CEO Message #59

Millennial (Friendly) Tourism “Who wins the future, wins the game”

On October, I asked the Deputy Assistant for Strategic Management to hold a Focus Group Discussion (FGD) on millennial generation. There are three FGD series that have been carried out with different topics and speakers namely Prof. Rhenald Kasali, Mr. Hermawan Kartajaya and players in the industry. I want this FGD to have concrete results in the form of an action plan that can be immediately executed next year. Looking at 2019, with a target of 20 million foreign tourists I target half or 10 million foreign tourists are from the millennial segment.

As we know, millennial generation has become the excellent segment in all industries. The presence of this segment has significantly changed the business landscape, including tourism. Therefore, I feel the Ministry of tourism needs to be more serious in making strategic planning to aim at it.

In the first FGD, Prof. Rhenald as a great academic explained about the industrial landscape related to millennial generation, with the final output of recommendations for business models that can be developed at the destination. Prof. Rhenald underlined that millennials no longer want leisure, but more than that, they need to be recognized or called esteem needs.

The second series of FGDs was filled by Mr. Hermawan Kartajaya, the marketing professor. As a world-class expert, he explained how to work on this ‘sexy’ segment. Mr. Hermawan stressed, to be able to make effective strategies we must understand millennial characteristics, where he groups this segment into 4 categories namely digital savvy, advocator, experience-oriented and adventure-seeker.

Then in the third FGD, we invite players in the tourism industry who have successfully worked on this segment. Among them are Expedia, Grab, Traveloka, Airy Room, Bobobox to GenPI. I ask them to share their experiences on how to work on this generation.

Esteem Needs

As Prof. Rhenald said, millennial generation needs are esteem needs, or want to be recognized. So, according to some of us the generation above it, they look weird. For example, why now all digital destinations are getting into trending topics, it’s because they do have a need for recognition.

Why do they like relatively new destinations? It’s because they want to be recognized as the first person or a small portion who have visited the destination. Therefore adventure tourism so crowded, or sports tours such as marathons increasingly popular.

They are also very digital. In fact, I dare say, if it is not digital, it is not millennial. Therefore it will be difficult to meet millennial needs if we do not provide a digital platform. I formulated an end-to-end digital platform with a collaborative strategy as follows:

Collaborative Strategy

The More Digital, The More Personal

I often say that the more digital, the more personal. Because they are a very digital generation, they will be very personal. So, grouping them into segments is not the right way. The term is no longer segmentation, but what I say is personalization. It’s because with digital we can know them one by one precisely.

This can be proven when we do a competing destination model (CDM) strategy, a kind of programmatic advertising. When a few months ago I visited Shanghai, I met with Zamplus Tech, a big data-based IT company. In front of me they demonstrated the stages of traveling journey.

Initially they opened C-Trip, looking for the best diving spots in the world. Deliberately the stage is not completed, just look, not yet reached the book and pay. And then, they read the local news portal, and what happened? Pop-up advertisements of various diving spots in Indonesia appeared. This is what I call as very personal.

This is possible now with big data. The term is market of one or personalization, not grouped anymore, but directly to the smallest unit of the customer. Therefore, I call it a paradox where “the best segmentation is not segmenting”.

Big and Loud

Millennial generation is very large. I was quite surprised, 50% of inbound travelers to Indonesia are in millennial age category. The data might be a little wrong, but even if it’s 10% wrong, it’s still quite large. And they have a very loud voice in the media, especially social media. With large numbers and loud voices, they are very important customers.

Then, I ask myself, have we ever thought that the TVC ads that we produce are millennial-friendly? The answer is never. I feel very selfish, our ads are very product-oriented to only display the products (destinations) that we have, or the term is still “Marketing 1.0”.

I don’t care whether the ad is liked by millennial or not. However, it turns out (ads) that are viral in millennials actually I do not like it. During the third FGD yesterday I was forced to play a viral video titled Bali Cheap Paradise. It’s videos like that that ‘crazy’ young people like.

There are big, loud customers, but I don’t care. We have to do a fundamental rearrangement, whether our language is the same as the language of our main customers. So, in addition to digital platforms, the content must also be provided. They don’t watch TV anymore, but I imagine our ads appear on TV, very disconnected.

Then, there is the question again, have we built destinations based on millennial needs? Finally it turned upside down, we claim digital destinations, nomadic tourism is actually for millennials. Similar to the calendar of events (CoE) that we support, I ask Ms. Esthy as CoE Chairperson, which of the top 100 CoE minds has been designed for millennials? Therefore I instruct 20% of events at CoE 2019 to be millennial-friendly. Or even create a separate curator team which I call the Millennial Curator Team specifically for the Calendar of Events (CoE) for Millennial.

Wins the Future

This generation is always future oriented, so give that future at this time. Because these children were born now, but their needs are in the future, so come now (the future). Finally I wrote, “who wins the future, wins the game”. It is necessary to develop a special marketing strategy as an initiative to capitalize the potential of the tourism industry going forward.

For example when we read a newspaper with adult content, usually teen sheets are inserted to target future customers. I believe that if the newspaper is not given adolescent content, it will be abandoned. It’s the same if we don’t offer the future now.

Customer-Centric Organization

Now the hard thing but we must realize is to approach the customer-centric approach. The difficulty is to start from a segment that is not a segment. If the strategy changes fundamentally from product-centric to customer-centric that leads to millennial-friendly, then the organization must also change. As I often say, “structure follows strategy”.

But I don’t dare to do it now, because previous experience shows that organizational restructuring in government takes a very long and convoluted time. The hardest thing I will face is that it is impossible to change the organization in a short time, with only one year left.

Once again, because the strategy changes, the organizational structure must change: “structure follows strategy”. Strategy is at the customer level, then we talk about organization, people and culture. There was a fundamental change due to changes at the customer level.

Regards,

Dr. Ir. Arief Yahya, M.Sc.