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10 Critical Actions for Enhancing Customer Loyalty: The Case of Travel Companies

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The time has come for air travel and hospitality brands to address an existential threat to the travel industry: Customer loyalty has all but vanished.

Just 14% of air travel customers are loyal to an airline, according to a recently published Deloitte survey. Even more astonishing is the finding that a mere 8% of hospitality customers are loyal to a hotel brand.

The data is sobering for travel suppliers, many of whom pride themselves on customer service, attention to detail, and customer relationships.

Though airlines and hoteliers have collectively invested colossal sums to build loyalty programs, the reality is that those programs have largely created repeat purchase, not true loyalty. Such "purchased affinity" can drive additional purchases from customers, but it does little to drive true evangelism—the bedrock of highly successful brands.

Deloitte's findings on abysmally low loyalty rates for airlines and hotels point to just one conclusion: Current marketing programs are simply insufficient.

Today's travel customer is tech-savvy, deal-seeking, and wary of the revenue management model that leaves customers whipsawed as prices change. The end result is travel consumers who are deeply distrustful that they are getting the best deal available. With so many sources of information and travel providers to choose from, consumers are more inclined than ever to look for bargains.

But travel marketers need not despair. The opportunity exists for brands to enhance customer loyalty. By understanding and addressing the root causes of customer loyalty erosion, focusing on the customer experience from start to finish, and getting creative and personal with loyalty rewards, travel brands can win back loyal customers.

Here are 10 critical steps for building long-term customers relationships and inspiring customer loyalty:

1. Analyze Weaknesses

Every travel brand works hard to please its customers. But that doesn't mean there isn't room for improvement. Travel brands must make it a priority to diagnose and understand the causes for low loyalty rates. Among common problems:

  • Lack of end-to-end ownership for the sales through product delivery experience
  • Revenue-managed variable pricing systems that leave consumers feeling that they did not get the best price
  • Pricing models that punish consumers for even trivial use of services

2. Listen to the Customers

Identify key customer needs for product and communication. Travel brands must determine what customers want to buy from them and how they want to hear about it, both prior to purchase and during the travel consumption window.

3. Data, Data, and More Data

Data is the key for travel brands that are hoping to understand their customers. Brands must capture and apply data about who their customers are and what they are doing, both within their businesses and in the wider Internet ecosystem.

Brands must tailor their offers to customer interests and needs. And brands must be sure to address in-market customers with content and pricing that is specific to the customer's travel need at hand.

4. The Right Information at the Right Time

Integrate real-time, dated price and inventory technologies into the marketing channels. Indeed, the travel marketer should be deeply suspicious of any retargeting or cross-sell process that is overly reliant on batch processes, which tend to exacerbate the occurrence of customer-facing price fluctuations that are inherent in a revenue-managed environment.

5. Keep the Customer in the Loop

Everyone knows that travel plans are subject to unexpected changes, but nobody likes surprises. Travel brands must be prepared to keep the customer in the loop on any changes to their itinerary. They must enable real-time data instrumentation that allows for communication to the customer based on events as they occur.

6. Get With the Times

Travel brands must embrace emerging channels that customers are demanding: mobile-optimized websites, mobile applications, social marketing channels (particularly Facebook and Twitter), and display ad retargeting.

7. Tie-in Complimentary Services and Useful Information

When people travel, they often appreciate consolidating the booking of things like airport shuttles, tours, or rental cars in one place. But they also appreciate recommendations on compelling events, venues, restaurants, hikes, beaches, etc.

Brands must market to specific customer needs and interests during the "golden selling window" from initial product search to the completion of the travel event.

8. Customer Service Is King

Recognize and support customer needs during the travel window. Even though the sale was made weeks previously, the period approaching the actual travel consumption is the most important time to the consumer. And that's when brands have the opportunity to impress the customer with excellent service and customer support, including making amends with customers when things don't go according to the plan.

9. Be Creative

The loyalty programs of many travel brands look alike. Many also require multiple purchases before the customer receives any rewards.

Travel brands need to get creative to surprise and delight customers. Brands must do things such as offering unexpected rewards and amenities, remembering customers' birthdays, and running sweepstakes for free flights or accommodations.

10. Solicit Feedback

When the trip is complete, close the loop and follow up with the customer: "How did we do?" or "Is there anything else we should have done or can do for you?" Such messages show interest in the consumer that eclipses interest in the travel suppliers' bottom line.

* * *

The airline and hotel industries continue to be challenged in their ability to foster true customer loyalty—let alone evangelism. And it's easy to understand why that's so: Travel marketing has specific constraints that don't exist in most other industries.

But travel marketers do have available to them many tools and marketing approaches that are simply out of the reach of many of their non-travel colleagues. By focusing on what is in under the control of the supplier, and mating that to the true needs of their traveling customers, brands can meaningfully improve customer loyalty in the airline and hotel marketplace.

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Ted Wham is vice-president of travel industry solutions at Responsys, a provider of email and cross-channel marketing solutions.

LinkedIn: Ted Wham

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  • by Jay Rosenberg Thu May 2, 2013 via web

    Nice post, Ted.

    We tell people that if they want to discover the prospects' true pain and get a much deeper underestanding "get out of the building." Get up, get out and go speak with your prospects and customers. Go to airports, hotel lobbies, the street and ask them.

    Create hypotheses (business school for guesses) about what you think they want and ask them. You will be dead wrong at first. Sure it's always about the money, or is it? Each time you are wrong you are making progress.

    When wrong, we say "pivot." Think up more assumptions and go back to the streets. Do this several times and you will see a thread emerge. Take all this learning and try it. Your goal is to create what we call a MVP (minimum viable product). This is the product/serive that your interviewees help you build.

    Then iterate: Do it again. Get out of the building and learn more. Send the kids from the office as well as Mr. and Ms. Marketing Experts to get real insight. The public will love it. After the interviews, surprise them with a T-shirt. Do not ask family and friends; they don't count.

    If you play to win, this is what you do. This is stealth marketing. You will uncover a mother lode of intelligence. And it works.

  • by Gracious Store Fri May 3, 2013 via web

    Customer loyalty used to be the priority of every brand, but unfortunately many brands have lost that spirit and are focused simply on how on maximizing their profit at the expense of their customers

  • by Bob Gilbert Tue May 7, 2013 via web

    I believe the reason that hotel loyalty programs have fleeting loyalty is partly due to the reliance many hotels have placed on OTA's (Expedia, Priceline, Travelocity etc.) and have spent too much time building OTA brands and less on proactively engaging with the customer. Hotels should own the customer, not an OTA.

  • by Scott Bell Thu Aug 29, 2013 via web

    People relate to brands and develop emotional connections/loyalty based on their ongoing interactions. And people/consumers don’t put their faith in any single channel - they put their faith in HIGH QUALITY human interactions. Today’s informed and demanding consumer interacts with brands quite differently than yesterday. Customer expectations are hyper-contextualized: “What I want, when I want and how I want it.” For this reason, we are more relevant than ever as a contact center fulfillment service company. Where there is a HUGE disconnect (and we all know this as consumers) is when companies make the mistake of believing contact centers are COST CENTERS. Many leading travel companies that subscribe to this idea have chosen to offshore their calls. This is perhaps the ultimate customer experience strategy gaffe in the context of loyalty. The clear message that is sent to customers that are perhaps trying to be loyal is “We care about you - but not very much”.

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