Value drives travel loyalty & engagement

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By: Wise Marketer Staff |

Posted on October 6, 2011

Value drives travel loyalty & engagement

As the travel market becomes increasingly competitive and customer loyalty becomes ever more important, Collinson Latitude suggests that airlines and hotels now need to act quickly or risk losing vital customers.

The company has warned that airlines and hotels specifically need to think more innovatively to improve their customer engagement and retention. According to director Janet Titterton: "There are many rapid, low-cost ways to maintain the loyalty of the customers you hold, but the travel industry has not yet realised the potential of these opportunities. Superior customer service and relevant customer experiences remain key, but you can also increase your customers' engagement with your brand by providing them with value for money or passing back value derived from your brand buying power."

This 'value exchange' is what enables differentiation between travel firms and keeps brands at the 'top of mind' for loyal travellers. A long-term, profitable relationship should then follow, Titterton suggests. The flexibility of travel loyalty programmes is also key to their success. The market is constantly evolving, so airlines and hotels need adaptive strategies to offer programme flexibility that meets changing market dynamics and customer needs.

"Travel companies can apply the best e-commerce thinking to increase the value of their loyalty currency," explained Titterton. "Take, for example. The company is well-known for providing recommendations based on a previous purchase. Such targeting can be matched by airlines and hotels providing multiple redemption offers - tailored to customer behaviour - to provide customers with 'everyday benefit' for their engagement."

In the past, traditional reward programmes have often been expensive to set up and run, so travel companies are now seeking more flexible, sustainable and cost-effective options. Consequently, Collinson Latitude has recently launched a campaign called Latitude Ignite to help advise travel providers on how to best achieve more active, loyal and profitable customers.

From an airline or hotel operator's perspective, improving the quality and consistency of engagement with customers is a priority. Airlines, for example, offer frequent flyer programmes (FFPs) with lifestyle rewards far beyond traditional air travel redemptions. Indeed, even the means of earning miles is no longer limited to air travel, and can be achieved through non-travel-related products and services, increasing the opportunity to earn loyalty currency for everyday behaviour. However, the ability to redeem this currency is often restricted by low availability, demanding that loyalty programmes need to offer customers more choice in how they can realise their rewards.

Airlines are also eager to encourage customers to redeem their miles for financial reasons, because complex accountancy auditing guidelines mean unexpired miles represent deferred revenue, which the airline can only release once the miles are redeemed. Apart from the benefit of building customer relationships, FFP managers then have a strong financial incentive to encourage customers to exploit the full range of redemption opportunities. The end result is that customers enjoy regular benefits across many aspects of their lives while the airline or hotel operator enjoys increased financial gain.

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