7 ways travel brands can build customer loyalty

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By: Wise Marketer Staff |

Posted on October 14, 2013

Despite the travel industry being a technological pioneer (having created the 'Global Distribution System' - a precursor to the internet), and 83% of leisure travellers using the internet to plan their trips, the sector has fallen behind others such as retail, according to a white paper from Maxymiser which highlights a number of ways in which the loyal traveller's heart and mind can be re-won.

From the creation of mobile sites to personalisation, social media to video, few travel companies are yet exploiting new technologies to their maximum benefit, whether to improve the customer experience or drive up revenues. In fact, research by eDigital noted that travel companies consistently score lower than retail organisations, which deliver both a better mobile app and web site experience.

This lack of investment and innovation is in direct contrast to customer attitudes toward the use of the online channel for travel-related research and purchases. Ten years ago, only one in three UK internet users had made a holiday or travel booking online, and many were not comfortable with online as a purchasing channel. Now 80% of travel products in the UK are researched or purchased online - the highest figure for any country in the world - according to the European Travel Commission.

With travel marketers needing to step up to the next level, Maxymiser compiled its list of key opportunities for the travel industry to not only improve the customer experience, but to increase ancillary sales, boost conversion rates, and drive up average booking values per customer:

  1. Customer Experience
    Customer attitudes are changing. Whilst in 2011/2012 the focus was strongly on price, this has changed, in parallel with the way in which customers behave online. An individual today will typically take nine different sessions researching a holiday before booking, according to Google's The Five Stages of Travel study. Whereas previously that research would have been undertaken across multiple websites to achieve the lowest cost, now, according to PhocusWright, the trend is toward using fewer sites and favourite brands, with the determining factor being ease of use.

    In addition, the way individuals even consider travel is changing. According to Dr Miguel Moital of the School of Tourism, Bournemouth University, ten years ago there were three distinct stages to travel: pre-trip, during trip, and post-trip. The rise of social media has created a new stage: the dream stage, which happens every time someone sees holiday photographs uploaded on to a social networking site or reads a friend's travel-related update. Social media is stimulating people to constantly and consistently dream about travel, even when they haven't made any travel plans.

    It is therefore not realistic to expect a one-size-fits-all website to deliver the ease of use and good experience customers now demand. Organisations need to consider where a customer is in the travel process; whether the customer has visited the site before; or is a repeat traveller. Is the customer only interested in leisure? Or leisure and business? A single website cannot appeal to every visitor, every time.

    Optimization of the content and processes presented to the customer across every channel through which they interact with you is an essential tool in the creation of the best customer experience and ensuring each interaction reflects an individual's stage in the travel process. Companies need to test the response to different content, and different user journeys, including the booking funnel, and adopt a culture of data-driven decision making to present the most effective content and experience.

    Price transparency is a key example. Under the latest UK Office of Fair Trading guidelines, all travel companies must adhere to guidelines for pricing and display. However, testing the timing and positioning of information on pricing reveals a measurable impact on conversion rates. For example, when fees and admin charges are made clear, customers sway more toward debit card fee free options. The challenge for the industry is to ensure adherence to the guidelines and meet consumer demands for trusted information whilst also assessing how best to display pricing and determining the value of multiple payment options.

    The key is to have a flexible way of presenting both content and experience to reflect customer drivers in a very fluid marketplace. It is the ability to test and prove the value of content and experience that is key to driving lifetime customer value.

  2. Ancillary Sales
    Facing increasing competition, pressure on price and low margins, the role of the ancillary product sale has become increasingly important. With the typical travel company's target to increase ancillary sales by up to 10% per annum, the challenge is to determine when best in the journey to make the ancillary offer and ensure the offers are the most relevant to each customer or customer group.

    Testing the timing and description of the offer - such as priority boarding or extra baggage - is key in maximizing the additional sales tally. For example, a ferry company's usage of video displaying cabin sizes has proved beneficial in encouraging customers to opt for the larger - and more expensive - option.

    This process is highlighting the need for a more personal approach. The ability to personalise the ancillary offer - even at the most basic level between business and leisure customers - can deliver a measurable uplift.

  3. Personalisation
    As demonstrated by the statistics above, it is now essential to understand where individuals are within the travel process. Over 83% of leisure travellers and 76% of business travellers plan online, according to data from Google and Ipsos MediaCT. However, growing numbers also brainstormed or started thinking about a trip; read reviews from other travellers; requested more information related to an upcoming trip; watched a travel video or looked at travel content or reviews by family or friends.

    Personalising the experience, therefore, is going to become increasingly important to meet this variety of online activity and reflect the diverse needs of the customer. Certainly ancillary sales is a key area where personalisation can pay off by ensuring the right offer is presented to the right person at the right time. For example, offering a business customer a premium lounge pass, or a family the chance to book into a kid's club at the hotel in advance at the right point in the booking process significantly increases the chance of additional sales.

    Personalisation also needs to address the entire customer experience - from the first time an individual arrives on site, throughout the journey, which is likely to span multiple visits. And it needs to reflect the way individuals consider, research and book travel. For example - don't expect the customer to book at the first visit when the statistics above clearly show that individuals make multiple visits before making the final decision.

    Content should reflect where the individual is on the dream, research, plan, book and pre-trip experience and present information based on previous visits, searches or holidays. Indeed, it is important to remember that the opportunity does not end once the holiday or travel event has been booked. Customers often return to the site between booking and travel to check information and presenting relevant content at this time can both improve the experience, boosting brand loyalty, and add ancillary sales, such as excursions, as well as partner sales such as insurance or car hire.

  4. Relevant Experience
    Companies can also think about personalisation in a new way. It is not just about the type of person or improving segmentation. It is about understanding the search behaviour and personalising the search experience. For example, one of the biggest causes of customer dissatisfaction - and site abandonment - is a 'no availability' response to a search enquiry.

    However, companies have the chance to personalise the result based on the visitor's search. For example, if an individual has searched for two adults and two children at an adult-only hotel, the response will always be no availability. By adding to this an explanatory line that the venue is adults only and offering a number of family friendly hotels nearby, the visitor experience is fundamentally transformed.

    A similar approach can be adopted for air travel: rather than presenting no availability on a route that is not provided - London City to Geneva, for example - the company can offer relevant alternatives for that date, such as flights from Heathrow, Gatwick or Stansted. This approach is proven to reduce abandonments and improve the overall customer response to the brand.

  5. Ratings & Review
    The importance of ratings and reviews has been understood by travel companies since the earliest guides were published. However, many travel companies are still unsure about the way online reviews and ratings should be used.

    A recent PhocusWright study with TripAdvisor reveals that nine out of ten users agree that TripAdvisor hotel reviews help them feel more confident about the decision to book a hotel. Indeed, over half (53%) of respondents would not book hotel without reviews. And the impact on value is significant: if a hotel enhances review score by just one point on TripAdvisor it can increase rates (prices) by 11.2% while maintaining the same occupancy or market share.

    While sites using reviews do tend to perform better - a study from L2 showed that travel sites that incorporated user reviews increased traffic by 24% compared to 7% growth for sites with no reviews content - the challenge is how best to present reviews and ratings information on the website. The reviews need to be trusted, preferably independent - and increasingly, tied into social media. As customer attitudes toward reviews continue to evolve it is essential to analyse how reviews affect online behaviour, from booking abandonment to conversion, to assess how best and when to use this additional content within the overall customer journey. Organisations need to determine where best to place the review content on the site; as well as track the impact of both star ratings, where appropriate, and reviews. Continually assessing the role of on-site reviews versus links to external sites, such as TripAdvisor, is also important as customer attitudes to review information continue to evolve.

  6. Social Experience
    There is a clear and growing trend away from the generic review toward the experience of friends and family - customers increasingly prefer the wisdom of friends over the wisdom of the crowd. A Forbes study of Facebook users discovered that more than 50% of respondents indicated that seeing a friend's holiday photos inspired them to book a trip to that place.

    According to Google & Ipsos OTX Media CT, one in four travellers have used social networking sites to plan their travel, while 45% have made travel plans based on reviews and experiences of others. This is true of both leisure and business travel. The survey also revealed that 1/3 of respondents changed hotel preference after checking in with social media according to a survey by World Travel Market in the UK.

    The industry is certainly embracing social media - with four of the top 20 brands using Twitter for customer support being travel brands; likewise five of the top 20 Facebook brands are in the travel sector. However, while travel companies scored well on Response Rate and Response Time KPIs, they were below average for Engagement Rate, however, indicating that they are behaving in a reactive way rather than starting conversations.

    The growing influence of social media has also raised the awareness of the value of better imagery, including 360 degree views and video, on the customer experience - including both the professional images created to demonstrate the cabin size or hotel facilities and user generated images. This is a new area for most companies, therefore rigorous testing of content and user response is going to be critical to assess how best to combine the additional information delivered via reviews and videos and where in the overall experience - from dream to purchase - it is best presented.

  7. Mobile
    Another essential area of development for the travel industry is mobile. Not only has mobile browsing more than doubled in the past 12 months, but the use of tablet devices to access travel sites is expected to increase 180% in 12 months, according to Google's '2012 Traveler Study'.

    Indeed, 19% of all travel queries in 2012 came from a mobile device according to GPMD's '2012 Mobile Internet Usage Statistics', up 11% from the previous year and two thirds of tablet owners made a travel purchase on their device in the first half of 2012 according to PhocusWright. Most importantly, the mobile user has evolved from researching to purchasing: almost half of all travel searches on a mobile device result in a purchase according to Nielsen.

    Yet the mobile experience remains inconsistent: over one third of customers (36%) now say that a mobile site that is hard to navigate or see on a mobile device is a deterrent to purchasing according to Google.

    This rapid evolution in consumer behaviour underlines the need to deliver a good mobile experience. Companies must provide far more than a scaled down version of the desktop, including bigger links and fields to enable ease of use and ensuring imagery, including video, works via a mobile. Understanding the way customers are using different devices and responding to mobile content is now essential.

    Some organisations still assume that customers don't want to pay via the mobile. Yet when the online rate is significantly lower than the pay on arrival rate, preventing a customer from completing the purchase via mobile is a risky strategy. Rather than second guessing customer behaviour, a data-driven approach is far more effective. Testing the customer reaction to the online experience is critical - especially given the rapid changes in mobile behaviour. This is not a "set-it and forget-it" strategy - as customer attitudes and the quality of the online experience evolve, it is essential to revisit concepts and ideas to assess their on-going relevance to the market.

    Those companies without a dedicated mobile site need to develop one, fast; and those that do have one need to optimize it and not expect a scaled down desktop version will do the job. This is not a side issue: the mobile strategy can and should be run in parallel with desktop optimization programmes.

The global growth in disposable income has created a market where 1.4 billion adults - some 30% of the worldwide population - now has sufficient disposable income to be able to travel abroad, according to the ITB 'World Travel Trends report 2011/2012'. The market potential is huge. Yet this is an industry that is also highly susceptible to outside factors - from heat waves to ash clouds and terrorist events. In addition to the day to day demands of improving revenue and responding to competitor activity, the ability to respond immediately to changes in customer attitudes is essential.

A consumer base now firmly committed to using the online channel to research and book travel - both business and leisure - presents a fantastic way of rapidly addressing unprecedented incidents, addressing new competitive challenges or exploiting unexpected opportunities. The chance to repurpose and personalise content on the fly, to change the customer experience to reflect escalating demand for a specific location, for example, or exploit fluctuating currency rates to up-sell attractively priced rooms, flights or ancillary products is compelling.

As organisations that have used optimization to improve the user experience and ancillary sales can attest, the uplift is significant. Building on existing optimization techniques to improve the user experience, companies can exploit personalisation and embrace mobile and social media to drive additional revenue streams and tap into the extended travel purchasing lifecycle.

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