In 2024, booking travel still presents challenges
such as price fluctuations, hidden fees and uncertain cancellation policies.
Additionally, noisy online platforms and poor customer service add to the
complexity. While these challenges may not be top priorities for travel
retailers focused on innovative products, addressing them can significantly
enhance customer satisfaction and loyalty.
Brands that strike a balance between security,
transparency and tailored offerings are poised for success in the evolving
landscape of travel booking. Overcoming travel booking fatigue requires a
re-evaluation of basic principles and a focus on identifying what customers are
willing to pay for in terms of service and curation.
What business model for loyalty?
Leading financial institutions like American Express,
Revolut and JPMorgan Chase have entered the field by providing premium
benefits and/or travel discounts to specific audiences. Neobanks with
subscription models are taking it a step further, capitalizing on unique upsell
propositions. While paid loyalty programs in travel are still niche, they
represent the most profitable and engaging approach at the pinnacle of the
loyalty ladder.
Many loyalty programs looking to achieve similar high
retention goals by adding travel bookings, or a co-branded white label, are
relying on a limiting business model: capture a revenue share of their users'
travel transactions.
Is the retail partner butting in on the relationship that the brand has with
its clients? One could argue that brands are actually “de-loyalizing” their
programs. In opposition, a focus on customized benefits and user experience can
allow brands to cultivate their customer relationships and achieve long-term
profitability.
Owning your customers through the entire journey is key. Why enrich the brands
of others just to grab a measly buck or two of transactions?
As technology evolves, custom software solutions
enable brands to capture revenue and customer engagement opportunities
efficiently, in their ecosystem, ushering in a new era of travel loyalty and
with limited resources needed.
Curation, instant gratification and reward options
Launching personalized paid programs or implementing
discount clubs based on customer data can be a rewarding strategy. Brands can
tailor promotions, discounts and experiences to individual preferences, making
customers feel valued. For instance, with the rise of "workcations,"
offering affordable lodging with co-working space options can appeal to a niche
market where travel represents a significant share of their spending.
Instant gratification is crucial in the transformed
landscape of travel loyalty as many consumers are shifting their focus away from earning
points as the sole determinant of where they spend their travel dollars.
Successful programs combine immediate discounts with
long-term rewards, keeping members engaged and motivated to spend more. Having
the capability to truly balance how value should be distributed for a specific
program is a major step toward differentiation.
Implementing tiered structures with increasing benefits as customers also move
up the loyalty ladder is another example of best practice. This motivates
customers to spend more to unlock higher levels or simply to upgrade. Not tapping
into the most loyal customers who are just asking for more is a significant
missed revenue opportunity.
An elevated customer experience is key
Today's travelers demand tailored experiences, with
80% expecting personalization from their preferred brands. Accessibility
across various channels and a focus on in-person interactions deepen customer
engagement. This enables customers to engage with the program seamlessly,
regardless of their preferred platform. Focusing on a solution provider who can
deliver in-person interactions in the form of a 24/7 concierge service or
personal travel agent can be a true differentiator.
According to Zendesk
Trends 2024, 60% of consumers make purchases based on expected service
levels, a particularly relevant factor in the complex travel industry. A robust
artificial intelligence strategy complements the human touch, merging online
and in-person experiences, making it essential when selecting a travel partner.
Be sure your users can benefit from the same - or elevated - customer support levels that you have defined are crucial for your brand.
This can translate into giving access to a knowledgeable agent before a booking
is completed or allowing communications and notifications to be omnichannel and
personalized. While this human touch is essential, a powerful artificial intelligence strategy will
help merge what happens online and in person. In a word, it should be a
priority when selecting a travel partner to ensure that this level of service
is available.
Travel can easily be combined with lifestyle rewards
Travel club builders and custom software companies
can enhance loyalty experiences by offering end-to-end solutions. Access to a
wide range of benefits beyond travel insurance or affiliate travel deals
fosters an emotional bond with customers daily, making the program more than
just another loyalty club. Providing concierge assistance every day of the year
and access to discounts on restaurants, theme parks and activities close to
home are a few options among many to consider.
In summary, a differentiated travel experience,
including diverse benefits, opportunities for earning and redeeming rewards and
elevated customer assistance, is worth the investment.
Lastly but most importantly, securing recurring
revenue based on access rather than transactions mitigates risks associated
with seasonality and economic factors.