Identifying channels of expression and rewarding customers for their loyalty

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Digital channels are lending a new dimension to the existing loyalty programs in the travel industry.

Travel companies are increasingly rewarding customers for their affiliation towards social networks and location-based services (LBS).

For instance, the aviation industry is offering frequent flyer points for location-based virtual “check-ins.” Some of the travel companies have already acknowledged that their consumers tend to be tech-forward and more plugged in to social networks and location-based services. Specialists in this arena believe that a virtual check-in is an expression of loyalty and there is some value in that. At the same time, in order for the industry to move en masse toward offering LBS rewards, clear and measurable ROI is a must.

Those who provide geo-smart customer relationship management solutions are allowing partners to link their existing CRM system seamlessly to Facebook, and the major LBS services, Foursquare and Gowalla.

“Persistence of your brand in a customer’s daily life is growing at a fast rate as companies work out how to create commercial opportunity from the growing social platforms,” said Iain Pringle, Head of Customer Insight & Loyalty, The Mileage Company.

“We believe that this will be a continuing trend as it is cost effective, relevant, and customers are choosing this as their channel of choice,” added Pringle.

STRENGTH
Loyalty programs have the unique ability to deliver value through opportunities exclusive to members and upgraded service for top-tier participants.

For instance, in the case of hotels, engaging frequent guests and acknowledging their preferences via a loyalty program provides hotels the necessary information to enhance the stay experience and thereby drive greater loyalty.

In order to know more about what the industry needs to work on when it comes to their loyalty programs, EyeforTravel’s Marco Saio spoke to Pringle. Excerpts:

In today’s context, it is being said that consumers are more value-conscious than ever and have been conditioned to expect more for their money after a steady diet of recession-era deals. How do you assess the role being played by loyalty programs as a tool in today’s business environment?

IAIN PRINGLE: Customers are more value conscious; there is no doubt about this. Customers have also, however, become harder to reach and more connected via social media. In this environment, loyalty programs give a means to reward customers while retaining margin but also gives brand owners an opportunity to have a dialogue with customers via social media and other channels.

Companies in this sector have been trying to lend a new dimension to their loyalty programs. For instance, JetBlue Airways in July launched a new campaign focused on driving membership and raising awareness of the benefits and enhancements of the airline’s revamped customer loyalty program. The airline intends to make its rewards program open, honest, and real. How do you think the industry is trying to make its loyalty programs in sync with what customers’ want?

IAIN PRINGLE: Airlines and loyalty programs must understand what customers want and constantly seek to adjust the proposition to meet customer demands and expectations. A good example of this from the British Airways frequent flyer program perspective is the part miles, part cash proposition for reward flights where new combinations and variations are continuously tested to ensure the strongest value offer.

How do you assess some of the trends related to rewarding customers for their affiliation towards social networks and location-based services? How do you think these moves have the potential to further enhance loyalty with current and future guests?

IAIN PRINGLE: Presence within a customer’s own social media space is a great opportunity for businesses to build loyalty with their most influential customers. The measure of getting this right is primarily finding the optimum mix of location, channel, and timing. When done well, this can create the perfect mix of right product, at the right time, in the right place. The result is highly relevant communications at a low cost that will maximize customer satisfaction and grow loyalty.

In July this year, one of the major hotel chains chose to offer bonus loyalty points to customers who “check in” at its hotels on location-based social media networks. And this month, Virgin America has chosen to offer its guests with real-world travel rewards when they virtually check-in using applications like Facebook Places and Foursquare. How do you see this form of rewarding consumers shaping up?

IAIN PRINGLE: Persistence of your brand in a customer’s daily life is growing at a fast rate as companies work out how to create commercial opportunity from the growing social platforms. We believe that this will be a continuing trend as it is cost effective, relevant, and customers are choosing this as their channel of choice.

What according to you works best to earn trust, love, and advocacy for your products and services among a new breed of savvy and fickle travel customers?

IAIN PRINGLE: The key advantage of any travel and leisure loyalty program is the lure of free or discounted travel; it always has been and always will be.

The key challenge, especially in today’s market, is to acquire collectors/members that are prepared to take the time to collect rewards for a longer period to get a more valuable overall reward. What works best to achieve this is focus on four key messages – sell the dream, illustrate the proposition, show members how it is attainable, and give them an easy first step. Keeping to these simple rules ensures that the customers you acquire are more likely stay with you and build their advocacy as they approach their goal.

Iain Pringle, Head of Customer Insight & Loyalty, The Mileage Company, is scheduled to speak at the EyeforTravel’s Customer Centric Strategies in Travel conference, to be held in Atlanta, Georgia, next year (January 26-27, 2011).

For more info, click here.