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Customer retention strategies for the travel industry

Customer retention in the travel industry should be at the forefront of your plans. With huge cost savings, an increase in brand loyalty and word-of-mouth recommendations, creating a robust customer retention strategy can really help your travel business survive and thrive in the current climate.

Customer retention is crucial for businesses in all industries. While traditionally there hasn't been much of a targeted focus on retention in the travel sector, it's one of the key KPIs of most large-scale businesses, and should be adopted as part of a wider customer strategy. New customers can cost hundreds, if not thousands, more to acquire than successfully retaining a previous customer, so creating customer retention and brand loyalty is important for businesses across the travel sector.

Below, we explore some of the best customer retention strategies for the travel industry.

1. Don't overlook anyone
With more and more entrepreneurs, Gen-Z and millennials turning to travel as an escape from reality, the travel industry is booming on the whole. Booking.com's research also showed that grandparents are more likely to take their grandchildren abroad, and that the current older generation is much more adventurous and travel-hungry than their predecessors.

Unfortunately for the travel sector and for hotels in particular, the tide is turning and long gone are the days of people visiting the same place for the same family holiday each year. With so much competition online, holidays and flights are now more affordable than ever, giving more choice to single travellers and families alike, making it much for people to fill their appetite of exploring new places and trying new things.

Therefore, it's important not to rule anyone out. While the trend of a one-off trip abroad is prevalent, that doesn't stop your customers from sharing their experience with their friends, family and followers both while they're travelling with you, and once they return. The power of personal recommendations shouldn't be underestimated, so it's really important to prioritise your customer experience for all of your travellers, even if they only intend to travel with you once.

Be sure to capitalise on people's experience while travelling with you too. Can you create a hashtag, encourage user-generated content or engage with your current visitors on your social channels?

2. Personalise the experience
Customer expectations are ever-evolving, and personalisation is a big trend in digital marketing globally. For the travel and leisure industries, this means creating tailor-made experiences. Booking.com's research also found that, generally, younger generations are now attracted to unexplored territories, want to seek out new experiences and want to make the most of short holidays.

So, by creating cost-effective options for trip personalisation, this can create unique experiences for travellers, and encourage them to travel with you again to more destinations.

3. Embrace the use of technology
Interestingly, a recent study from the Digital Innovation Observatory in Tourism report showed that almost two-thirds of people who booked a holiday online did so from smartphones in the past year. The research also showed that live chats are used by 10% of tourists and that 10% of tourists also used a chatbot during their most recent holiday to ask for information. By prioritising your mobile experience and customer support technologies, you can not only improve the booking experience but are more likely to retain your customers by providing real-time, 24/7 accessible support and answers to their queries.

Booking.com also found that almost half (46%) of global travellers would use an app that makes it fast and easy to explore and book activities in real time while travelling, so embracing technology to make last-minute decisions even easier can really support your customer retention strategy.

4. Go the extra mile
While the majority of your customers may be happy customers, to turn a happy customer into a true brand advocate is the final hurdle. By taking extra steps to create a positive experience for your customers, this can increase brand loyalty which, in turn, reduces customer churn rates. Some ideas for going the extra mile include:

• Personalised recommendations for excursions
• Opportunities for upgrades or free gifts
• Creating achievable loyalty schemes

There is one crucial part of your communications with your customers that you need to consider, and that's the positioning of your offers. If you're sending weekly emails with random excursions, irrelevant upgrade options or talking about other places to stay before they've left for their first trip, these can be off-putting and annoying if they're too regular and irrelevant.

However, if you were to send a weekly countdown of how long until your customers take their trip, with various relevant options for excursions, add-ons or meal bookings, this would be much more helpful and increase brand loyalty before they even travel with you!

It's also important to note that achievable loyalty schemes for consumers and businesses are very different. Realistically, you have to think about whether or not your customers are likely to use them, or if your loyalty scheme is just not obtainable for travellers.

For example, if your hotel gives a free night on someone's third stay with you, that's probably not realistic for most travellers, especially now when people only tend to holiday to the same country once or twice.

However, if you were to give a free beauty treatment, massage or main course if they stay for four nights with you, or a free night's bed and breakfast on their second stay with you, that's much more likely to be used, and you'll be much more likely to retain this customer.

You could also consider making these incentives transferable. Could a friend or family member who is visiting on another occasion benefit from a free night if they travel with you? It's important to take into consideration all types of travellers when thinking about creating a loyalty scheme.

To conclude, customer retention in the travel industry should be at the forefront of your plans. With huge cost savings, an increase in brand loyalty and word-of-mouth recommendations, creating a robust customer retention strategy can really help your travel business survive and thrive in the current climate.

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