Where else would a new travel business be thought of, other than on a beach? Paul Evans, founder of the Low Cost Travel Group (LCTG) did just that.
Evans has vast experience of the travel industry that includes MD of First Choice, MD of Going Places and Purchasing Director of Airtours. However in November 2004, in a barn next to Evans house The Low Cost Travel Group started and has grown into a Multi million-turnover company.
Lowcostbeds.com launched the company as the main brand. Evans then swiftly created Low Cost holidays which now includes under the Low Cost brand, skiing, specific destination holidays such as Ibiza, Tunisia, Egypt and the Caribbean, seats - flight only, and holiday insurance.
For the beginning Evans built a team from those people he knew within the industry with expert knowledge and staffing levels have grown from 8-80 since they started.
Although an online business only a few of the staff work virtually. The majority of LCTG staff work in a dedicated call centre in Basingstoke, or their head office in East Grinstead that houses customer service, accounts, commercial, Operations and trading staff.
But it's not just the staff that has contributed in terms of growth, building up an email database, affiliate campaigns, dedicated web sites, newsletters, and email campaigns have been the backbone of growing the business.
Paul Greenhalgh joined LCTG in January 2005 working initially as a Consultant, and now is Direct Marketing Manager.
He said, "Predominantly we offer bucket and spade, resort based holidays - however recently we've launched, Low Cost Villa Rentals, Low Cost Cruising, Cities, and offer not only lowcost and charter flying but also schedule flying."
For the retail side travel agents have their own version of the LCTG website, and then there are customer facing sites, but the work that drives the traffic has obviously been key. Although there is considerable knowledge within the company there has been an enormous learning curve that LCTG have been quick to respond to.
"From day one we grew and built up an inventory of 100,000+ keywords into search engines, Google, Yahoo, MSN and travel portals including Travel Supermarket, Kelkoo. What we didn't do is start SEO (search engine optimisation) from day one - a mistake -which we rectified.
The golden rule is that your site has to be search engine friendly and with the ever changing algorithms your site has to remain fresh and highly relevant"
SEO and keyword usage helped build organic search but were used together with a brand building exercise; a combination of banner ads on blind networks -where brands pay for so many impressions but the ads could appear anywhere such as eBay, - PR, both on and offline press, and building an email database.
Other marketing tools include branded notice boards in resorts, and leaflet drops to targeted UK geographical areas.
Paul Greenhalgh (pictured) is responsible for all the Pay Per Click (PPC) and Affiliates campaigns and has passed SEO to another part of the business "to be done properly (SEO) requires a great deal of time" he adds.
He continued, "Online marketing is really our strength. We use a software package tracking PPC so we know where those people come from geographically through cookie monitoring and IP address, this can be used for targeted email drops.
“We're strong in the Midlands for example and we could utilise this at a later date for targeted press campaigns. We also use demographics a great deal, we have a vast range of customers now and although they may need bucket and spade holidays currently, as they and their families get older their holiday needs change.
Greenhalgh added, “We can filter their needs to target specific holidays - a typical customer for cruises could be 46-55 year olds and live in Kent. Our resort holidays also appeal to different audiences so Ibiza can appeal to both 18-24 year olds from Manchester or a 30-40yr old family from Glasgow.
Further more we can track male/female, income brackets, regions of the UK, Homeowners/people that rent etc via our E mail campaigns and use this information to target future/repeat customers to the site(s)."
There was a lot of trial and error regarding PPC. At times LCTG put their sites onto different travel portals where the conversion rate was so poor they had to stop the campaigns.
The low conversion was due to a mixture of reasons, price, stock and/or site navigation issues. Focusing on their ROI meant LCTG had to look at their sites more carefully and improve their weaknesses. However this learning process has all been tremendously useful in streamlining their business.
Greenhalgh said, "On PPC we can use day parting which means we switch the PPC campaigns on and off at certain times of the day to capture ‘true bookers’ and not ‘tyre kickers’ passing five minutes at work.
“We can see periods in the day for busiest times of searching - turn off when users are least likely to search and back on when busy. E.g. people search at lunchtime, but between 5-6 people are traveling home - so there's no real point in having a campaign up at that time or at least not spending as high on your CPC."
He added, "A classic mistake to make is that people bid on more generic terms - e.g. Hotel in Tenerife, while you must still have a presence on the main generic term you can reduce your overheads and CPA (cost per acquisition) as well as your CPC (cost per click) by bidding on lower cost sub resort keywords and specific hotels and focusing on the tail.
This year the company aims to reduce our CPA and increase their return on investment - both by 50%.
Affiliate marketing has an expanding role in customer acquisition.
Greenhalgh said, “We treat the affiliate as a travel agent - in the same way as we'd give a commission to retailers/travel agents. We are trying to have more 1-2-1 relationships with the affiliates, not to cut out the network but to incentivise our top core affiliates with special offers, bonus incentives, and free holidays.
“We'll always need the network to manage the day to day running of the campaigns but as a merchant we have to give the commercial/yield input, incentivise all the affiliates and manage the communication of information. Business from affiliates currently accounts for 10% of our direct business, and is growing.
He added, “We probably got it wrong at the beginning - believing the more networks we were on the more business we would get, we've probably been on all the networks that are out there! But we learnt that too many cooks spoil the broth if too many networks are involved it dilutes your offering and brand - having different commission levels across different networks means the affiliates will just move across to the network paying the most money or just not bother with your campaign at all.
“This obviously wastes a lot of time and energy. Now we work with just two affiliate networks the main one being Affiliate Window. It's easier to target the super affiliates, incentivise them and put more energy to specific campaigns with far better results and we still have over 1,000 affiliates promoting our brand."
Since making that decision affiliate business via Affiliate Window has gone up five fold in the last 12 months making LCTG one of Affiliate Window's key travel merchants, quite an achievement.
Said Greenhalgh, "Affiliate Window's interface and software are fantastic and simple to use but to support affiliates in driving traffic and sales. We the merchant must ensure our own sites are user friendly, that we provide an up to data product feed and are competitive."
“A good tip is to remove your telephone number from all your prominent site pages."
Head of Communications of Affiliate Window, David Hall, went on to say, "Travel companies are very comfortable with the concept of affiliate marketing, having worked with high street travel agents for years before the advent of the Internet.
“Moving this relationship online is a simple step for them and very important one due to an ever-increasing number of people using the Internet to make all their holiday arrangements.
He added, “At Affiliate Window we are focused delivering sales that in the absence of an affiliate marketing scheme would go to their competitors."
Greenhalgh concluded, "The pleasure of my work is taking The Low Cost Travel Group from zero visitors to attracting over 1.8 million visits a month across the group, and this is just the start!"
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