marketing. Marketing methods in the vacation ownership
industry have traditionally relied heavily on initiating contact with the customer, either by phone,
mail, or in person, and are by and large becoming less effective and legally compliant over time.
Direct marketers in many industries are shifting their resources more and more towards
permission-based/consent-based marketing to meet these challenges and diversify their client
generation portfolios to help drive new business and manage marketing risk.
The basic concept of consent-based marketing is to gain a potential customer's attention
through the provision of education, content, and implied value such that a voluntary
communication is created between the marketer and the customer. That communication can be
either "inbound" (initiated by the customer), "outbound" (initiated at the request of the customer),
or even face-to-face, but the keyword is "voluntary".
When a customer contacts a company because of interest in their value proposition, or leaves
his number to be called about an offer, they have effectively become a "warm" lead. The
beneficial marketing atmosphere created by this type of voluntary communication leads to lower
labor costs, higher conversion rates, and overall higher sales efficiencies.
Legal compliance issues, advertising churn, and the rising costs of "cold" marketing methods
are driving the accelerated adoption of permission-based marketing in the vacation ownership
industry. Far less compliance restrictions (and thereby risk) exist with the use of these
techniques and the use of fresher, more customer-friendly communication methods make for
happier, easier-to-sell customers, which generate far less complaints than traditional marketing
methods, like "cold call" telemarketing and OPC.
Permission-based marketing methodology is based on looking for responders, people who see
and are interested in a value proposition and give express permission to speak with them about
it. This permission can be granted in many ways; through an inbound call, a written lead that
can be followed up on, or perhaps a physical visit.
To find these responders, value propositions are placed in different advertising channels that
may feature things like discounted resort stay packages or lead generation offers based on a
popular premium or service that may be related to a specific resort location. Value propositions
can even be in the form of informational or educational content.
The importance of an honest, high-quality value proposition cannot be understated. In this
age of highly-educated consumers and comparison shopping, the value proposition must be
competitive, well-considered, and beneficial to the end user to maximize conversion. The key to
an effective value proposition is to meet the end user's needs, wants, and intentions in such a
way as to motivate the customer to seek out and/or expect communication with the marketer.
Advertising placement for permission-based lead generation can be targeted either by
unambiguous explicit variables, like demographic characteristics, used to target those who
fit the profile of a potential buyer, or intent, an implicit variable, which targets those who have
expressed some propensity towards conversion through their actions.
Permission-based marketing can be accomplished through traditional media and face-to-face
interaction as well as the internet, but the exponential growth and diversity of online marketing
platforms and the relative ease with which low-cost, incremental testing can be accomplished in
this space have pushed marketing budgets further and further in the direction of e-commerce.
Advertising methods such as search engine advertising and affiliate marketing are fantastic
for targeting implicit user intent, while outlets such as social media or traditional magazine
advertising provide an increasingly enhanced ability to target by demographic characteristics.
An example of targeting by intent would be to advertise on a location-specific travel site.
There is a high degree of likelihood that a person visiting a website offering travel to Mexico is
interested in traveling to Mexico. By having visited this site, the user has expressed intent. If
we can produce and present to the customer a value proposition or information that matches his
intentions, the opportunity to open a voluntary line of communication with that customer can be
created.
With demographic targeting, likely customers are targeted based on identifiable characteristics.
A value proposition is still used to convert them to a permission-based lead, but the method by
which the customer is sought out is different, relying on characteristics such as age, income,
or physical location, rather than customer intent. The value proposition and messaging usually
varies to best match each customer segment.
An example of demographic lead targeting would be to use social media advertising tools to
advertise to a customer segment that is known to be high-converting. For instance, if married
women aged 35-44 from Arizona happen to be a company's highest converting customers, ads
can be placed on a social media outlet, like Facebook, that can laser-target advertising to that
particular demographic. Traditional advertising methods, such as print, radio, and television,
also generally fall under this category of targeting.
By nature, demographically-targeted leads are generally harder to convert in the travel industry
than intent-based, as the latter has usually already made the decision to travel. This decision/
lack of objection makes a big difference when it comes to eventual conversion rates and costs,
though both methods are important to a healthy marketing mix.
"Customer-initiated" marketing methodology is also having noticeable impact in the face-
to-face marketing world. Situations where contact is generally initiated with a previously
uninterested customer by an agent of the company, either in an on-site lead generation or an
OPC atmosphere, are producing declining sales efficiencies in many cases and are running into
legal trouble in many locations.
These traditional methods of in-person contact are giving way to information kiosks, interactive
electronic displays, and even unique methods, like video games, that attract customers on
their own volition to be presented with the desired marketing message. This psychological
difference, where the customer feels like they have chosen to initiate the interaction on their
own, rather than being coerced to do so, makes a major difference in conversion and eventual
sales efficiencies.
The obvious benefit of shifting marketing and lead generation spend towards permission-
based marketing is that marketing risk, both legal and financial, is diminished through increased
compliance, diversification of lead portfolios, and increased lead conversion, but the eventual
effect on important bottom-line metrics such as retention, sales conversion, and portfolio
performance is also of great significance. A customer who is educated, aware, and involved
throughout the entire marketing process is the most likely to keep the product and continue
payment after they purchase.
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