Travel is a very price-sensitive industry. You
could be an airline miles hunter or devoted fan to the hotel chain, but when it
comes to the final click, the price is still an extremely important factor in purchasing
decisions.
To be honest, I’m not even sure there is such a
thing as true “loyalty” for travel brands anymore. It seems Phocuswright is in agreement, with a recent study
it conducted for Aviasales that found travel loyalty programs only influence
25% of travelers when it comes to choosing an airline or online travel agency.
There could
be various reasons behind this, but generally, it can be chalked up to the fact
that most people only travel a few times a year. This means that it is hard for
these customers to organically develop any kind of loyalty towards a particular
brand or service.
I’ll give you another example. Customer
Thermometer, a company focused on customer survey data, reveals
that only 2% of respondents have any emotions
toward travel brands, while 30% of respondents noted they had preferences in
the home appliance sector. That’s a staggering difference.
This problem begins to compound when looking at
smartphones, as well. For example, Phocuswright reports that every fourth
online purchase (27%) is made using a smartphone. At first glance, this is not
a problem, as that means people are using apps to make purchases.
The problem,
however, and one that is very serious, is that smartphones have limited space, and if a company like Apple is involuntarily cleaning the limited space on
your phone, that could include the removal of less-used apps like those from
the travel industry.
This is where loyalty becomes crucial
So, we’ve come to the conclusion that it is very
unlikely that just pure attachment to a particular travel brand can enhance
traction. That means this is a pivotal time for the industry to rethink the
concept of loyalty and the entire customer experience. It is likely that some
companies have already started making these important steps.
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There are a few ways this can happen. One is to
use so-called “super apps” to help maintain relevance. You’ve probably heard of
some of these super apps. Grab, the one-stop shop for basically everything in
Asia, is a great example.
Past that, even companies like Amazon are doing the
same and dipping into the travel industry. They have been trialing
a service with Cleartrip that allows users to
buy travel tickets in India.
It’s a brilliant move: Your users already know
you have a wide variety of products and at this point, so having travel
services is honestly not surprising.
The other tactic is rooted in the retail sector.
Latvian airline airBaltic has incorporated its loyalty system, called Pins, into
almost everything it seems. Not only can users collect and spend pins (points)
on flights, but they can also use them on everyday purchases like clothes, home supplies and
movie tickets.
Having so many options is a huge way to gain users and, in turn,
increase loyalty over time.
Doing it differently
Maybe it is time to take the road less traveled
- acquiring loyalty by finding what can best be described as unusual patterns
in travel research and booking.
We’ve come to the conclusion that it is very unlikely that just pure attachment to a particular travel brand can enhance traction
Max Kraynov
So, when you search for tickets, it’s normally a
one-click experience, right? You close the app and forget about it until next
time you travel.
In this case, the cost of switching to another application is
literally zero. Customers have no personal connections to the product within,
so leaving the app means nothing to them.
We’ve studied dozens of different activities and
analyzed the data in an effort to link the full buyers’ journey - and not just
travel. Take music, for example. Our data reveals that one-third of users are
looking for tour dates for their favorite artists and accompanying flights as
part of the same research session.
Music is something that people think about
way more than twice a year, so we’ve added a new feature allowing users to
browse tour dates while also giving the ability to look at transportation
prices.
Even if you only have a rough idea of your
vacation dates, users can get a robust list of related events in Aviasales.
That relevancy can come from analyzing users’ media libraries connected to
streaming services like Spotify and Apple Music.
Another similar experience is that of football
(soccer for those in the United States), and it works in pretty much the same way. This
is how an application goes from being a one-shot game and turns it into
something personal. It’s no longer an app you need from time to time, it’s a
tool you use for a variety of things, while still funneling users towards the
main objective: travel.
Yes, I do have my doubts about loyalty in
travel. Vague metrics, high competition and the all-important price are all
key factors. However, there is at least one performance indicator you can
improve on - and that is retention.
You have plenty of tools from your own
ecosystem to help with this. So, skip loyalty; chase retention.
About the author...
Max Kraynov is CEO of
Aviasales.