Deconstruct any travel loyalty programme and you will see one purpose at its heart: reward repeated transactions to drive long-term brand interactions. It’s a tried-and-tested formula that has worked for decades, resulting in a plethora of loyalty programmes that many of us know and love to hate; but strip away the glitzy façades and tiered membership levels, and they all start to look the same underneath.
The problem for many brands today, however, is that these programmes simply aren’t working. And you can blame the extended economic downturn for that. Not because consumers travel less, but rather their view of value has evolved. So instead of being viewed as an attractive bonus for remaining loyal, programmes are now scrutinized for their true value in dollars and cents. And in a climate where disposable incomes are suffering and many consumers seek more value for each dollar spent on leisure, creating programmes that offer real and relevant benefits to the market is becoming crucial for travel industry success.
The lack of transparency and the various restrictions on loyalty programmes have for a long time proven frustrating for many travellers, but some companies are now responding with the removal of blackout dates, and with some airlines, like Singapore Airlines, even allowing consumers to trade points for partial payment of airline tickets.
It has also taken the travel industry far too long to understand the power of the connected masses. While brands have paid lip service to the likes of Facebook and Twitter, interactions have been very one-way and informational, and have failed to deliver any sort of value. Consumers are increasingly making decisions based on interactions on social media networks, which means they know the brand and their schemes and programmes intimately before the brand gets a chance to know them. This makes hearsay more powerful than your own say, and if you are not engaging with consumers you may easily be blindsided by rival marketing efforts.
Four ingredients for driving loyalty
The answer to renewed success lies in rethinking travel loyalty programme fundamentals. Regardless of how you fashion it, loyalty programmes need to be built on four major components:
1. Relevance: Modern marketing is built on customisation and relevance, which in turn drives engagement and return on investment. That means brands need to offer rewards that customers need or want. It all begins with a thorough understanding of consumer motivations that go beyond transaction history and behaviours. Just because I flew to a particular destination or happened to stay in a particular hotel one month ago does not mean that the same activities interest me now.
2. Readiness: Travel brands must stop trying to pigeonhole consumers according to expected behaviours. Their interests are being constantly influenced by the world around them, with social media central to this. It is key to understand the difference between affinity and intent – timing is critical. Affinity always outlasts intent.
3. Authenticity: Loyalty programmes and their perks will always be compared and contrasted around the world. Instead of marketing the perks, brands must market the experience that they promise. Demonstrating integrity in how you message and portray the loyalty offering behind your brand promise is crucial. Do not say one thing and do another.
4. Consistency: Consumers use a variety of channels to research brands and loyalty programmes, and as such consistency of message across all mediums of communication is a must—and not only to consumers but also to their own staff. For example, email or social offers should be visible to reservation agents or front of house staff so they can respond to questions or issues that may arise. Nothing frustrates consumers more than when they know more about what a brand is offering than its own employees.
Lessons from others
Clearly there is no one size that fits all for loyalty. This is especially true for travel programmes where consumers demand to be recognised as individuals, and not as a part of the masses. Here are two companies that rethought, refined and remade their loyalty programmes to stick.
Starwood Hotels & Resorts: Integration of small rewards to beef up guest experience
The resort chain wanted to know how to cater to their guests who drive the most revenues. With a little data mining, it unearthed the details of 2 per cent of its guests, who collectively drove 30 per cent of its profits. The hotel chain then launched a personal ambassador service to cater the needs and desires of these revenue-generating customers. The result: A double-digit jump in share from the test group compared to a control group, enough to roll it out across the top tier of its Starwood Preferred Guest loyalty programme in February 2012.
British Airways: Use insights from both online and offline data to surpass consumer service experience
The international airline giant wanted its first-class passengers to bask in unrivalled service. So it launched the “Know Me” programme that armed all first-class flight attendants with iPads. These allowed the attendants to scan the passenger list and search photos online to greet passengers by name as they boarded, while adding useful “extras” such as the customer’s favourite drink or other flight preferences, to make their experience truly personal. The programme also allowed any issues the customers faced to be jotted down, so that the next attendant from a different flight can acknowledge the issue and thank them for their continued business. A simple touch creates immediate satisfaction and loyalty.
The days of “good enough” loyalty programmes are long gone. As consumers look to reap the most value out of their brand relationships, loyalty programmes are at the forefront of a brand’s success. Building a successful programme that stands out from the crowd requires a brand to be relevant, ready, authentic and consistent.
Consumers like convenience, and with travel that is easy to define based on location and need. But to build a relationship that goes beyond price and convenience, a little bit of investment in time and effort to understand the customer can not only build remarkable brand experiences but also lead to life-long relationships. After all, it will be these relationships that will ultimately define tomorrow’s travel industry leaders.
Dominic Powers is executive vice president and managing director, International, with Epsilon