Market Segmentation

Last week I took a call from Seattle. A VIP with private jet wanted a quick four days in New Zealand filled with helicopters, caves and luxury lodges. We had the rough concept outlined and agreed in five minutes and fully costed, quoted and booked within 24 hours. Their trip was "in the system" with private jet handlers, helicopter operators, private guides and lodges all working together and aware of the whole plan.

We were very happy. Quite apart from the revenue, we were dealing with our target market in a way which made us feel good about ourselves. Responding quickly, creatively, professionally and exceeding expectations. Putting together a top team which will ensure their memories of New Zealand are varied - from characterful helicopter pilots through to guides who really cannot be any more Kiwi than they are, and of course (our trademark) some experiences which you cannot get anywhere else.

Last week we also received an enquiry from a wonderful agent we work with in Russia. She had a special request for someone on a budget who would be in Auckland for a few days. Of course, we look after our agents so it was important to us to get this right. However, our airport VIP service was not appropriate, nor our luxury touring service, nor our normal accommodation partners in Auckland. They were all too expensive. So we spent 24 hours researching, approaching the right property (who of course had never heard of us), negotiating rates and responding. Result - happy client but a lot more work on our part. Despite thinking we were smart, when it comes to this level of the market, we were relatively ignorant.

This started me thinking about market segmentation in tourism. It used to be that tourism was ruled by the distribution channels - retail travel agencies who knew how to book flights and use the appropriate proprietary terminals, backed up by wholesalers with an imperfect knowledge of destination markets. This is the set-up which has been serviced by Trenz for so long. To become a specialist 'one-country' provider was simply too expensive in marketing terms - all that network and only focussed on New Zealand? Not enough throughput to support a profitable business.

Along came the internet and the home offices, allowing specialists to spring up all over the place and offer specialised services. No more junior staff in big organisations handling your enquiry - it was now senior owner-operators taking great care of their lifestyle businesses, and, as a result, of you. We were one of these, six years ago.

Of those start-ups who survived past their initial optimism, almost all have specialised. Some have focussed on gay tours, others on diving, others on mid-level luxury B&B tours. We were lucky enough to stay with our target market at the top end.

But again, that's not the point. I was thinking that there has been some small seepage out of the system into direct bookings with small specialised operators, but the majority of bookings still comes from the big networks with the wide distribution channels and high street presence. Some studies say that their business is on the decline, albeit a slow decline, as they are being outmanoeuvred by the smart little companies like us. However, as someone who used to work in a smart, big company, I still fail to understand why these large conglomerates fail to make use of the little smart companies and so stop the erosion of their business. All it would take is a little humility in accepting that there are specialists out there who can do a better job, so why not work with them?

In case anyone is unaware - we specialise in real luxury - not booking lodges and drivers and leaving clients to their own devices - but understanding what our clients are after and creating and delivering it.

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