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Beyond Loyalty Programs: How Travel Marketers Must Evolve Their Customer Strategies

Travel customers expect every touch point with a brand to be highly entertaining or personalized. And why shouldn’t they? In their mind, we have all of their information and should understand their preferences when they engage with our brands, both online and offline. Travel marketers realize this expectation and thus evolved to a business model—largely driven by loyalty programs—that is now becoming more customer-centric and mature in its engagement tactics. With this model, travel brands know their customers at the point of purchase: demographic and transactional information is provided when a customer books an airline ticket or hotel room. 

With immediate access to such rich information, travel marketers are the pioneers of loyalty programs, also known as rewards programs. This information is often used to further identify their consumers and deliver customized experiences, as the consumer demands. With the development of mobile apps and online resources to improve the customer experience—examples include accessible flight reminders, notifications, destination suggestions, and concierge services—travel companies can engage with and provide tremendous value to customers. Many industries have seen the success these pioneers have produced and have mimicked their techniques to see great financial rewards.

Building On the Loyalty Program

But are these initiatives enough for travel companies to establish competitive advantage and brand loyalty in today’s digital marketplace? Trends show that today’s consumers are searching, shopping, and buying travel online—emerging the OTA (online travel agencies) model, that allows consumers to find the best rates and options across multiple carriers. Like traditional travel companies, OTAs leverage mobile apps and online resources to engage and create unique experiences for customers. In 2011, Kayak (a leading OTA) had over 900 million travel queries on its website, 14% of which were generated from its mobile platform (Trefis.com, 2011). And with the growing adoption of mobile devices around the world, Kayak saw mobile queries increase by 24% in 2013 (Trefis.com, 2011). This OTA model introduces consumers to unfamiliar brands, which they could easily select simply because of a lower price or offered amenity. This creates a larger need for travel brands to build direct relationships with their consumers. As you can imagine, this is a challenge to today’s travel marketers, especially in the digital marketplace.

Yes, these pioneers have access to customer information and have implemented some technologies that provide significant value.  However, few have implemented the infrastructure that enables them to map profile and event stream data in their databases—both online and offline—to establish true competitive advantage. Leveraging this information to develop customer strategies is known as customer relationship marketing (CRM), which is the foundation that enables marketers to:

  • Execute, deliver, and measure multi-channel campaigns
  • Identify consumer profiles and leverage enterprise segmentation to unlock customer value
  • Provide personalized messages to known consumers online and offline
  • Use known consumer data to address anonymous, yet similar, audiences across all media channels—mobile, social, online, SEM, etc.
  • Analyze and attribute marketing campaigns to optimize media programs

Becoming Customer Centric

Embracing customer strategy as a business strategy is not an overnight occasion. This evolution requires full support of the executive management team—commitment to vision, budget, and designated staff—or the initiative is doomed to fail. In fact, nearly half of all CRM transformations fail because companies are not prepared to make the change—no executive support—or they fail to accomplish one or all of the ever-so-important steps in the process—conquering addressability at scale, become master at omni-channel marketing, and building the right technology stack. However, with the right partners and the right mindset, any company can successfully transition to CRM and begin to realize great financial lift.

If your company is interested in making the change, download a free copy of our award-winning 2014 Marketing Imperatives today! We’re here to guide you though the transition and ensure your CRM transformation is a success.

Source: (2011) Trefis Team, "How Kayak’s Business Model Creates Value", Retrieved from http://www.trefis.com/stock/kyak/articles/162414/how-kayaks-business-model-creates-value/2013-01-11

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