Going abroad on holiday remains a popular annual pastime, with an average 7.3m Britons jetting off to the sun last August alone . Many see this time away as a luxury purchase and, particularly in the current economic climate, actively aim to save money by seeking out budget airlines, package deals and online price comparison sites. For many holidaymakers, this means they can still enjoy a break in the sun or on the slopes without breaking the bank. However, this can mean any loyalty to a particular travel company is forgotten in favour of securing the cheapest deal.
Bags of potential
Though holidaymakers are deal hunters, our recent independent UK consumer report, Loyalty Pays, suggests travel rewards have strong appeal, with over 2.5 million Brits considering air miles to be their most valued reward. However, despite this, when ranking loyalty to airlines and holiday destinations against other elements in their lives, both were in the bottom three. This suggests that while consumers value travel-based rewards, they’re not currently loyal to the companies who could provide them, leaving a gap in the market for effective loyalty schemes that benefit both consumers and the travel industry.
Traditional schemes, such as air miles and airport lounge access cards, predominantly target affluent, frequent travellers and business customers. The average person taking one or two annual breaks may not have much to gain from existing schemes as they don’t use the services frequently enough to reap the rewards. In contrast, most high street shoppers use loyalty cards up to five times a week and 88 per cent of the population own at least one. Although travel is a far less regular purchase than clothing or groceries, for example, in order to benefit from the levels of loyalty generated by the broad appeal of retail schemes, travel providers need to think more creatively, profiling their customers to offer the best incentives.
A personal touch
Infrequent travellers can easily miss out on offers when they decide to book a flight or a hotel. Signing up to a loyalty scheme where holidaymakers can highlight preferences and opt to receive bargains via email, text or post, can guide future choices and increase likelihood of repeat purchases.
The benefits to the consumer are clear, from reduced prices and increased choices to added ‘treats’ such as flowers on arrival, but, the advantages to travel companies can be even greater as they gather data on their customers’ purchases, which can then be used to provide tailored offers specific to each customer. This personalised approach – sending discounts on a traveller’s favourite route or destination – offers a nice surprise and doesn’t have to stop with reduced rates. British Airways (BA), for example, recently created a ‘delivery lab’ to analyse its customer communication and ensure passengers or potential purchasers received only the most relevant and interesting information.
And BA has gone even further, using customer data and the latest technology to go the extra mile in-flight when passengers are travelling with them. Its ‘Know Me’ initiative introduced last year, gave crew members access to Executive Club passenger data and the ability to perform Google searches in order to greet passengers by name. This allowed BA to create a sense of familiarity reminiscent of walking into to your favourite restaurant, helping the customer feel valued and welcome. This approach could be taken further still; why not have a customer’s favourite snack waiting by their seat or widen the scope of the loyalty scheme to allow all passengers to sign up and receive a little recognition?
Play your cards right
To maximise scheme benefits, companies must establish more solid brand affinity through well-rounded loyalty programmes that extend beyond purely web-based approaches. Having a constant, physical reminder of a brand in the form of a plastic card provides a touch point for users and figures show nearly 70 per cent of people say owning a loyalty card makes them feel more faithful to a particular brand. Popular retail schemes such as Boots Advantage and Tesco Club Card demonstrate just how impactful and far-reaching these can be.
The sky’s the limit
There is plenty of untapped potential in the travel loyalty market and a gap for mainstream programmes that facilitate discounted travel and offer enticing rewards for all. With no shortage of bargain hunting consumers, the sky really is the limit.
 Overseas Travel and Tourism, August 2013 http://www.ons.gov.uk/ons/dcp171778_282767.pdf