Travel brands must expand their customer retention strategies to go beyond points and rewards systems. Driving long-term loyalty requires rethinking every aspect of the customer journey.
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Customers expect consistent, personalized experiences across all online and offline touchpoints. According to a 2018 survey from Gladly, a customer service technology platform, 54 percent of customers make purchase decisions based on customer service, and 26 percent of customers switch brands after one negative experience.
Travel brands –– especially airlines –– have traditionally courted transactional loyalty through points systems, letting other aspects of customer experience take a back seat. Other industries, like financial services and utility providers, tend to focus on cultivating long-term loyalty through strategies that go beyond points and rewards. Here, we look at four key takeaways from the financial services, utilities, and telecommunications industries that travel marketers can use to better engage their customers for the long-term.
Rethink Your Messaging and Engagement
Making the distinction between customers who are loyal by choice and those who are loyal due to a lack of options is the first step to building long-term relationships. Research by global digital agency Wunderman found that over 50 percent of customers feel more loyal to brands that show a deeper understanding of their priorities and preferences.
When the Dutch energy market was liberalized, customers were able to choose their energy providers for the first time. As competition increased, energy companies began to focus more on the overall customer experience.
Nuon, one of the country’s energy providers, worked with Relay42, a marketing platform for intelligent journey orchestration, to deliver personalized messages and offers based on individual customer motivations. For example, Nuon offered solar energy promotions to those who were already interested in green living. By making an effort to constantly engage its existing customers, Nuon was able to increase its average contract value by 4.2 percent.
How would this look in the travel industry? An airline, for example, should know if a customer frequently flies with the brand because of real loyalty, or because there had no other option. For example, Delta Airlines’ largest hub is Hartsfield–Jackson Atlanta International Airport in Atlanta, Georgia. For many passengers flying out of Atlanta, Delta is their only option. The airline should make these captive passengers feel valued, even if they know that these customers have no choice, and work to convert them into truly loyal customers.
Focus on Using Data Responsibly
Customers are understandably sensitive about who has access to their data and how it is used, especially since many digital platforms have experienced public data breaches. While General Data Protection Regulation (GDPR), the most recent data privacy regulation in the European Union, is new for the travel industry, financial service providers have been complying with complex data protection regulations for a long time. Travel brands can help build trust by partnering with technology providers that have worked with financial service companies and are well-versed in complying with data regulations.
Hailey Shutkowski, product marketing manager at Relay42, said that the Relay42 platform helps brands protect their customer data through built-in functions such as a cookie consent modules and by implementing best practices on data collection and activation, particularly with GDPR compliance. “Clients are always in total control of their customers’ data and retain full ownership of one of their most valuable assets –– and we provide a secure environment that enables that,” explained Shutkowski.
Customer data security, however, is only the first step of using data responsibly. When it comes to using data for marketing activities, “If a brand uses the data to give relevant offers to a customer, it shows that it values his time, which in turn helps to build loyalty,” said Shutkowski.
For travel brands, this means not just incentivizing customers to book or purchase ancillaries, but creating unique experiences that take the small things into account. An airline, for example, can use pre-recorded data on a customer’s meal preferences to ensure that it is confirmed and available onboard, even if the customer forgets to request it.
Connect the Various Elements of the Customer Journey
“Travel brands should have a single, flexible technology platform to provide consistency across all touchpoints,” said Shutkowski. A survey from Forrester found that 69 percent of U.S. adults shop more with retailers that offer consistent customer service, both online and offline.
This singular platform should be able to ingest data from internal and external sources and automate marketing processes. This allows brands to activate data at the right time and serve relevant content to customers. Shutkowski uses the Relay42 platform to explain further, “A customer who typically travels to a snowy destination every winter could be activated with relevant winter offers the following year. The airline can send emails first. If the emails aren’t read, it should activate an alternative communication channel. Orchestration is key to reducing annoyance while staying relevant.”
Noting another major disadvantage of disconnected datasets, Tomas Salfischberger, Relay42’s CEO and co-founder, said, “Travel brands often use multiple customer relationship management systems, loyalty platforms, media buying systems, and so on. If these systems aren’t connected, brands will end up providing disconnected experiences across these different touchpoints.”
Jurrian Elekan, Relay42’s head of industry, said that banks, in particular, know exactly how to connect a customer’s profile across various product offerings, as well as when to activate a product for a customer. “Someone who has just applied for a mortgage would ideally be shown home insurance product options across different channels,” for example.
In the travel industry, being able to integrate multiple data sources can also help brands with service recovery. Through a single platform, an airline company will know when a customer had to spend an hour on the phone to try and change a flight. When the customer finally makes it on board, the airline staff can then correct the course by offering him or her free Wi-Fi or an upgrade.
Use AI and Analytics to Go Beyond Static Personalization
Travelers expect brands to recognize them and engage with them in real time. However, according to data from CMO Council, only 7 percent of marketers are able to achieve this. The brands that go beyond static personalization and provide real-time support are the ones that succeed in building long-lasting relationships with their customers.
Travel brands can take cues from providers in the financial services and utilities industries on how to use artificial intelligence (AI) and analytics to engage customers. Since most customers only contact their energy or insurance providers when they have a complaint, the opportunities to engage are limited. By deploying AI models, these companies draw insights from previous customer behavior to make the most of each interaction.
AI models tend to be most effective when they’re implemented to drive specific business benefits. Salfischberger illustrated this point with an example of a Relay42 telecommunication client. “This client uses AI to identify customers who have slower Wi-Fi speeds than usual. It then offers solutions to customers on how they can improve the speed. Analytics are used to decide which type of recommendation –– such as a do-it-yourself solution or an offer for a signal booster –– will elicit a favorable response from different customers. Custom journeys are created for each subscriber.”
In the travel industry, AI and analytics can be used to understand what drives profits and then optimize those functions to increase efficiency. Both Delta Airlines, a legacy carrier, and RyanAir, a budget airline, essentially offer the same product: a seat in an aircraft. It’s the experience around the product that differentiates them. “We use deep learning algorithms to identify which initiatives will impact on the bottom line the most. We then use specific AI models to deploy initiatives that will shape customer experience and deliver tangible results for the business and the customer,” said Salfischberger.
Kevin Duijndam, program manager, personalization, at KLM Royal Dutch Airlines, explained the importance of being responsive in real time. He said, “We know it’s essential to be flexible in adapting to the customer journey. That means not making them come to us, but rather being there when they want to engage –– whether it’s on social media, messaging, voice, our app or site, or third party websites. The Relay42 platform helps us ensure that our marketing communications are always highly relevant to each individual customer and that we are responsive to their real-time needs.”
Loyal customers are usually worth more to a business than new customers, yet companies tend to focus more on customer acquisition while overlooking customer retention. An Invesp report found that 44 percent of companies put greater focus on acquisition, while only 18 percent focus more on retention.
Travel marketers can learn a lot about cultivating long-term loyalty and improving retention through strategies that go beyond points and rewards by looking outside of the travel industry. Customer engagement strategies taken from telecommunication services, utilities, and financial service providers can help significantly boost long-term loyalty in the travel industry, when implemented correctly.
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