Desktop marketing applications such as Southwest Airlines' DING! software can be more effective than travel loyalty programmes, according to research from online market research firm Compete Inc.
The company's latest Spark! research advisory, 'Is the future of travel loyalty in desktop marketing?', revealed that, in the battle for traveller attention and loyalty, Southwest Airlines' new DING! software service has hit the mark with consumers and is driving substantial bookings growth for the airline.
Launched in February 2005, DING! was created as the airline's most direct link with its customers - through their home or office computer desktop. The airline can use the software to deliver time-sensitive offers immediately to every participating customer. Customers in turn have been responding well to the characteristic 'ding' sound and flashing signals that are triggered by each new promotion that comes through.
Compete analysed consumers' usage of the DING! marketing application from February 2005 until October 2005, and monitored the flight booking behaviour of consumers who downloaded the application compared to other visitors to the airline's web site. The analysis also tracked consumers' usage of rewards programmes at hotel supplier web sites, including Intercontinental Hotels Group, Marriott, Hilton Hotels, Starwood Hotels, Carlson Hotels and Wyndham hotels, and benchmarked their travel shopping behaviour against non-rewards users.
Encouraging results
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The company's research found that DING! has had a positive impact on consumer behaviour. Results of the research include:
- Since launching the application in February 2005, over 900,000 consumers have downloaded DING!. At the current rate of adoption, there will have been more than 1 million downloads by the end of 2005.
- DING! users are 45% more likely to book with Southwest and, at current usage levels, the incremental bookings driven by the application are estimated to be over US$60 million per year.
- Compared to two years ago, the average online travel prospect now engages in 27% more cross-shopping activity, due mainly to the ease of comparing prices and amenities online.
Gregory Saks, senior associate for Compete, said: "Travel suppliers have traditionally turned to rewards programmes to create and maintain loyalty. Yet today, with nearly every brand offering its own programme, and consumers seeing less differentiation, marketers must look beyond plain rewards to maintain strong customer relationships."
Lodging rewards surprise
Compete's parallel analysis of loyalty programmes in the lodging sector found that the travel shopping behaviour of hotel rewards programme users are nearly identical to non-users. Rewards programme members evaluate an average of 5.9 supplier or agency web sites - slightly less than the average of 6.3 web sites considered by non-members. Surprisingly, some programmes were found to have no effect on consumer behaviour.
Saks warns: "Travel marketers who are 'on the fence' about deploying this type of programme must realise that a race to establish desktop relationships has already begun. There is a limited amount of real estate that consumers will be willing to give up on their desktops."
The research advisory can be found on Compete's web site - click here.
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