Internet Marketing in Hospitality and Tourism By Zongqing Zhou, PhD Professor Niagara University Chapter 4 Online Consumer Behavior

Issues in online consumer behavior –The 80:20 rule: 20% are most valuable to you. –Your ideal customers are important to you –Who are they? –What makes them different –What do they really want? –How can you help them even more? –Are they online?

Chapter 4 Online Consumer Behavior Why your 20% of the customers are so valuable to you: –30 times more valuable than your worse customers –Loyal –Spend more money –Bring other customers (word of mouth) –Cost less to maintain –Pay on time –Share information with you and provide feedback

Chapter 4 Online Consumer Behavior What do we need to know about them? –Their mindset, attitudes and inspirations –Their barriers –Their fears and phobias –Where your proposition sits with their needs, lives, jobs online and offline –Their purchase behavior

Chapter 4 Online Consumer Behavior Major differences between online and offline consumers: –Demographic: see handouts –Time and speed of communication –More rights –More power: transparent prices –Demand more information

Chapter 4 Online Consumer Behavior 4 major reasons people go online –Communication/socializing: , chat, Instant Messaging, virtual community, bulletin board, blogging, newsgroup –Making transactions/shopping and buying –Being entertained –Seeking information and being educated

Chapter 4 Online Consumer Behavior Online consumer expectations –Service –Convenience –Speed of delivery –Competitive prices –Choices –In control –Security –safety

Chapter 4 Online Consumer Behavior The online buying process –Problem recognition (needs and wants) –Information search –Evaluation –Decision –Action –Post-sale evaluation (first experience important)

Chapter 4 Online Consumer Behavior Online information processing –Exposure –Attention –Comprehension and perception –Yielding and acceptance –retention

Chapter 4 Online Consumer Behavior Online relationships and loyalty –Retaining existing customers is five times more profitable than acquiring new ones –US corporations lose their customers in five years –Retaining 5% more customers, online companies can boost their profits by 25-95%

Chapter 4 Online Consumer Behavior Techniques to build and maintain relationship with customers –Target and acquire the right type of customers –Delight them. Don’t just satisfy them Target and acquire –Quality customer support –On-time delivery –Compelling product presentations –Convenient and reasonably priced shipping and handing –Clear trustworthy privacy policies Delight them –Extra service and added value –Personalization –Community creation –Integration –incentivization

Chapter 4 Online Consumer Behavior Building communities –Customer-centered communications –Customer-to-customer(C2C) interactions Community building strategies –8 questions to ask What interests, needs or passions do many of your customers have in common? What topics or concerns might your customers like to share with each other? What information is likely to appeal to your customer’s friends or colleagues? What other types of business in your area appeal to buyers of your product and services? How can you create packages or offers based on combining offers form two or more affinity partners? What price, delivery, financing, or incentives ca you afford to offer to friends (or colleagues) which your current customers recommend? What types of incentive or rewards can you afford to provide customers who recommend friends (or colleagues) who make a purchase? How can you best track, purchases resulting form word-of-moth recommendations form friends?

Chapter 4 Online Consumer Behavior Internet User Profiles –Early US Internet users were highly educated –US internet Users today mirror the general population more closely, but not exactly –On a typical day, over 66 million Americans are online –Total estimated number of Americans online are more than 63% of the adult population (18 and older) –75% of children (12-17) use the Internet –Younger consumers are more likely to be online than retirees –Parents are more likely to be online than non-parents –There are more women online than men (51% and 49%)

Chapter 4 Online Consumer Behavior Internet User Profiles (cont.) –More whites than Hispanics and African-Americans (64 to 63 to 51%) –More go online from home than out of home –Out of home connections are more popular abroad than in the US –1/3 of Internet access at home are broadband –Higher-income consumers are far more likely to be online than lower-income consumers and they spend more time online too. –Urban consumers are more likely to be online than those in rural areas.

Chapter 4 Online Consumer Behavior Internet Use Among Travelers In US –2/3 (66%) of travelers use the Internet (online travelers) –74% of frequent travelers (at least 5 trips per year) are online –Business travelers are more likely than pleasure travelers to use the Internet –82% of the 35 million business travelers use the Internet –67% of the million pleasure travelers use the Internet.

Chapter 4 Online Consumer Behavior Internet Use Among Travelers In US (cont.) –96 million adult online travelers in 2003 –The online traveler market has grown 255 percent since 1996 –An estimated 44 million frequent travelers use the Internet in 2003 Internet access Among online travelers –91% use the Internet at home –But 54% also reported using the Internet at work

Chapter 4 Online Consumer Behavior Internet Use for travel planning –2/3 of all online travelers use the Internet for planning –Online travel planning consists of activities such as getting information on travel products, travel services, destination, and/or checking prices and schedules.