In our last blog on 2024 travel trends, we touched briefly on the battle for customer loyalty and its importance in the post-pandemic global travel market. In this article we’re going to take a deep dive into the importance of building loyalty into customer experience, and build brand benefits that make repeat business a no-brainer.
Chances are, when most people talk about customer loyalty, they’re probably thinking of the travel sector. For example the term ‘Air Miles’, created in the UK in 1988, is so well-known it’s an example of a brand name that’s used as a generic term, like Hoover or Biro.
The travel industry’s loyalty model was based on high-volume travelers who were almost exclusively answering “business” when asked the reason for their travel. It famously rewarded ‘frequent flyers’ whose regular travel was rewarded with preferential treatment. It was a successful model for decades.
But times have changed. The pandemic wreaked havoc with this model (as it did with so many industries). Travel and tourism lost nearly $4.5 trillion in 2020, partly due to a 61% drop in business travel spending.
While both leisure and business travel are recovering, the world has changed. Business travel is down, and experts say it may never return to pre-pandemic levels. Trends like the mass adoption of virtual meetings and the rise of the digital nomad are replacing the road warrior and the business-as-usual client meetings.
In this article we’ll be looking in detail at the need to build and optimize a loyalty program, but we’ll begin with a broader look at how brands can foster loyalty across their customer experience,.
Make sure you meet their expectations
More than anything else, more than price or perceived value, travelers value brands that can deliver consistently reliable experiences.
After the last few years – and even now with continued disruptions, cancellations and labor disputes impacting travel plans – customer loyalty will be earned and kept by delivering certainty that expectations will be met (and maybe exceeded).
This need for reassurance has only intensified over the last few years, and as the global travel market has been jump-started back to life in the face of vast pent-up demand, customers have a new-found appreciation for being able to travel.
We all know that our holidays are precious, and we want to know that the travel brands we’ve booked with know that too. Customers want – they expect – travel brands to appreciate their business, along with their responsibility to deliver a friction-free travel experience.
Building loyalty through customer experience
A positive travel experience, from pre-trip to post-trip, can significantly impact customer satisfaction. Benefits that make a customer feel how much a brand appreciates them, rather than be told it in an email, are one way to cement loyalty. What might that look like?
Building loyalty can start early in the customer journey with streamlined and user-friendly customer onboarding and trip management. Even the way travel is paid for, with the offer of interest-free installment payment plans when booking, locking in bookings while helping the consumer’s budget.
Leveraging digital-first tools helps to maintain a close and seamless connection with guests throughout their stay is key. This could be a hotel app for guests to use to check-in, or open their rooms, operate room climate control, request services, communicate with concierges or schedule housekeeping services.
These kinds of tools can also help them to plan return visits through personalized upsell and cross-sell options. In our next article we’ll look in more detail at how personalization is just one of several technology trends that’s transforming travel.
The most direct, impactful way to build loyalty is, of course, through brilliant customer service that provides great customer interaction across all touchpoints – even when things go wrong. The customer whose long-awaited holiday your call center agent smoothly saves from unexpected disaster, is a customer who will never forget your brand.
Why loyalty programs are big business
While the travel market might have changed, loyalty programs are well established across the travel and hospitality industry. That also has meant that loyalty programs haven’t always been re-visited and re-focused as often as they should have.
At Concentrix + Webhelp we surveyed more than 500 leaders in the travel, tourism, and hospitality industries. The survey revealed their popularity (8 in 10 travel and hospitality marketers say their organization has a loyalty program) and durability (6.5yrs is the average tenure of loyalty programs) but almost 4 in 10 travel and hospitality companies have not refreshed their loyalty programs since the start of the pandemic.
Our survey showed how the travel market can be roughly split into three groups depending on the maturity, ambition and sophistication of their loyalty programs: Leaders, Opportunists and Learners. Leaders made up the majority of the 500+ in our survey. These brands typically have programmatic, focused and well-funded loyalty and membership efforts that sit at the core of the business.
These loyalty leaders understand that their loyalty programs are big business. A recent appraisal valued AAdvantage, American Airlines’ passenger loyalty program at between $19.5 billion and $31.5 billion, significantly higher than the $6 billion valuation of American Airlines itself.
Our survey revealed that today, loyalty programs are about much more than just ‘perks for points’. Targeting business and leisure travelers, leading travel companies know that consumers are much more comfortable with digital since the pandemic, and their expectations are that much higher. You can register to download the full report here.
So what are travelers looking for in their customer journeys when traveling? At Concentrix + Webhelp we work with some of the world’s leading travel brands and we understand the challenges they face every day to meet (and exceed) their customers’ expectations.
Don’t make them wait too long.
One of the side effects of the reshaping of travel post-pandemic is that leisure travelers have different expectations. Whereas a road (or air) warrior would be happier to allow points to accrue over longer time periods, leisure travelers expect travel brands to reward them more often and more tangibly, echoing the right-now rewards offered by plenty of digital brands since lockdown forced a major rethink of their mobile offers.
It’s also because leisure travelers might only make one or two big trips per year, so don’t have time to waste waiting for points to build up. They are more likely to shop around with Online Travel Agents (OTAs) too than book with the same work-approved operator used for business travel, so might not see the value in banking points with a brand they are yet to build a relationship with.
Travelers want to live in the moment
As a consequence, travelers want to know what they can do now with the points they earn. Loyalty programs which let you unlock rewards sooner rather than later are welcomed. Large aggregator brands like booking.com even offer immediate cash-back schemes, allowing travelers to see what they have earned in real-time.
Leisure travelers who may not build up huge banks of points will also favor travel companies whose loyalty programs are flexible enough that different tiers can unlock different levels of rewards, whether it’s using points for drinks in the hotel restaurant or to earn free flights.
Know what your customers want
To build a successful loyalty program means giving travelers choice and flexibility over how they can spend the points they earn, and that means multiple brand partnerships that make sense for your customers. That means truly understanding who your customers are and that means being able to use your customer data in strategic, insightful ways. After all, how can you exceed your customers’ expectations… if you don’t know what they are?
Understanding your travelers’ needs is what will get the results that loyalty programs are designed to deliver. But that means putting action-oriented data in the hands of your frontline customer service employees about who your customers are, what they like and what their value is to the brand.
A robust data analytics practice should reveal those customer desires and how to unlock customer satisfaction. Travel, tourism, and hospitality brands have a huge amount of valuable transaction, preference, and profile data with which to build a true 360-degree view of customer behaviors, routines, motivations, and aspirations.
At Concentrix + Webhelp we love to work with travel game-changers and we’d love to hear from you if you want to talk more about how building a world-class loyalty program could impact your business.
