The key to long-term loyalty
for travel brands comes from creating memorable experiences based on superior
products and personalized service.
And while brands say they
are aware of this, they still rely primarily on discounts and coupons to drive
loyalty - a practice that is waning in effectiveness and sustainability.
Those are some of the
conclusion in Travel Loyalty Report: A wake-up
call for sleepwalking loyalty programs, a report from Expedia Affiliate Network and Points –
a provider of loyalty technology solutions - from surveys conducted by Atomik Research
in October 2017.
The analysis is based on
responses from 523 senior employees of offline and online travel agencies,
corporate travel agents, loyalty companies and airlines from Europe, the Middle
East, the Americas and Asia. Expedia Affiliate Network also conducted
interviews with some senior executives with travel loyalty programs.
Discounts and coupons came
in as the top-ranking tactic for driving loyalty, with nearly two-thirds - 61%
- of survey respondents saying they use them.
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But when asked what tactics
they deem the most effective at driving loyalty, respondents ranked “breadth of
products and services” and “improving customer experience” as having the most
impact.
Yet the report finds “there
seems to be a distinct gap between insights and actions” since only half of
respondents said they are actively working to improve their customer experience
and only 33% are adopting a greater range of products and services.
“Today’s
savvy travelers are looking beyond price as they choose their preferred brands,”
says Ariane Gorin, president of Expedia Partner Solutions.
“To
drive loyalty, travel companies need to look beyond existing solutions like
discounting, vouchers and points schemes. Lasting loyalty will be won by
companies who really tune in to consumer expectations, deliver a diverse
product offering and invest in superior user experiences.”
Personalization
was also cited as an important factor to drive loyalty, and while technology is
making it easier for brands to collect data to understand their customers,
translating that into action can still be a challenge.
“It’s
extremely difficult to take something you know about a traveler and actually
deliver it in the airport, in the air, in the hotel,” says Stuart McDonald,
vice president and general manager of Points.
“It’s
one thing to get a piece of information that a traveler really likes a certain
type of pillow, it’s another to make sure when they arrive that pillow is in
their room.”
The survey also found there
is a lack of consensus across the industry on how to measure loyalty. The
tactic receiving the most selection is social sentiment (61%), but just behind
are loyalty program membership and repeat purchase rates. Only 19% of
respondents are using all six tactics for a comprehensive analysis of loyalty.
Online travel agencies are
relatively new to the loyalty program space. So while 91% of OTA respondents
report having a program – the same as in the airline sector - only 9% have at
least half of their users signed up as members; and nearly two-thirds (59%)
report their program has signed up less than a quarter of their customers.
“We have to get more sophisticated in how we drive
loyalty,” says Jacob Miller, Expedia Group’s senior director of global loyalty
and customer retention.
“At Expedia Group, we are learning more about customers
and more about how to maximize their value both to us and to themselves. To be
forthright, we have a lot of work to do. It comes down to knowing our customers
and understanding what needs to be communicated to them at what time, to be
valuable to them.”