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Government Agency Maximizes ROI by Reinstituting the Investment Strategy

Government Agency Maximizes ROI by Reinstituting the Investment Strategy

CHALLENGE

A destination marketing organization (DMO) of a leading tourism destination was having challenges with an ad hoc investment allocation process toward target markets. The concerns were further elevated with shrinking budgets, fast-evolving market and government pressure to enhance tourism output. The existing process was designed based on dated information, the political affinity of government toward other countries and limiting heuristic feedback of internal stakeholders. The client was under intense pressure to replace the rigid budget allocation with an agile, scientific model.

15% boosted growth over five years

APPROACH

While deep-diving into DMO’s request, we saw an opportunity to thoroughly understand the levers impacting the overall tourism ecosystem and hence determine the factors that have relevance for the client’s market prioritization. As part of initial hypothesis building, we had detailed IDIs with 60+ senior DMO stakeholders and members of the board, including the tourism minister. Based on the stakeholder inputs, we conceptualized a framework to bring together various aspects of the DMO’s business, including the key factors for target market selection, the available budgets and the tourism targets set for the country. The framework was leveraged to create a scenario planning tool which A) Evaluates the attractiveness of different opportunities while establishing the ability of the business to win within each market/opportunity; B) Prioritizes the opportunities and optimally allocates the available budgets across the prioritized markets, considering factors such as market share penetration and cost of acquisition within each market and anticipated ROI; C) Helps monitor the tourism outcomes against the set targets, as well as any new opportunities available in the market. More than 30 workshops were held with industry participants and stakeholders to help deploy the tool in DMO’s environment.

"Grail helped us with a key project that forms the cornerstone of our strategy. They helped us lay out our path for growth and assisted us in making informed choices related to our target markets and segments, the associated marketing investments and the underlying synergistic partnerships."

Chief Strategy Officer

RESULTS

The tool has become a key asset for DMO to A) Seek annual tourism marketing budget from ministry based on expected ROI from each investment, B) Prioritize 15–20 core markets among 50+ target markets of interest, and C) Help allocate budget to decide on the ground operations and marketing plan to be executed within each of prioritized markets.

Helped DMO raise investments 70X in project value in year 1