Once upon a time, a traveler signed up for your travel loyalty
program. They started giving you more and more of their annual category spend.
They earned points; they understood your brand; and they lived happily ever
after as a loyal travel rewards member.
This travel fairy tale is now about as common as dial-up,
Walkmans and VCRs.
Today, people have more booking options than ever at their
fingertips. And marketers must evolve their strategies to meet customers where
they are.
That’s why it’s time for travel brands to rethink loyalty. Loyalty
has become synonymous with points, freebies and membership discounts. Those
benefits drive massive loyalty sign-ups, but the problem is, those same people
may also be signing up with every one of your competitors.
Here’s an idea: Separate your travel loyalty program from your
understanding of retention and customer lifetime value.
We partnered with
research consultancy Greenberg to understand just how loyal today’s frequent
travelers are.
Spoiler alert: not very.
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Meet the high-value traveler. These travelers have an annual
average of seven airline and nine hotel bookings.
They have high
expectations for travel - only 21% will sacrifice comfort for a lower price.
The
vast majority - 87% - have status with at least one airline or hotel brand. As
frequent travelers, they understand the benefits of rewards programs and have
every reason to be loyal. But those programs only go so far.
Loyalty programs are not even one of the top three
considerations when choosing which brand to book travel with.
Customer
service is the clear priority (60%), followed by an easy-to-use website (55%)
and online reviews (50%). Loyalty programs come in fourth, motivating less
than half of the high-value travelers (46%).
The service you provide, across all touch points, is more
memorable than the points you can offer.
Unpacking loyalty: Feelings vs. actions
Our research uncovered two different
types of loyalty. Attitudinal loyalty is essentially how loyal someone feels.
When asked whether they know which brand they will book with before looking for
travel, attitudinally loyal people say yes. But that doesn’t always
translate into consistent bookings.
That's where behavioral loyalty comes in.
Behavior loyalty is whether or not people act loyal by repeatedly booking with
the same brand.
When we look at both types of loyalty
by industry, we see that loyalty is higher for airlines than hotels.
That may
be due to the more limited choices travelers have for air brands, as many
airports in the U.S. have one hub airline.
Forty percent of high-value travelers
who demonstrate behavioral loyalty for airlines say they primarily book with
the same brand because they have the most flights out of their home airport.
Forty-nine percent of high-value
travelers have attitudinal loyalty for an airline (they feel loyal to one
particular airline), and 53% have behavioral loyalty (they consistently
choose to book with the same brand).
For hotels, only 30% of high-value
travelers express attitudinal loyalty to a hotel, and only 44% demonstrate
behavioral loyalty That’s because attitudinal loyalty does not necessarily
create behavioral loyalty, and vice versa.
The service you provide, across all touchpoints, is more memorable than the points you can offer.
Jenna Hovel
Imagine someone who is a rewards
member of a large hotel chain and has had good experiences staying at its
brands.
This traveler may very well feel loyal to that chain, and regularly
consider them, demonstrating attitudinal loyalty, but they end up acting
disloyal when they find a better fit for their trip with another hotel.
Conversely, another traveler may
perceive very little differentiation between hotel brands and therefore feel no
loyalty, but they may seem to act loyally by frequently staying at the same
hotel.
In that case, their behavioral loyalty seems to come from convenience
rather than brand love.
Maybe that brand has locations near this traveler’s
offices, or maybe it is at the right price point. Whatever the reason may be,
that hotel brand still is not top of mind for them and needs to work to earn
their business each time.
Cultivating loyalty with your best customers
Loyalty is a constant choice, and
marketers must think about earning both types.
Attitudinal loyalty comes down to
what people associate with your brand and how differentiated you are.
Is the
total customer experience - on-site, on the phone, online - so compelling that
people will remember it? Or are you losing customers by not even meeting their
basic expectations, say, for mobile experiences? (See how your mobile experience stacks
up.)
Behavioral loyalty is a matter of
being present, with content tailored to your audience when they need it most,
across channels and devices.
Is your advertising optimized for channel
efficiency or for providing value to your best customers?
Easing common travel pain points helps create much needed differentiation in the industry. It’s how your brand goes from selling travel products to actually improving the experience.
Jenna Hovel
Sands China used
machine learning to segment its audiences and create relevant, personalized
creative for each.
For its high-value travelers with an affinity for live
events and music, the resort delivered ads tailored to their interests and
their intent to travel soon.
Conversely, for its price-sensitive travelers who
were chasing the best deal, Sands showed its best discounts. These efforts
resulted in a 1.5X higher conversation rate and a 2X increase in bookings among
the desirable high-value travelers.
This is just one example of how
marketers can find, win, and retain their best customers throughout the travel
journey.
With digital, there are more opportunities than ever to incorporate
intent signals, audience data, and automation at the heart of your marketing,
as Sands China did.
Loyalty may be low in the industry, but the potential for
accumulating customer lifetime value has never been higher.
Here are three ways travel brands are already working to win
real loyalty with technology and digital marketing.
1. Deliver assistance from the very first touch point
Assistance should start from the very
first sign of intent.
According to the recent travel research that we conducted
with Greenberg, search is the channel these travelers turn to first, so
it’s important that travel marketers surface the right information, at the
right time, across devices.
Having a comprehensive strategy can
pay off with your high-value customers. Allstate organized its customers into
more than 40 different groups and used insights to inform their messaging
tactics.
If a high-value customer who already has auto and home insurance
searched for life insurance, they might be connected to a page describing the
benefits of bundling policies.
This approach paid off: Allstate found
that cross-selling existing customers on
search and YouTube is 4X more cost effective in generating sales than
trying to acquire new customers.
2. Put the traveler in control
As exciting as travel is, the process
comes with a certain amount of uncertainty - will my flight be delayed or even
cancelled?
Will the room look anything like it did in the pictures? What if I
lose my luggage or something valuable?
Not surprisingly, online reviews are
the third-most important consideration for choosing a travel brand.
In the past
six months, 70% of high-value travelers researched the best time to book a
flight online, and 66% used an online service to track a flight. That
reveals how much travelers crave useful, assistive information and assurance.
The ability to choose your seat is
one of the most fundamental parts of the airline experience, but travelers have
no idea where in a hotel they’ll be sleeping.
Hilton changed that, letting Hilton Honors members choose their exact room
ahead of time from its app. Its app now has an over 90% retention rate.
Likewise, Delta knows how stressful
it is to lose your luggage. First, they introduced RFID tags to help airlines
better identify bags, then they went one step further to reassure travelers by
helping them track their bags from check-in to baggage claim.
3. Enable and augment the traveler experience
Easing common travel pain points
helps create much needed differentiation in the industry. It’s how your brand
goes from selling travel products to actually improving the experience.
Nearly 3 in 10 high-value travelers
for hotels say not speaking foreign languages prevents them from traveling
more.
Hostelworld, the No 1. booking platform for hostels worldwide,
wanted to address this barrier with technology.
The company integrated a
translation feature into its app, allowing users to engage in fluid
conversations in up to 43 languages, which turned its app into a truly
assistive travel companion.
The results of Hostelworld’s “Speak the World”
campaign show how relevant this utility was: it saw +259% increase in app
installs at a 300% lower estimated consumer price index.
Taking customer service to the next level
Customer service has always been an
integral part of the travel experience and the creation of loyalty.
The
difference now is that travel brands have countless opportunities to provide
service before, during, and after a trip - and to know what type of service
will be most useful.
These examples show that digital marketing and technology
can help companies exceed customer expectations - and drive both attitudinal
and behavioral loyalty - like never before.