Unlocking Customer Lifetime Value

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By: Jeff Zotara - Chief Marketing Officer arrivia |

Posted on April 4, 2024

How Travel Reward & Loyalty Providers Bridge the Consumer-Industry Divide in 2024

While two years seems short, so much has happened worldwide, from labor shortages to record corporate profits, high inflation, and persistently elevated demand for travel across all consumer segments. These macro-trends would influence companies’ approaches to loyalty, travel, and customer retention, but in what ways?

To find out, we polled consumers and loyalty professionals across North America about loyalty trends, consumer preferences and industry challenges. We were interested in understanding how attitudes on both sides have changed since we undertook a similar survey in late 2021 and produced our first Travel Loyalty Outlook Report.

The results reflect an industry whose priorities have shifted away from customer growth and member retention to a focus on profitability via increasing customer lifetime value (from 16% in 2021 to 29% in 2023) and boosting overall program spend (rising from 9% to 11%). 

After a few difficult years, many businesses are leveraging travel rewards to meet their profitability goals. Nearly all the loyalty program respondents we surveyed in 2023 offer travel rewards (up from 65%), while the percentage of programs with travel booking capabilities soared from 61% to 84%. Considering that 80% of consumers plan to take a trip in 2024, this increase in travel reward availability makes good sense. This desire for travel, however, isn’t limitless. 

According to our findings, just over 40% of consumers say that price and value for money have become increasingly important over the last year as the cost of travel products has skyrocketed, with 37% admitting it is the top consideration when planning a trip. There’s clearly an opportunity for travel reward providers to negotiate good deals and savings with suppliers to meet this demand. The question is: Are they? 

Failing Expectations

Not exactly – at least not from the perspective of current loyalty program members. Only 7% of consumers we polled said they turn to their travel loyalty programs to book their trip and just 23% view using their loyalty points as a potential solution to confront the rising cost of travel. In other words, consumers don’t feel they are getting much value from their loyalty programs. 

This is unlikely to come as a total surprise to loyalty providers, one-fifth of whom report that demonstrating the value of their rewards is a significant challenge — a figure that’s remained unchanged since 2021. Though programs used the time between 2020 and 20024 to invest in their technology, evidenced by the uptick in programs with booking capabilities, they haven’t made the same investment in communicating their value proposition. 

That will need to change for programs to achieve their goals, engage their members, and become the go-to for all their travel booking needs. 

Closing the Awareness and Customer Service Gaps 

More than a third of companies with loyalty programs that we surveyed say they struggle with marketing their travel rewards programs. Case in point: nearly all financial services brands we questioned — think banks, credit card companies, and credit unions — offer travel rewards, yet only 49% of consumers say the same. If consumers are unaware of the mere existence of these programs, then these providers have a long road ahead in proving their value proposition. 

The proof is reflected in the numbers. Just 12% of respondents in our survey say they’ve booked an exclusive travel product or service through their loyalty program. While this might reflect inadequate supply, it more likely reflects inadequate marketing of this supply. 

Successfully marketing a loyalty program in 2024 means leaning into personalization to deliver the right content to the right member at the right time. Compared to other travel portals, loyalty programs with travel rewards and booking capabilities are at a distinct advantage because they have a wealth of information about their members and preferences. 

However, it may be asking too many internal marketing departments to dilute their focus away from the core product by also asking them to promote the loyalty program with the same advanced techniques. A loyalty partner who can leverage this data can create hands-off marketing strategies across various touchpoints that communicate relevant value, thereby increasing the likelihood of conversion. 

The same loyalty partner with advanced marketing capabilities might also be able to manage the customer service process, thereby enabling data integration across these two departments. Though only 7% of respondents in our survey consider customer service issues their biggest frustration when booking a trip through their loyalty program, no brand with subpar customer service can ever truly build good customer lifetime value. 

Customers want to feel taken care and opting to outsource the customer experience to a partner that can effectively handle the specialized demands of loyalty program members and provide expert knowledge on the intricacies of points redemption will go a long way in fostering that feeling. 

The Value-Boosting Effect of Flexibility

While consumers may not utilize their loyalty programs to mitigate travel expenses, it doesn't mean they don’t want to; instead, they believe the current value of redeeming their points is not worth it. Nearly half of consumers express a desire for enhanced redemption and earning opportunities. This underscores an area where loyalty providers fall short of meeting member expectations, as 30% of brands recognize the need to improve conversions through easier point accrual and redemption processes.

What’s holding them back? Travel rewards programs often have a static and restrictive points structure, which limits members’ burn opportunities. Introducing a flexible loyalty currency is an elegant way to tackle this issue and boost a program’s real and perceived value. 

A flexible loyalty currency means members can earn and burn rewards across a variety of brands within a single program. For instance, they can earn points every time they book a ride or food delivery with a ride-share service and then redeem them for an upcoming flight or car rental with another company. A flexible currency also allows programs to modify points' value, integrate new savings with existing currencies and fund bonus points or miles through the margin earned on other travel products. Finally, it gives loyalty programs a mechanism to reward members for different activities and create valuable incentives for key membership thresholds. 

Brands should strongly consider their current loyalty platform capabilities and whether they have the technical expertise and established relationships with travel suppliers to effectively integrate a flexible loyalty currency into their existing rewards scheme. And if not, they should seek out a supplier with those connections and the right tech platform to make it happen. Driving engagement through a flexible currency makes sense in our ultra-connected world, where different brands can exist in the same ecosystem via third-party relationships. 

When we look back over the history of loyalty marketing, the current era might very well be viewed as a game-changer for brands in terms of customer engagement, retention, and revenue —if brands can deliver what their customers want. While this has always been the case with loyalty, it’s even more critical now. Why is that? 

Because for the first time, we can zero in and deliver bespoke experiences catering to a customer group and the individual. With that ability, which will only improve with the advent of AI-supported technologies, comes the consumer expectation that brands follow through and provide relevant value at every touchpoint of the journey. Whether brands do or not, and when, will be the difference between them surviving and thriving. 


Jeff Zotara is the Chief Marketing Officer of arriviaa travel technology company that provides travel loyalty, booking and marketing solutions to consumer-facing companies that want to deliver exceptional value to their customers, uncover new revenue streams, and drive growth through exciting travel rewards and member benefits. With more than two decades as a strategic and operational marketing leader, Jeff is focused on driving growth and marketing technology across brands and providing the best member experience at the intersection of travel and tech.