A white paper outlining the importance of differentiation in the highly competitive and crowded travel loyalty market place has been published by loyalty programme provider ICLP Zurich, using data and statistics from numerous loyalty marketing programmes in the US and Europe to support its conclusions and best practice recommendations.
According to ICLP, the loyalty market has reached a state of maturity in the airline, hotel and car rental industries, with very few such loyalty programmes today being able to claim genuine competitive differentiation.
Simply matching the proposition offered by the competition is not enough to create lasting customer loyalty, the paper explains. When all programmes within a sector are basically the same (e.g. they all have online enrolment, an award chart, a welcome bonus, double miles promotions, and so on), customers tend to react with indifference.
With this in mind, true differentiation is the best way (and arguably the only way) to maintain interest and increase consumer awareness, for the simple reason that customers tend to notice new products and services that stand out from the crowd.
How to differentiate
So how can travel-related loyalty programmes differentiate? To gain that competitive advantage, the marketing teams responsible for the loyalty programme must:
- Use their member data to garner true customer insights (a point stressed in The Wise Marketer's recent article, 'The 30 major factors in the success of customer loyalty' (click here) and in the soon-to-be-published report, The Loyalty Guide Volume II);
- Use all their market know-how to enable better market positioning on a strategic level.
Only by using this knowledge - and using it before the competition does - can a travel sector loyalty programme create a sustainable, differentiated proposition.
Still room in the market
According to ICLP, loyalty schemes cannot afford to stand by and watch new schemes and approaches develop among their competitors. Indeed, along with some methods for measuring differentiation, some best practices, and some future trends, the white paper shows that:
- Despite significant competition in the travel sector, there is still plenty of room for differentiation;
Only part-way Having the "great idea" is just part of the success equation...
Smart positioning and innovative techniques can make the difference between successful differentiation and being "just another travel programme".
There are still many opportunities for travel loyalty programmes to lead the way, but having the "great idea" is just part of the success equation: putting them into action before the competition does (and creating a barrier to entry wherever possible) is what completes the equation.
Details and downloads
The white paper, Differentiating a Travel Sector Loyalty Programme, is available for download (for free, as a PDF document), via The Wise Marketer - click here.
Details of The Loyalty Guide Volume II (due out in May 2006), with downloadable samples, executive summary, table of contents, full-text search, and 'early-bird' discount pricing are available online - click here.