NB: This is a guest article by Mark Mattson, a former university professor who writes agile software solutions for the travel industry through TravelTools.
In destination marketing circles, the buzz is about fee-for-marketing services.
It’s the new kid on the block and organizations wonder how they can leverage their technology resources in order to monetize their operations and better serve their memberships.
Organizations are evaluating what fee-for-marketing means in terms of their underlying value propositions.
How will fee-for-marketing work and how will dues-paying members perceive it in the face of powerful interests that are competing for the very same marketing dollars that destination marketers once took for granted?
While no one has a crystal ball to forecast the eventual outcome, this short list of ten realistic considerations may inform destination marketers as they discover paths forward.
1. Local businesses donâ€™t belong to you
They migrate instantly to providers that give them the best values and most focused marketing results. Moreover, your organization doesnâ€™t have a monopoly on web trafficâ€”putting your destination and its local businesses on visitor radar screens.
Google, Travelocity, and newspaper conglomerates drive millions of potential visitors to your destination for their own purposes.
Not only do they have more traffic than you do, they also have the ability to target visitor and business interests using the worldâ€™s most advanced and costly technology platforms.
2. Other media and travel brands
Using Google, online travel agencies, and newspapers, your local businesses can utilize unparalleled technology for free.
Your businesses or members donâ€™t need to pay membership fees to subsidize your expensive new mobile app or a CRM that costs as much as a small home.
Your competitive edge, in terms of having the only destination technology game in town, is gone and will never return. There is no amount of technology expense that can reclaim it.
Fee-for-marketing providers have technology systems that are integrated to make the most of huge economies of scale and network synergies.
You donâ€™t. What happens in Las Vegas stays in Las Vegas. What happens in your town stays in your town.
Destination marketers donâ€™t work together. They see each other as competitors while Google, OTAs and newspapers eat their lunch.
Fee-for-marketing providers have more money than you do.
You canâ€™t chase them or hope to compete by adding technology capacities on an item-by-item, pay-as-you-go basis.
Fee-for-marketing providers employ agile technologies. While your technology is rooted in doing one or several jobs well, their systems scale up and down refocusing at will.
Provider systems are so flexible that they can serve hyper-local markets that you canâ€™t touch because you are burdened with the costs of re-tasking your system for every new niche market.
In effect, your competitors focus like laser beams on any street corner, event or opportunity regardless of size while you are crippled with technology provider fees.
Fee-for-marketing providers donâ€™t have to retool their capacities like you do every time a new technology channel is added to the market.
Their systems donâ€™t go stale every two or three years. Their systems are fluid and foundational.
While you have a system that puts plates on the table on a costly menu-by-menu item basis, fee-for-marketing providers build kitchens where they can cook anything the customer wants in minutes for pennies on your technology dollars.
Your competitive edge is threatened. The things that made you strongâ€”local knowledge and business relationshipsâ€”are becoming ubiquitous commodities.
In effect, fee-for-marketing providers use free technology to get smarter and smarter and delve deeper and deeper into your market.
Along with allowing social networkers a chance to pinpoint your local points of interest, these new systems also enable users to rate each item, and share their experiences and locations on their Facebook walls.
8. Status quo
While fee-for-marketing providers are retooling all the time, you are locked-in by technology budgets, overpriced technology solutions, and organizational inertia.
They change and deploy while you contemplate and dig deeper into your pockets to pay the technology monkeys on your back.
9. Other dilemmas
Your value proposition is under attack from above and below. Not only are the big guys raining free capacity down on your market, small guerrilla marketers are climbing up your back.
While you pay exorbitant fees for technology licenses and products on one end, guerrilla marketers download and launch equal or better solutions for free.
As a board member of a large California DMO put it in a recent DMAI group discussion on LinkedIn:
“The fundamental issue seems to be: how can people justify paying for membership in an organization, when with todayâ€™s technology they can duplicate most organizational functions for less money and more value? So, why pay for DMO membership?”
10. Making the move
While fee-for-marketing providers and guerrilla marketers are blanketing the sector with capable and free technologies for everyone, your hands are tied by inflated technology that inhibits your total or partial move to fee-for-marketing services.
Will you be able to re-task your systems to take advantage of hundreds of micro-markets at an endless variety of geographic scales and locations?
Or will you have to come checkbook-in-hand to your provider on an opportunity-by-opportunity basis only to be hit with another round of fees to make your transition and growth initiatives possible?
These ten considerations donâ€™t pretend to provide answers. I submit, however, that the choices are clear. Those that will benefit from adding fee-for-marketing services will be those that are lean and unencumbered by technology bloat.
Technology bloat doesnâ€™t mean bad functionality. It means an inability to dart between markets that are sometimes too small to justify expensive, item-by-item, capacity rollouts. Groups like Google, OTAs and media brands get it.
They laid technology costs flat rather than turned them vertical making markets of all sizes lucrative fee-for-marketing opportunities.
NB:Â This is a guest article by Mark Mattson, a former university professor who writes agile software solutions for the travel industry throughÂ TravelTools.