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Today, brand loyalty doesn’t start when a traveler joins a rewards program, it starts with a great experience. The key to delivering that great experience is by gathering the right data and using it to gain insights into each traveler’s behavior and preferences. That data can then help unlock a greater share of wallet, and share of travel. But even at a time when travel brands appear to have more guest and traveler data than ever before, it seems as if existing efforts to build stronger loyalty are falling short.
The truth is that traveler demand for a new model of loyalty is more urgent than ever. That’s because today’s traveler has more brand choices and booking options, making it harder for companies to build ongoing relationships. The best proof of this is the declining rate of loyalty engagement among current program members. According to loyalty insights firm Colloquy, the number of memberships in travel and hospitality loyalty programs grew by 20 percent between 2014 and 2016, surpassing more than a billion members. Yet during this same period, more than half (54 percent) of these travel loyalty memberships were inactive, and more than one quarter (28 percent) were abandoned without ever being used.
What should genuine loyalty look like in this era of the “empowered traveler?” And how can brands use what they know to design more meaningful strategies to engage current and potential guests?
The Future of Loyalty Depends on Better Identification of Travelers and Understanding Their Habits
Instead of focusing solely on offering “transactional” loyalty that rewards bookers with points or miles for their purchases, today’s travel brands need to get smarter in how they use traveler data to deliver more personalized experiences. The value of this type of personalization to travelers is clear. According to a 2017 survey from Epsilon, 87 percent of respondents said they were much or somewhat more likely to do business with a travel website or app that offered a personalized experience.
Best of all, this type of personalization-driven loyalty has a strong history in the travel industry where real-world, one-to-one hospitality experiences have long been the norm. “The pinnacle of personalization is one-to-one,” said Shannon Balliet, VP of Marketing Analytics at Norwegian Cruise Line Holdings. “Understanding the customer, understanding their wants and needs and desires and playing to that in the marketing so you can really build an intimate relationship.”
To do this, travel marketers should aim to accurately identify and collect a combination of “personally identifiable information” (PII) data, which focuses on where and how they engage with travel brands across devices and channels, along with “non-PII” data, which is anonymized insights into their demographics, purchase habits, and website visits. In the travel industry, this type of PII and non-PII data might include macro-level details on bookers’ transactional data, historical booking data, or comprehensive traveler profile data including behavioral and demographic insights, along with website activity.
Implementing this data-driven approach to loyalty has several benefits. No matter the stage of the buyer journey, whether it’s dreaming about a trip, planning it, booking it, traveling, or even returning home, it empowers travel brands to be smarter marketers, using what they know about individual habits and in-the-moment needs to personalize the entire brand experience. In addition, this approach also allows them to gain insights into travelers’ bookings with competitive brands, using this information to improve their own engagement. Finally, it makes it easier for travel marketers to ensure they can meet the growing expectations of empowered travelers, who are demanding more seamless, personalized experiences and expect brands to earn their ongoing loyalty by knowing what they want–even before they do.
Building a New Version of Loyalty for Today’s Empowered Traveler
What will this new concept of loyalty look like in practice? A number of case studies from different sectors of the travel industry are starting to emerge.
Looking specifically at the hotel sector, some travel marketers are starting to use the behaviors of past hotel guests to help inform their development of more targeted messages to engage prospective guests. Getting these net-new guests to make a repeat booking is the ultimate test of loyalty. But, unfortunately, travelers today comparison-shop across a variety of hotel brands looking for the best deal, rendering the traditional idea of loyalty all but meaningless.
One solution to this challenge is to gain additional visibility into how travelers book rooms with their competitors, allowing marketers to understand what these consumers truly desire, and then create messages that promote relevant offers.
For instance, Conversant recently used transactional booking data to help a leading hotel brand identify and engage travelers who had booked rooms at competitive hotels across multiple devices. Using this data, the hotel then messaged 6.3 million individuals that had purchased a room from one of their top six competitors. Based on the 49,000 booked transactions made by these individuals, the program drove a .56 percent conversion rate, with a $23.63 return on ad spend. Even more interesting, these so-called “competitive” bookers generated an average order value that was six percent higher than what the hotel had seen from their existing loyalty members.
Another example from the cruise industry highlights how Epsilon leveraged transactional and behavioral data for a major cruise line to acquire new guests and increase ROI. By leveraging multi-sourced transaction data matched to specific individuals, Epsilon used this proprietary data as a spend predictor to identify travelers who were most likely to book a cruise vacation. This data yielded a 2x lift over other available modeled demographic, lifestyle and spend trend data sources and resulted in over $5M in revenue with new guests.
Layering on a comprehensive understanding of the consumer – and targeted, applicable messaging -yields more engagement and results in a better experience for the traveler. Any brand can have a transactional relationship with a traveler. But focusing on transactions alone doesn’t create great experiences. It’s only by building a personal relationship with a traveler over time, and using data to understand their wants and needs, that travel marketers can forge more permanent, loyalty-centric relationships with travelers.