Segmentation Helps Travel Company Double Response Rates After 9/11Tourism hit hard times after 9/11, but instead of waiting for the mood to change, Group Voyagers Inc. made its direct marketing campaigns more effective through relevant targeting.
The company stopped its shotgun strategy and doubled its response rate.
Group Voyagers, Littleton, CO, is a privately held tour operator that markets and sells the Globus family of brands offering vacations with leading escorted travel companies Globus and Cosmos as well as Monograms, which specializes in independent travel. Other Globus brands include Brennan Vacations and Avalon Waterways.
"Although September 11 is an awful part of our history, it made most businesses really retrench and tighten up a little bit," said Kelley Maxwell, manager of consumer marketing for the Globus, Cosmos, Monograms and Avalon brands.
To develop this more relevant direct strategy, the company turned to Cohorts' household-level consumer segmentation for its Globus and Cosmos companies -- the two brands in existence at the time -- in late fall 2001.
Cohorts, Denver, divides virtually all U.S. households into cohesive groups that share distinct demographic, lifestyle and consumer behavior characteristics. Each group is given a person's first name to reflect its personality and to help marketers distinguish it from the others: for example, Jonathan (elite, single men) and Burt & Marilyn (comfortable, mature couples).
Cohorts analyzed Globus' and Cosmos' customer and prospect databases, which each included hundreds of thousands of names. The analyses included each brand's internal segmentation scheme; past client itineraries; prospect name sources -- from direct mail to print direct response; partner lists; and loyalty program members.
Cohorts then matched the databases to its household-level segmentation database and found five specific customer segments that would be best to target. As a result, "we learned that we had a more specific target than we actually thought," Maxwell said. "It was a great 'Aha' moment for us."
Once the databases were encoded with the Cohorts segment designations, Globus and Cosmos created -- with their Denver-based ad agency Karsh + Hagan -- promotional campaigns for select segments aimed at current customers and prospects.
Besides finding the most appropriate audience in general for Globus and Cosmos, the brands also regularly tailor images and copy to appeal to key Cohorts segments.
"There are a lot of opportunities for us to use the Cohorts system," Maxwell said. "For example, if we are trying to promote an exotic product, we can use a Cohorts segment that has a higher income and is [less averse] to risks."
Karsh + Hagan also uses Cohorts' market research data on consumer print media selection for Globus and Cosmos. This lets the agency tailor advertising messages for readers of selected magazines.
Cohorts also helped Globus and Cosmos gain the information to better understand customers of existing product lines as well as those who don't readily buy. As a result, the companies created a new tour brand, Monograms, offering a product more focused on independent travelers. As part of creating the new product, Cohorts helped Globus and Cosmos select destinations and optional activities that would resonate with independent travelers.
Now, the three brands send 20 direct mail campaigns a year. Since using Cohorts, "we have doubled our response rate," Maxwell said. "Prior to using Cohorts, we had a very underdeveloped direct mail strategy. It was very basic, a shotgun strategy. We were just throwing a lot of money at a big group of prospects."
Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters