It’s time to skip loyalty and start chasing retention in travel

Travel is a very price-sensitive industry. You could be an airline miles hunter or devoted fan to the hotel chain, but when it comes to the final click, the price is still an extremely important factor in purchasing decisions.

To be honest, I’m not even sure there is such a thing as true “loyalty” for travel brands anymore. It seems Phocuswright is in agreement, with a recent study it conducted for Aviasales that found travel loyalty programs only influence 25% of travelers when it comes to choosing an airline or online travel agency.

There could be various reasons behind this, but generally, it can be chalked up to the fact that most people only travel a few times a year. This means that it is hard for these customers to organically develop any kind of loyalty towards a particular brand or service.

I’ll give you another example. Customer Thermometer, a company focused on customer survey data, reveals that only 2% of respondents have any emotions toward travel brands, while 30% of respondents noted they had preferences in the home appliance sector. That’s a staggering difference.

This problem begins to compound when looking at smartphones, as well. For example, Phocuswright reports that every fourth online purchase (27%) is made using a smartphone. At first glance, this is not a problem, as that means people are using apps to make purchases.

The problem, however, and one that is very serious, is that smartphones have limited space, and if a company like Apple is involuntarily cleaning the limited space on your phone, that could include the removal of less-used apps like those from the travel industry.

This is where loyalty becomes crucial

So, we’ve come to the conclusion that it is very unlikely that just pure attachment to a particular travel brand can enhance traction. That means this is a pivotal time for the industry to rethink the concept of loyalty and the entire customer experience. It is likely that some companies have already started making these important steps.

There are a few ways this can happen. One is to use so-called “super apps” to help maintain relevance. You’ve probably heard of some of these super apps. Grab, the one-stop shop for basically everything in Asia, is a great example.

Past that, even companies like Amazon are doing the same and dipping into the travel industry. They have been trialing a service with Cleartrip that allows users to buy travel tickets in India.

It’s a brilliant move: Your users already know you have a wide variety of products and at this point, so having travel services is honestly not surprising.

The other tactic is rooted in the retail sector. Latvian airline airBaltic has incorporated its loyalty system, called Pins, into almost everything it seems. Not only can users collect and spend pins (points) on flights, but they can also use them on everyday purchases like clothes, home supplies and movie tickets.

Having so many options is a huge way to gain users and, in turn, increase loyalty over time.

Doing it differently

Maybe it is time to take the road less traveled - acquiring loyalty by finding what can best be described as unusual patterns in travel research and booking.

We’ve come to the conclusion that it is very unlikely that just pure attachment to a particular travel brand can enhance traction

Max Kraynov

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So, when you search for tickets, it’s normally a one-click experience, right? You close the app and forget about it until next time you travel.

In this case, the cost of switching to another application is literally zero. Customers have no personal connections to the product within, so leaving the app means nothing to them.

We’ve studied dozens of different activities and analyzed the data in an effort to link the full buyers’ journey - and not just travel. Take music, for example. Our data reveals that one-third of users are looking for tour dates for their favorite artists and accompanying flights as part of the same research session.

Music is something that people think about way more than twice a year, so we’ve added a new feature allowing users to browse tour dates while also giving the ability to look at transportation prices.

Even if you only have a rough idea of your vacation dates, users can get a robust list of related events in Aviasales. That relevancy can come from analyzing users’ media libraries connected to streaming services like Spotify and Apple Music.

Another similar experience is that of football (soccer for those in the United States), and it works in pretty much the same way. This is how an application goes from being a one-shot game and turns it into something personal. It’s no longer an app you need from time to time, it’s a tool you use for a variety of things, while still funneling users towards the main objective: travel.

Yes, I do have my doubts about loyalty in travel. Vague metrics, high competition and the all-important price are all key factors. However, there is at least one performance indicator you can improve on - and that is retention.

You have plenty of tools from your own ecosystem to help with this. So, skip loyalty; chase retention.