Latest News
HomeColumnsArticlesTravel-based businesses need to do more than just offer points to take full advantage of loyalty schemes

Travel-based businesses need to do more than just offer points to take full advantage of loyalty schemes

The most recent UK research from data marketing firm GI Insight showed that supermarkets are still king of the loyalty world, with travel-based businesses – especially airlines and hotels – coming up short. The results indicate that, for the companies within the travel industry to have a stronger participation rate in their loyalty schemes, they need to do more.

Customer loyalty is critical to the continued success of any thriving business – especially with the majority of research showing that attracting new customers generally costs far more than it does to retain existing customers. With this in mind, loyalty schemes have become a crucial weapon in the arsenal of many businesses within the travel industry.
For businesses of all types, a loyalty scheme has to be more than just a promotional mechanism for driving customer traffic. It has to be a platform for understanding and engaging customers, allowing companies to capture customer data and respond to their behaviour.

The most recent UK research from data marketing firm GI Insight showed that supermarkets are still king of the loyalty world, with travel-based businesses – especially airlines and hotels – coming up short. The results indicate that, for the companies within the travel industry to have a stronger participation rate in their loyalty schemes, they need to do more.

There is a lot of scope for the travel industry to up the ante with their loyalty schemes. Out of 1,000-plus UK consumers surveyed, a mere 14% belonged to an airline programme and just 13% had joined a hotel loyalty programme. And within these cagtegories, the scheme participation rate is low, with 35% of airline loyalty programme members actively participating and only 28% of those belonging to hotel schemes remaining active. In other words, many companies in the travel industry have the necessary tools needed to track and understand customer behaviour, but they are not using the data to keep members engaged.

The key to modern loyalty programmes is that it enables you to gather and analyse customer information to gain insight that guides communications, offers and other interactions via the scheme. Too many travel industry firms are failing in this regard. Our research showed that only 17% of airline loyalty scheme members and 18% of those belonging to hotel programmes felt that providers analysed their needs effectively and sent them relevant offers.

To excite members, attract new joiners and reignite schemes in general, companies in the travel sector need to not only do more with the data they gather from loyalty schemes but ensure that the programmes they run offer more comprehensive benefits. Reward points remain at the core of many programmes but research across all sectors shows other advantages are equally or more important to many consumers. Here are the major drivers, according to the research:

Redeemable points
An impressive 74% of respondents listed reward points as a major motivating factor for signing up and remaining active in a loyalty scheme, but that means over a quarter don’t consider these to be an important element at all. Overall, the research shows that UK consumers are drawn to loyalty schemes that offer clear cost-saving benefits, and even though reward points are one way to do that, the research also clearly demonstrates it is not the only way.

Vouchers/ coupons with a cash or percentage discount
A very clear majority of consumers (60%) see vouchers and coupons that provide real cost savings as a big draw for loyalty schemes. However, it is essential that these types of communications be timely and tailored. Companies need to apply customer data effectively to ensure that offers are relevant.

Special offers
More than 50% of the respondents said they were excited by special offers. It is imperative that these be effectively targeted and personalised. Travel enthusiasts will always be able to find lots of offers for flights or hotels in the marketplace; therefore, a loyalty scheme needs to offer something which suits its scheme members personally better than the general deals being touted.

Easy sign-up and use
People are more than likely to sign up to schemes which are easy to join and use: 24% of respondents said this was a top motivator for participating in a scheme.

Perks
The research indicates that, for a significant minority of consumers, extras such as complimentary coffee or cake, free use of facilities such as a member lounge or health club, special offers tied to occasions such as birthdays, and early access to new products or special deals are a big driver when it comes to loyalty schemes. Our survey revealed that 17% of consumers are drawn to schemes by free perks, 12% by event-linked offers, and 12% by exclusive/first access to launches or discounts.

Mobile access
Most surprisingly, despite continued growth in the use of smartphones and tablets, only 6% of consumers said the availability of an app was a major reason for participating in a scheme. However, the research showed that mobile loyalty apps were a bigger lure for younger consumers, with 10% of 18-24-year-olds and 14% of 25-34-year-olds seeing this as an enticement. Travel and hospitality brands pushing their on-the-go access – especially with a younger demographic – might still find it beneficial to differentiate themselves in the marketplace by promoting an app.

Andy Wood is Managing Director, GI Insight.

+ Posts
28/03/2024
27/03/2024
26/03/2024
25/03/2024
22/03/2024