Travel industry needs to re-ignite customer loyalty
Collinson Latitude has published a new call on the travel industry to more actively embrace evolving technologies to help reignite flagging travel-related loyalty programmes around the world.
The company reports that travel industry loyalty and reward programmes have seen a 31% decline in active participation since 2007, with only one third of programme members regularly redeeming their travel loyalty currency, on average.
The company's trend report, entitled 'Making your loyalty currency irresistibly valuable everyday', warns that airlines and hotels now need to differentiate their programmes from competitors by providing more engaging loyalty programmes that offer ever-more relevant every-day rewards.
According to Janet Titterton, director for Collinson Latitude, "Hotels and airlines need to encourage more frequent interactions by offering rewards and benefits that are obtainable for every customer, not just the more frequent flyers or business travellers with high levels of loyalty currency. The elite customers are always going to be important, but focusing on them to the exclusion of others reduces the gain that could be achieved from a wider base."
As forward-thinking airlines and hotel chains have already discovered, by including cash plus points purchases (where the customer makes up the difference in cash) as part of their redemption process, they can broaden their offering to appeal to more members, including those who have earned lower levels points.
With an ever-rising number of retail partners signed up to web shopping portals, members are increasingly able to use their loyalty points and airline miles for everyday items, from kettles and toasters through to one-of-a-kind experiences and even digital media downloads. If the redemption offering is broad enough and appealing enough, members will naturally be more inclined to redeem their loyalty currency, which results in greater and more regular brand engagement.
The report also cites emerging technologies as a key area in which customer engagement could be improved throughout the travel loyalty industry. With new technologies ranging from automated communications (e.g. confirmation emails after every purchase) to pending transaction communications (e.g. containing personal and targeted brand messaging) new technologies can provide a wide range of opportunities.
"There is significant scope for both hotels and airlines to be much more innovative with evolving technologies. The best loyalty platforms need to fit with clients' existing platforms whilst also being able to respond to - and grow with - further technological advances," explained Titterton.
The widespread adoption of smartphones, tablets and mobile purchasing - also known as m-commerce - opens up new opportunities for tailored communications from travel loyalty programme operators, especially when members are on the move. Although this is still in its infancy, the use of personal data to drive targeted up-sell and cross-sell when people are travelling is increasing.
The Amazon.com model, for example, has demonstrated that consumers respond exceptionally well to tailored product recommendations. The 'Other people who bought this product also viewed these items ' mechanism is a simple but powerful one, and emerging technologies could help travel operators such as airlines and hotels to employ similar tactics.
"In the long-term, the adoption of new technologies could greatly increase redemption and boost revenue for travel loyalty companies. This is especially important when companies consider the wider implications of the IFRIC 13 standards," concluded Titterton. "Now that programme owners can no longer write off unspent currency, and must account for all currency in the market on their balance sheets, it is in their best interests to offer broader reward options to increase usage of their loyalty currencies."
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