The oldest tour operators in the world, founded in 1841 in the UK just went bankrupt this year, in September (2019). It has engendered many consequences on their 22 000 employees and 600 000 travellers (their customers). Indeed, their activities have immediately stopped forcing their clients to repatriate.
Even if the founder of the company, Thomas Cook, passed away long time ago (1892), the company has still grown to become a leader in the travel sectors.
In many countries, Thomas Cook has filled for bankruptcy and France was not an exception. How could such a travel giant like Thomas Cook fail to the point of going bankrupt ?
First of all, let’s look at the perceived value, due to their experience and history, which play an important part in customer loyalty and acquisition. But at the same time, it seems that Thomas Cook has taken for granted this advantage that was given to them, indeed these past years, we didn’t see any real change that can help the company keep his place as a leader, their revenue chart speaks for itself : since 2011, their revenue hasn’t changed a lot and it decreases a little bit. In the technology era, the incapacity of adapting to change can be fatal. It had ended up with Thomas Cook losing some market shares, but more importantly, they lost their capacity to attract new customer.
Image from https://www.statista.com
In an article from BBC, they stated that Thomas Cook made a huge error for not creating their own tangible assets (hostels / planes) because it create a gap for competitors and consequently weakened the customer loyalty and the bond Thomas Cook created with their customers.
Now let’s have a look at their website, there is nothing special on their homepage, it is very simple and without their logo, you won’t be able to distinct them from another brand, there is only a research function, no recommendations.
Screenshot from https://www.thomascook.fr
From my point of view, the website doesn’t really look professional and trustworthy. Another thing that I notice is their lack of choice : for example, if I want to travel to Santorin, there is no possibility. If I want to go to Sicilia, there is only one choice.
Screenshot from https://www.thomascook.fr
Another point is marketing, Thomas Cook didn’t connect with the new generation emotionally. They are not really active on Instagram (1 post per week on average), it is not enough in our digital and social media era, another company like Promovacances post once a day. Also, they don’t use celebrities to promote their services, which is a huge mistake because the new generation is connected to a brand through their celebrities : for example, Nike has personalities like Michael Jordan and Cristiano Ronaldo, that’s why a lot of teenagers who plays basketball and football wears Nike shoes and clothes.
Finally, Thomas Cook maintains their strategies of doing the full package trip, which is not suitable for younger people. The company clearly has no emotional connection with our new generation, they didn’t understand the new needs created through digital tools : flexibility and independence.
Now let’s look at their physical store, it is very important that the store must look attractive because it is a touch point with their customers. If you look at the entrance of a Thomas Cook’s agency, it looks average, nothing special.
Image from http://www.webdo.tn
And when we go inside an agency, it looks a little bit boring : the color, the furniture doesn’t really create the desire to travel. Sometimes, less is more and it seems that Thomas Cook is doing too much with the design.
Image from https://www.tellerreport.com
These past years, Thomas Cook lost their emotional connection with their already existing customers. When you search for feedback on Google, you can’t find anything but unhappy customers sharing their horrible experience with the brands : unprofessionalism, bad customer service, false advertising (due to bad partnership).
Screenshot from Trustpilot.com
We can conclude that Thomas Cook made a really bad decision : bad partnership, bad customer service, bad store and website design. All of these have created negative emotions with their customers : it created bad social proof and frightened new (possible) customers. It slowly weakened their customer loyalty and a steadily decreases in net profits : in the half first of 2019, they lost almost £1.5 billion (that added up to their initial debt of £1.7 billion). All of these factors have led to the downfall of such a travel giant.
Vincent TIENG
Sources :
https://www.20minutes.fr
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