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Is loyalty still relevant in the travel industry?

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Is loyalty still relevant in the travel industry? / Leio McLaren

Everyone keeps telling us that loyalty is dead. It’s probably true, certainly in the low-cost airline market. But what they forget is that for many brands, it never really existed. And if it did, it certainly didn’t exceed low prices. Last year, Ryanair carried more passengers than anyone else while having rock-bottom customer satisfaction. Illogical? Perhaps; perhaps not.

And while brands such as British Airways and United Airlines have contributed to the airline market, having the biggest decline in customer service perception following a monumental bank-holiday IT meltdown and catastrophic passenger PR disasters respectively, it’ll be soon forgotten and they’ll be back on the consideration list for holiday travel plans in no time.

Brands in fickle markets need to create customer preference – a shorter-term, easier to influence shift in brand allegiance – to achieve marketing and commercial success. Ryanair uses low-price to drive this preference, but in a head-to-head battle it’s a race to the bottom.

To create preference effectively you need to have a relationship with your customers. And to have a meaningful relationship, you need data. Good data; data that you can use and that is predictive of behaviour; data that you collect and use under the watchful eye of the GDPR lawyers. The challenge is that in the airline industry, according to our own research, only 4% of customers are currently willing to share that data with brands.

Fixing the data value-exchange in the airline market

So, what we need to do is optimise the moment that customers come to share their data – the data value-exchange. And we need to do this both strategically and operationally.

Consumers expect a creative relationship with airlines. They are looking for new experiences. Functional needs are still fundamental, but the need to inspire through communication is even more pressing – especially in a world where loyalty schemes are off the table.

This same research shows that if airlines offer this inspiration and relevance, customers are 11 times more likely to share this coveted data; that’s a significant differential. And if brands offer this, they need to be able to deliver on it.

Combining this need to inspire with an ever increasing need for relevancy, airlines can counter the effect of price and the loss of appeal for loyalty schemes with a data-led, personalised and highly targeted approach.

To deliver on any data-led strategy you first need the data. And even with the most effective value-exchange you have to be set-up to accept this information from your customers in a way that suits them.

Data acquisition: six operational things to change

Start at the end

Every plan starts with what you want to achieve (at least, they should do). In this case, what creative experience do I want to deliver to my customers? That becomes the starting point for what data you actually need to collect.

Use the data, or disappoint your customers

How many brands collect data they don’t need or use? I’d guess all of them. For some, this is fine as they’re using enough of it to deliver relevance back to their customers. But for other, they’re often leveraging state-of-the-art technology to deliver what, by any other definition, is Spam. And guess what, that turns your customers off.

Make it easy and engaging

Drop down menus and text boxes aren’t the digital utopia when it comes to data capture. Even basic data visualisation, sliders and pictures go a long way to making a better experience.

Make it clear why you want this data

This doesn’t mean putting a legally correct catch-all at the bottom of the page. Make it obvious – because this exchange should actually be valuable to the customer. If it’s not, then why are you doing it?

(Hint: don’t let a lawyer write anything – lawyers are great at minimising risk, not writing copy)

Data is everywhere

Don’t forget that data relevant to a customer exists in many places. Not just what they directly provide, but also what you can infer through their digital footprint and engagement. The travel sector is also blessed with lots of other available data to help drive experience – weather, events, travel delays, to name just a few.

You’re a brand, not just a department

Your customers pass lots of data to you in many different ways – you need to join it all up. The technology exists, your customers expect it and it’s proven to drive revenues. Why haven’t you?

How easy is this all to do?

Well, this is the issue; if it was easy we’d all be doing it.

How many times is data capture the last thing on the agenda (if at all) from a campaign perspective, with brand marketing initiatives often being delivered in total isolation to CRM teams?

Even with advanced brands, who genuinely have a data-driven approach, how much of that manifests in a starting point as early as aligning overall strategic and creative direction to the data acquisition strategy and the value-exchange that encases that? Very few I’d suggest.

And even if the strategic intent and approach is aligned, then you also have to have the technical capabilities to do it. In most cases that doesn’t just mean the tools to do this (most brands have better technical platforms than they need), but to also make sure you have the people to help deliver this for you. To effectively leverage platforms, people need to be skilled, well-trained, time-rich and well supported. Investment in people to run your technology platforms is widely thought to be 2:1 or 3:1 depending on who you ask – under-investing in people to deliver your vision is as good as not having a vision at all.

Nick Corkill is new business director of data at RAPP.

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