There are some influential forces at work in travel, shaping how the market is evolving and challenging brands to think carefully about the future.
Alternative accommodation options such as Airbnb, low-cost airlines expanding into transatlantic flights and greater expectation from consumers in terms of choice, price and convenience, means that competition in the hospitality and airline industries is more aggressive than ever.
With brands throughout the world vying for consumers’ attention, offering them a wide range of incentives from discounts, loyalty currency, cash-back and rewards, it can be difficult to cut through the noise.
NB: This is an analysis by Guy Deslandes, ecommerce sales director at Collinson.
Loyalty programmes do work but a sub-standard, inflexible and purely commercial approach will no longer cut it.
There needs to be an emotional connection derived from positive engagement, allowing members to more easily access and engage with loyalty currency and rewards.
Ultimately, at the heart of any proposition must be a focus on the member and the mechanisms for enriching their overall brand experience.
Listening to what members really want and serving up content and experiences based on individual unique personas, in a timely and relevant manner, is most definitely the way forward.
Making loyalty part of everyday life
Even the most frequent traveller may only book a hotel stay or flight several times a month and for the masses, it can be as little as once or twice a year.
The onus is on brands to create new and relevant ways for consumers to both earn and redeem loyalty currency, while also looking at initiatives that make loyalty more a part of their members’ everyday lives.
Within travel, the likes of Virgin Atlantic has extended its member earning opportunities from their online eStores to the high-street, with payment card-linked-offer solutions being rolled out in the past 12 months.
Quite simply, this allows the members of a loyalty programme to register a debit or credit card with the Earn Mall or eStore in question and then shop with the selected retailer’s (those who are a part of the in-Store/Card-Linked-Offers programme) to earn the respective loyalty currency.
This is important for both the member and programme provider, as it shifts earning opportunities and engagement levels more towards the “every-day”.
Our recent survey of 2,250 global hotel and airline loyalty programme members, which focused on redemption, also supports this in-store progression.
Over half (58% of airline and 48% of hotel) members want flexibility in how they redeem their points and feel the value of a loyalty programme decreases if points cannot be redeemed in-store.
While it may seem like a tall order to implement new and improved earning and redemption opportunities, technology is making it easier.
Brands can call on loyalty providers with advanced loyalty eco-systems that not only encompass earning and redemption processes, but also the management and contextualisation of customer data.
With consumers more digitally astute than ever, having a partner that has the various solutions and processes in place to extend member engagement and put the customer at the heart of your loyalty programme is now more than ever, of the utmost importance.
Reenergise your rewards
Many hotel and airline loyalty programmes only offer the opportunity to redeem points against existing inventory, for example, booking a flight when part of an airline programme or booking a hotel room, when part of a hospitality programme.
However, our research shows that two-thirds of consumers (75%) expect greater choice of rewards, with over half (52%) describing brands which only allow them to redeem their loyalty points on these traditional offerings as "dated" and "old fashioned".
We are seeing more innovative brands going beyond the norm (non-core inventory) by offering unique and exclusive social or cultural experiences, enabling members to enjoy discounts at retail outlets and the ability to purchase consumer goods such as electronics, homewares and health and beauty gifts.
Some travel brands allow their customers to spend miles on a whole host of products, from power tools to family days out, and high-end toiletries at their respective online redemption stores.
Offering the customer choice by customising their loyalty experience to their hobbies, interests and personalities in such a way helps keep the brand front-of-mind in their everyday lives.
Added to this, the research showed that loyalty programmes that offer these non-core inventory rewards actually drive a positive commercial impact.
The report reveals that for customers who hadn’t engaged with their programme in over three months, over half (59%) of these members report that a redemption had driven a re-engagement with their programme, with 67% redeeming on non-core inventory in comparison to just 55% on core.
A further 65% of members state that they would fly or stay with an airline or hotel brand "whenever possible" following a positive redemption experience.
More relevant and engaging experiences
According to research by Deloitte, consumers have become both critics and creators, expecting to be given the opportunity to shape the products and services they consume.
From a loyalty perspective, this means giving people the choice for how a programme works for them. This could be personalised in terms of the actual opportunities to earn or redeem points on, or the mechanisms and devices that they choose to engage with.
Advances in mobile technology, location-based services, opt-in services and apps are now all creating more opportunities for loyalty programme members to earn, redeem and personalise services. And, ultimately, become part of consumers’ everyday lives.
Experience-based rewards are powerful because they align more naturally to members specific personalities and hobbies and are therefore extremely powerful in building more emotional connections with a brand.
In addition to this and further building upon the relevancy of a programme for members, some hotel chains offer three forms of payment (cash only, cash and points or points only) to their members.
This ensures that the rewards members want are increasingly accessible, therefore helping to drive increased member engagement and bottom line success.
Given competition in the hotel and airline sectors shows no signs of abating, enhancing loyalty programmes to put consumers at the heart will become an increasing priority for businesses.
Critical to this will be creating more engagement opportunities with customers both offline and online, and converging customer touch-points into more easily accessible and frictionless solutions.
Get this right and brands will be able to see a tangible impact in re-engaging lapsed customers, driving repeat business and improving overall brand equity.
NB: This is an analysis by Guy Deslandes, ecommerce sales director at Collinson.
NB2:Travel heart image via BigStock.