How airlines can listen to their global audience and convert bookers to frequent flyer members
Loyalty programmes have been providing the travel industry with valuable insights into its customers for over 40 years. Whilst there’s a debate about whether the model for the modern frequent flyer scheme started with United Airlines in 1972 or American Airlines’ Advantage in 1981, there is no doubt that loyalty programmes are beneficial to both the customer and the company. Even the Maldives now have a dedicated loyalty programme – the first country to offer one, from December 2020.
But as today’s airlines engage with increasingly global audiences, how can they listen to their loyal customers and provide them with a great experience? One that boosts customer satisfaction but also increases the return rate of customers and maximises the revenue on each booking? How can they grow sign-ups, converting their customers into club members?
The value of loyalty programmes
A well-constructed loyalty programme will benefit both the customer and the company running it. Benefits to a business from customer loyalty includes repeat business and increased revenue – a 2020 survey by McKinsey found loyalty programmes boost spend between 30% and 60%. Loyalty schemes also create brand ambassadors amongst its members, and are more likely to engage with brand surveys or questionnaires, providing marketing teams with valuable customer insights.
An IBM study into loyalty programmes in travel in 2015 found airline programmes attract more participants than hotel or rental car loyalty schemes, but its members are the least satisfied. It highlighted the need to move beyond discounts and into genuine engagement as a way of boosting satisfaction – and therefore revenue – from this key market segment.
The same study also argued for companies to use the insights gathered through their loyalty programmes to personalise rewards and the travel experience. But how do you do this, given each traveller has a unique set of wants and needs, which can differ from booking to booking?
Using technology to understand bookers in real-time
One of our clients was seeking to do just that – boost their understanding of their online customers in real-time, to be able to promote the most relevant benefits of their loyalty programme to individual users. This should give customers greater motivation to sign-up to its loyalty programme, taking its world-class frequent flyer scheme to even greater heights.
By using our technology, they now can identify each individual online user in real-time and tap into their motivations for booking. Different benefits of loyalty programmes appeal to different users – whether it be a business traveller seeking a quiet business lounge before departure, families of young children prioritising a generous luggage allowance, or an elderly traveller who wants to secure a seat close to the toilet. With a myriad of reasons for travelling, there’s just as many reasons for choosing to sign-up (or not!) to a loyalty programme.
Tailoring customer touchpoints
In 2018, Google found that customer service is the key driver for high-value travellers when choosing to book travel experiences, not rewards programmes. Fuelled by the immediacy of a digital world, consumers now gauge customer service as everything from how long it takes a company to answer a pop-up chat to seeing information they feel is relevant to them when visiting your website.
Every touchpoint gives your brand a chance to provide customer service – and if you can tailor your loyalty programme sign-up to each user, you are more likely to convert them. In 2017, it was reported that 57% of US travellers felt brands “should tailor their information based on personal preferences or past behaviours” – this figure will have only increased as consumers are online even more in 2021 than just four years ago.
In our recent Use Case with an airline, we created a set of eight distinct experiences to test against different user profiles, running AI testing against rule-based testing to gauge interactions with the message to sign-up.
Final thoughts: loyalty as a tool for post-Covid recovery
Deloitte sums up the importance of data and loyalty for the travel industry as it continues its recovery from the pandemic:
“If there is one thing that’s certain in this uncertain time, it’s that human experience will likely position organisations to better meet needs and ultimately stand apart from the competition… Organisations who align their rewards programmes with customer values and consistently deliver feelings of security can incite continued loyalty and capture frequent travellers into the reward programme and overall brand fold. We believe this values based approach can help travel and hospitality brands respond, recover, and ultimately thrive in the face of our new realities.”
Read more industry insights and marketing tips on the bd4travel blog.