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

by Ted Wham  |  
May 2, 2013

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:

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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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