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June 2, 2008

The winning bid | Kennebunk-based Davidson-Peterson Associates lands the state's high-profile tourism research contract

After trying five times in eight years to win a state contract to track Maine's most valuable import — tourists — a market research firm in southern Maine this year finally came away with the prize.

Last year, after the bidding process was wrapped up for the Maine Office of Tourism's annual study, "Visitor Tracking and Advertising Effectiveness Research," Kennebunk-based Davidson-Peterson Associates did not simply step aside when the $200,000 project was again awarded to a Canadian company. The thus-far unbeaten champion, Toronto-based Longwoods International, had held the contract for 12 years, ever since the tourism office started to regularly collect data.

That Davidson-Peterson in eight years had not landed the state's tourism account was perplexing to the company. Company President Robert Domine figured that since there are only four or five companies qualified to do the tourism research the MOT was looking for, the state would want to take a shot with the local company. "Politically, it was odd that the state of Maine would hire a Canadian company to look at Maine's most important industry," he says.

Steve Lyons, the marketing director for the Maine Office of Tourism, sounds pleased to be partnering with Davidson-Peterson. "We're looking forward to the change, and we're pleased to be working with a Maine company," he says.

But Lyons stresses that just because a company is local doesn't necessarily make it the best choice for the job. Instead, the MOT's decision-making process is not supposed to take into account where the company is located. "You can't go into the review process with someone in mind because then it wouldn't be fair," he said.

Thaxter Trafton, deputy commissioner for the Maine Department of Economic and Community Development, says the state has an obligation to look out for the best interest of Maine taxpayers by choosing the best available candidate. Trafton was one of the three members on the final selection committee that tapped Davidson-Peterson for the contract. "We're looking out for Maine people by hiring the best people we can get," Trafton says. "God knows, for our department, creating jobs is one of our greatest missions. It hurts us deep down when we don't hire Maine companies. But if they're not the best-qualified company, we're not going to hire them."

Now that Davidson-Peterson is taking over the job, the company must prove that the state didn't make the wrong decision. Davidson-Peterson's employees are confident they can do the work. After all, they say they've worked in almost every U.S. state collecting travel data, and they have Fortune 500 companies as clients. And unlike Longwoods, Davidson-Peterson will collect travel data and report its findings to the MOT after every season rather than once a year.

The embattled bids

In March, Davidson-Peterson heard it had at last received the elusive one-year state contract. It had submitted a bid of $192,100 with the option of two one-year renewals, and had beaten Longwoods by a wispy 3.7 points out of a possible 100. The firm won its advantage in the RFP's interview category, which asked bidders to meet with MOT officials to discuss their research plans. (For more on this, see "Up close and personal," this page.) The meeting gained Davidson-Peterson a three point lead over Longwoods. It earned the remaining 0.7 of a point by pricing itself $7,900 lower than Longwoods' fee of $200,000 — a strategic move Davidson-Peterson made deliberately after noting that in the first bidding round, it had priced itself $7,800 higher than Longwoods.

Bill Siegel, Longwoods' chairman and founder, says it's a regular part of business to lose accounts. "We're proud of our work, and proud of our work with Maine, and we're very sorry they've chosen to work with another firm at this point," he says, adding that he'd be happy to rebid on future contracts.

Regardless of who's crunching the data, the MOT's survey is critical for the state's tourism industry. Fact is, Maine could not survive without tourism. In 2006, tourists in Maine generated $10 billion in sales, created 140,000 jobs and stirred up $429 million in taxes, according to the Maine State Planning office. Understanding who tourists are, where they live and what they do when they are in Maine can help tourism officials better tailor their marketing and advertising strategies.

Since 1996, the state tourism office has bought annual data on tourist visits to Maine, looking at facts like where visitors go and what they buy, Lyons says. Every three or so years this contract is reopened to new bids.

Robert Domine first tried to land the tourism contract in 2000, a year after he had purchased York-based Davidson-Peterson Associates. Domine, a Michigan native, moved his market research company, Digital Research Inc., to Maine from Connecticut in 1996. Davidson-Peterson is now a division of Digital Research, which employs 25.

Davidson-Peterson was founded by a married couple, Karen Peterson and Tom Davidson, in 1974, and has always specialized in the tourism and travel industry. Over 34 years it has collected travel data in 47 states, from Wisconsin to Florida, according to Domine.

Despite Domine's attempt to nail the bid in 2000, the contract was awarded to Longwoods. Domine successfully appealed the outcome on procedural grounds. But in round two, Domine's company still came in second.

When the contract came up for renewal in 2004, Davidson-Peterson went after it once more. But again, it lost to Longwoods. That time, Domine decided not to appeal because Davidson-Peterson was having a particularly robust year.

Three years passed. In 2007, the state tourism office reissued its formal RFP. Four companies bid on the contract, and Longwoods came out ahead. But just by a hair.

"Darn it, what's the deal here?" Domine describes his response when he lost again. He says his employees convinced him to appeal, that it didn't look good for the travel research company to not get hired on its home turf.

Longwoods had won the contract by a mere 4.5 points, racking up a score of 257.23 based on how the selection committee calculated the company's qualifications. Davidson-Peterson lost points when it pitched a pricier package than Longwoods's $200,000 bid.

Not discouraged by the loss, Davidson-Peterson contested the award last spring on several grounds, resulting in a nine-month appeal and rebidding process that prevented any tourist data from being collected in 2007. An appeals panel agreed with only one of the company's six arguments — that one of the selection committee members, Peter Daigle, had not made a consistent written record of his findings for the sake of a clear public record. This singular finding was enough to cancel the original contract.

The three new members of the selection committee — all DECD employees and no one from the tourism industry — totaled their scorecards again and, by the razor-slim margin, handed the contract to the Maine company.


A different approach

Longwoods' traditionally gave the state an annual report of data collected the previous year. Davidson-Peterson will collect information from online sources, as it has done for years, rather than the mail-in surveys Longwoods used. (Longwoods, however, recently started collecting data online.)

The MOT's Lyons says receiving reports throughout the year is especially valuable in a shaky economy. "More frequent updates are going to be helpful for us, particularly in a year with people being cautious about the economy and rising gas prices," he says. "We'll get a better feel for the market on a shorter-term basis, and it'll help us as we plan our marketing program throughout the year."

For instance, if tourists are driving shorter distances, the state's advertising will focus more on local markets and the fun of "staycations," an industry term for finding escapes in your own backyard.

Davidson-Peterson uses companies like e-Rewards to survey panels of on-line participants. Queries are made about personal information, such as panel members' income, education and whether they have children. When panel members indicate they had visited Maine, they would be asked more specific questions, such as how many nights they stayed, what kind of accommodations they used, what they did, what they bought and how much they spent, as well as their views on travel, what they try to get out of a trip, and their impressions of Maine.

Moreover, Davidson-Peterson will not only be analyzing what tourists did in Maine, but it will also analyze the vacationer who chose not to come to Maine.

"This is information they've never had before," says Jane Mount, Digital Research's vice president of research services.

And Lyons, for one, is looking forward to this unknown data. Perhaps, he says, "there is a perception problem that we can address. We'll focus our marketing efforts where they're most effective," he says.

Mount also explains that Davidson-Peterson will collect data on Canadian visitors, not just Americans. French-Canadians, especially, are becoming more important to the state in the age of the declining dollar.

Finally, all the data collected by Davidson-Peterson will be turned over to the tourism office. "Maine has never had access to the raw data," Domine says.

Lyons says the state never asked for data from Longwoods, but that being able to tap data will be helpful for comparison studies.

Domine says, "There were all these small subtle points, and we were claiming this wasn't the best for the state of Maine."

Davidson-Peterson Associates

President: Robert Domine
Founded: 1974
Employees: 25, including parent company Digital Research Inc.
Service: Travel tourism market research
2007 revenue: $3 million for Digital Research Inc., of which Davidson-Peterson is a subsidiary
Contact: 985-1790
www.dpaonline.com

Up close and personal

For years, the Maine Office of Tourism didn't believe Kennebunk-based research firm Davidson-Peterson was the best candidate to handle and parse the valuable data from its annual tourism study. In fact, the MOT might never have changed its mind had company employees and Davidson-Peterson President Robert Domine never shown up in Augusta this winter for an in-person interview.

The interview was introduced in a revised request-for-proposal the MOT issued in January 2008, almost a year after the first RFP was advertised in April 2007. That RFP soon after was awarded to Longwoods, but was appealed by Davidson-Peterson and rebid last summer.

After the appeal was approved, Pat Eltman, the director of Maine's Office of Tourism, decided to alter the RFP, asking for more timely seasonal information and for a bidder interview, which requires that company representatives present their research plans to the three-person selection committee. Eltman, who was named to the MOT's commissioner post 15 months ago, says the period between the appeal and the rebid gave her a chance to redefine the office's needs. "We live in a world where we have to be more flexible," she says, and being able to react to current seasonal information rather than annual data helps the tourism office adjust its advertising.

Davidson-Peterson employees credit the up-close meeting they had Feb. 13 with pushing them into first place. "This whole team went up there and said, 'We could do this work,' and answered their questions completely," Domine says.

The turnout impressed Jim Nimon, who was on the selection committee and is director of the Office of Business Development for the DECD. "Half a dozen people came from the agency ˆ— that is pretty impressive. They had all the folks in the room who could present to us on their history and the details on what they had done in the past," Nimon says.

Rebecca Goldfine

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