From Visitors to Ambassadors: Enhancing Customer Retention in Sri Lanka’s Tourism Sector
View(s):Currently, the Sri Lankan tourism industry can be considered one of the strategically important sectors for income generation and nation branding. In the year 2023, Sri Lanka earned around 2 Billion US dollars from tourism. This year we are expected to earn around 2.4 Billion US dollars .In this scenario there are many strategies that can be recommended for the sector and in this article we discuss “The Role of Customer Retention in Sri Lankan Tourism”. In Sri Lanka’s tourism sector, customer retention can be considered as one important strategy which transforms one-time visitors into lifelong advocates of our island’s charm.
Nalin’s Insights: Bridging Marketing and Economic Trends
We always like to explore many concepts in the subject domain of marketing.it is all about new developments in the subject with all the latest in marketing. From that perspective, we cannot underestimate the importance of the concept of Relationship Marketing. You can define Relationship Marketing in different ways and also by looking at the depth and width of the subject it is always aligned with different dimensions. The concept of relationship marketing which is not a new concept anyway has changed the focus of marketing from attracting short-term transactional-oriented customers to long-lasting retaining customers. The main focus of Relationship Marketing is all about having a long-term mutually beneficial relationship between you and your customer. Marketing literature proposes relationship marketing with a customer’s lifetime value. According to Kotler and Amstrong (2001) “Companies are also realising that losing a customer means losing more than a single sale, it means losing the entire stream of purchases that the customer would have made over a lifetime of purchase”. Because of that many experts in marketing are really concerned about “retaining customers”. Basically industry reports said that “acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one”. And also one of the interesting studies done by Frederick Reichheld of Bain & Company argued that increasing customer retention rates by 5% increases profits by 25% to 95%. In the tourism sector customer retention is one of the important mantra.And also we need to see best practices applied to customer retention in different countries as well.
It is interesting to discuss different strategies that some countries have applied to attract Chinese tourists. Even countries like Australia are conducting special programmes to attract and retain tourists from China. Some hotel chains, for instance, have even rearranged the furniture in their rooms across the country according to the principles of feng shui (pronounced fung shway), an intuitive art. Designers and decorators claim that they can “feel” positive energy – called ch’i), assuring guests will have a harmonious stay! Even professors in Australia are conducting research to understand the buying behaviour of Chinese tourists. According to Sam Huang, a lecturer at the University of South Australia, “Chinese tourists want to return home from overseas trips with luxury goods as a symbol of their wealth.”.Even , US hotels have diverse and effective strategies to attract more Chinese tourists. Hotels that expect to attract and retain Chinese customers (travellers) teach their front desk staff and reservations agents, basic cultural information about the Chinese. There are many examples of cultural sensitivity; guests from China are not given rooms that include the number four, which is considered unlucky because it sounds like the word for death. According to the article published by time.com “Marriott has stationed 20 sales representatives in China and teaches employees in the U.S. to speak basic Mandarin phrases like ‘hello’ and ‘thank you’. The Marriott Marquis in New York City has even replaced room numbers on the 44th floor with names because the number four is considered “bad luck” in many Asian cultures(business.time.com)”.
The above examples and best practices would give us an idea of how importance of research and case studies to develop Sri lankan tourism.And also there are many cases of highlighting the partnerships and collaborations between industry and academia to have some research, plan, and strategies to retain different segments of customers.
In the tourism sector managing the typical marketing-mix dimensions of product, price, promotion, and place(4 Ps in Marketing ) always needs to combine with interactive marketing dimensions.The concept of Relationship marketing (with customer retention and attraction) always focus not only on the traditional four Ps’ of product, price, promotion,n and place but also on the additional three Ps in services marketing( four Ps plus people, processes and physical evidence). Marketing analytics also would play an important role, with different proportions that need to be taken into consideration .As White (2022) highlights, the integration of online and offline channels in the tourism sector is becoming increasingly seamless. With advancements in augmented reality (AR) and virtual reality (VR) technologies, the cost of these devices is expected to decline significantly, making them more accessible. AR and VR will revolutionize how travellers explore destinations, activities, and experiences, offering a “try before you buy” approach during the pre-purchase phase. This trend mirrors developments in the retail industry over the past decade, where immersive experiences have gained traction among brands. (For a more detailed analysis, refer to White’s article, “E-commerce Trends for the Tourism and Travel Industry,2022).
Sri Lanka needs to have a future focus in terms of tourism and there should be some long-term strategies in this context. If you have more loyal customers with better retention then you might have more competitive advantage than other players(countries ) in the market. In Sri Lankan tourism there should be separate strategies to retain customers. we need to see the best practices of other countries as well. The authentic “smile “ of Sri Lankans can be considered as one attraction to retain customers. In this context, a separate body should represent the Ministry of Tourism, hotels and universities to capture real-time data on retaining customers and propose some strategies to key stakeholders. The time has come for us to rethink our retention strategies to have a recognised passport in the long run.
(The writer is a Professor in Management Studies
at the Open University
of Sri Lanka You can reach Professor Abeysekera via nalinabeysekera
@gmail.com.)
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