Last week the industry and mainstream media in Europe were talking a lot about Thomas Cook. Why? Because new(ish) CEO Harriet Green has a plan to turn around the company.
Green (a tweeting CEO with a tech background), after bemoaning how the business was insular and fragmented when she took over, wants her strategy to revolve around, well, technology and thinkers from the outside.
She has previously stated she wishes to move online bookings from a current level of 33% to 50% across the overall business.
Ultimately the objective is an "omni-channel distribution strategy" (no, I have no idea what this means either).
Assisting Green is a newly formed Digital Advisory Board. The group (made up of "gurus", as Thomas Cook call them) is there to help configure and execute this strategic objective.
Although many media pixels were spent last week talking about the new strategy, there seems to be very little public meat on the bone.
But what is clear is that the brand is ready for some risk. Just executing 5% or even 20% better than its nearest competitors will not be sufficient.
Hence instead of being a "better and bigger Expedia" (it's previous mantra), Thomas Cook should aim to be where Expedia will be in five years time, and get there first. That is how you win.
Now, I haven't been asked to be on the Thomas Cook Digital Advisory Board, but if I had, here is what I would be suggesting:
A new mindset
I spend a lot of time with travel startups. We know that a very low % ultimately succeed. But this is not through lack of ambition or attitude.
Throughout my years working in hotel chains, airlines and leading tour operators, I have rarely met so many people as passionate and entrepreneurial as people I meet within travel startups.
What Thomas Cook needs is an infusion of these qualities into its regular technology teams.
Travel startups have a corresponding need. Many struggle to get access to data they need to power their businesses. Many struggle because they have limited real industry experience, so are solving problems that don't really exist, or have already been solved.
They need real time working within real company environments to learn a few core lessons. But they don't want to be employees.
So how about bringing these two together. Both need it.
Thomas Cook should have a travel startup scheme. Bring in a number of two-person teams; pay them a salary for 12 months; give them access to the Thomas Cook data (product, bookings, customers etc); give them some seed funding perhaps in return for a low portion of equity.
Let these startups innovate on the data. See what they come up with.
They could probably attend internal meetings - brand, marketing, distribution, ecommerce, retail and pricing. Let the internal knowledge rub off on the startups, lets the startups aptitude rub off on the internal staff. Invite the startups onto the Digital Advisory Board.
Ultimately, some of these startups will come up with great ideas and technology solutions. Others may find that they are not really wishing to pursue an entrepreneurial lifestyle, but many of these will probably, having been exposed to the Thomas Cook internal processes, make great new employees.
Either way, Thomas Cook will win.
Next, Thomas Cook needs to win "in-destination". Expedia, Booking.com et al are performing very well nicely on the "where you want to go" element, but Thomas Cook can win with "welcome to destination ABC".
We know TUI Travel is investing in this area (with its acquisition of Isango), so what could or should Thomas Cook do, beyond just having lots of fun, kerzaee and, obviously, helpful reps kicking about in a destination.
I would first take a look at the person-to-person tour and activity marketplaces for inspiration. SideTour, Vayable, Gidsy, Peek and TripBod are trying to show how you can present a destination, via commission-based products, but in a non-mainstream way.
But most of these are small businesses - they have long tail product in long tail destinations.
Instead, a big brand such as Thomas Cook can invigorate one of these companies. These companies could move to providing long tail product in mainstream destinations... Thomas Cook can give them the consumer volumes to make their models work at scale.
Thomas Cook, by getting ahead of the in-destination curve, can bring the market towards them rather than try to out-execute competitors in the tired, outbound travel model. Risky, but a risk worth taking.
No strategy is complete without a solution a what do do with the network of offline retail travel agents that Thomas Cook has under its tutelage.
Now, these people are golden. But no doubt they are being used incorrectly.
High Street (or Main Street, for US readers) travel agents have expertise in three areas:
- How to book (and find the best price)
- The product
- The destination
For too long travel agents have traded on their how to book
expertise. When you talk to a travel agent and they understand how to comprehend and fix the following...
"...an uneven exchange of two conjunctive tickets, with a ticket time limit problem that an airline was able to override but yet I still got an ADM on the WHOLE ticket..."
...I generally say "WOW!", that's great.
But the web arguably makes this knowledge obsolete. Computers solve this particular problem better (or, if computers can't fix it, efficient human in a centralised support centre should be used rather than humans in expensive high street retail locations).
But what these high street travel agents do have is great product and destination knowledge. So they need to be retained.
However, these travel agents are working the wrong hours in the wrong place. Move them to web-based working. Move them to early evening, ready to have one-to-one web conversations about particular products or destinations.
If, at a national level, Thomas Cook has 50 people who are experts in European families going to Mexico, get them in a marketplace system. When the customer comes online and expresses an interest in going to Mexico with their family, get the best person online there and then.
Technology can do this.
Humans are key to driving conversions (or just reassuring question-laden consumers). But they don't need to do the actual booking.
For too long travel agents have been rewarded by commission, which comes from entering a booking. Instead, innovate on how to reward travel agents product and destination expertise.
Create human product and destination specialists (rather than booking generalists) and let web technology deliver that expertise to the customer at the right time.
When everyone thinks you are down and out, you are free to take risks. Thomas Cook is in a great position as risk-taking comes with very little executive downside.
Just executing better what everyone else is doing won't be sufficient. I look forward to seeing what they come up with...
NB:Guru laptop and Outside box images via Shutterstock, Thomas Cook rep via TripAdvisor.