Marketing week: How can Virgin Holidays compete in a tough market?
Andrew Shelton (AS): We are still the biggest scheduled long-haul travel company in the UK. We don’t do short haul, that is what [competitors such as First Choice and Thomson] do. We are very clear about differentiating our product from our competitors. It is a tough market and that is where we need to make sure that all the extras we provide are things people want and value.
MW: The travel industry’s margins are slim. How can you improve your own?
AS: It is about making sure that people are prepared to pay for what you offer and that you do charge for the extras. We have had a difficult 18 months but the market is growing after going into decline. People do want to go away – our holidays, the two-week holidays, tend to be the mainstays; most of our business isn’t the small getaways. They are the ones that people won’t trade off.
MW: What is the focus for the business?
AS: Coming out of what has been a depressed market and looking at where we can grow. Our focus is Asia, our touring business and cruises. I am also increasing the number of our shops – we have 103 at present. [The first was within a House of Fraser in 2007.] We are doing more in Scotland too. It is growing at about 25 per cent and we have Little Red [Virgin’s regional airline flying from Aberdeen, Edinburgh and Manchester]. The market is picking up again and this is the right time to lay out our stall to customers with a new advertising campaign.
MW: Why focus on Asia and cruises?
AS: Mainly because people want different things and are being more adventurous in their travel plans. If I want to retain customers, I need to be able to offer a range of products. I believe that in the future more long-haul travel will be to Asia, so it is important that we have an offering to meet that demand. Offering more cruises is based on the fact that there are so many cruise ships being built. It is phenomenal – the sector is enjoying a renaissance.
This is being led by a huge ‘new to cruise’ market in the UK. There is still a high proportion of people who believe cruises are stuffy, ‘blue rinse’ and not for them. Our job is to democratise it and show that isn’t the case and there are different cruise lines depending on your needs.
People are very well travelled these days – they may have been to Hong Kong for five nights and are now ready to go to the Great Wall of China or see Chiang Mai.
We are also trying to get people to do a ‘cruise and stay’; that is, to go on a cruise and then get off the ship and visit the Disney parks in Orlando, or go to the Caribbean and chill and then go and see the islands. The concept is becoming popular – it’s a way of having a two-week holiday but breaking it up.
MW: The travel industry hasn’t been great at data management and customer relationship management (CRM). How can it improve?
AS: Travel is not a frequent purchase so the quality of the data we have isn’t going to be as it would be for Tesco or any retailer that has a frequent purchase. CRM and social is starting to blend together and we need to get smarter with data as an industry. From a marketing perspective, it can lead to a more efficient marketing operation.
The investment in social is comparable to what we are doing in CRM and we are linking the teams that manage [both of those]. The people who are on our Facebook page tend to be our most loyal customers and there are some real advocates. For example, a child left her soft toy in one of our airport lounges and told us about it via Facebook. So every day, the lounge staff took pictures of the toy doing something different in the lounge – the child, who was distraught, went on Facebook to see messages such as ‘he’s fine, he’s listening to music or having his breakfast’. It is that kind of engaging conversation we need to be having.
MW: Could you link what someone is doing on Twitter with your CRM systems?
AS: We haven’t got to that level of detail yet, but I think if you were to somehow try and match what is on social and on CRM, it would be interesting to understand. We can see that one conversation is happening right now in real time and the other one isn’t, but it is more measured and we have more analysis on it. So one of our challenges is how we make sense of both. You have to be careful about it though.
MW: How is marketing structured?
AS: PR sits in the marketing department and I have insight reporting to me, advertising, social and CRM. We work in a consultative way with all the teams. We all have the same objective, we are all building customer service and take our customer service questionnaires very seriously: 87 per cent of customers would recommend us to a family or friend and that’s a really important measure. We take that service proposition and bring it to life.
MW: How can you prepare and react to incidents like the bombings at the Boston marathon – do such acts affect whether people want to travel?
AS: With smaller incidents there is an impact but it is short lived. The travel industry has been affected by events such as 9/11 and the Icelandic ash cloud in 2010. It is a complicated business – we are sending people away all over the world and our responsibility is to get them there and back safely and make sure they have a great time.
One of the biggest challenges anyone faced in travel after 9/11 was the ash cloud. We had to rebuild a huge chunk of the tourism business again because people were unsure about flying.
MW: How much is Richard Branson involved in the business?
AS: He comes in and has a view. He is available when we need him and he understands what we are trying to achieve (see Unleash Your Mojo, right).
We also have the Branson Centre of Entrepreneurship in Jamaica, which is a Virgin Holidays initiative started two years ago. The centre helps develop entrepreneurs in the Caribbean so that we can enable businesses to thrive and can create jobs and prosperity. It makes sense for us to do that in a part of the world that is very important to us – and one that relies heavily on tourism.
We take people through a 12-week boot camp to get them investment-ready, so they have a solid business plan from which they can grow. We then introduce them to suppliers to try to create a market for them – for example, one entrepreneur’s coffee brands are in our lounges. We are going to expand the initiative to some smaller islands as well.
Unleash your mojo
Virgin Holidays has launched a new brand campaign, encouraging people to ‘Unleash your mojo’. The work, by M&C Saatchi and LIDA, is based on the idea that the company aims to get people back to their best by going on holiday.
It replaces the previous campaign using the line ‘Rockstar service,’ which ran for three years. While the new strap line doesn’t explicitly talk about customer service, marketing director Andrew Shelton says that different executions will.
Richard Branson started the campaign in April by tweeting that he was thinking of buying an island and was in talks with ‘King Mojo’, who comes to the UK but gets lost. Virgin Holidays tweeted asking people to help find him. It launched the ‘Mojovator’, which goes up when people use the hashtags Mojo or Virgin Holidays, eventually reaching a peak where Twitter users are entered into a competition to win prizes.
The £2.5m campaign includes two TV executions, one focusing on a family holiday and the other targeting the 50-plus age group, featuring a couple visiting China on a cruise.
The ‘Ask for the world,’ line that ran at the same time as Rockstar service is also being phased out.