LBS in marketing and tourism management: measuring destination loyalty with mobile positioning data

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Abstract
The aim of this article is to elaborate a mobile positioning-based methodology to measure the ‘destination loyalty’ of foreign tourists to a place. Loyal customers are highly appreciated in marketing, since they are of greater benefit than ‘on–off’ customers; they need different marketing strategies than those required to attract new visitors. Theoretical approaches to the destination loyalty of tourists suggest measuring behavioural loyalty, which we do here by detecting repeated visits. By using passive mobile positioning, we elaborated a methodology to determine repeat visits of tourists to a destination. This uses the number, duration, frequency and geography of visits in order to identify repeat visitors in a particular area. We tested the algorithm using a database containing information about foreign tourists who had visited Estonia in the past 5 years. It revealed that the algorithm permits detection of repeat visits. The results demonstrate that repeat visitors make up 29.9% of visitors to Estonia, 63.9% of the number of visits and 70.14% of the total number of visiting days. The algorithm can also be successfully applied in other location-based services solutions, in targeting location-specific advertising, m-ticketing or in personalising packages of mobile communication services.

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