Loyalty programs have been staples in the travel industry for decades. The most well-known program is probably the airline programs that really kicked off in the 1970s. The airlines have taken things to crazy levels by partnering with credit card companies.
But there is a backlash in the travel industry for loyalty programs. A study found that only 14% of people fly the same airline every time.
That’s not very loyal.
The reason for the backlash is the fact that companies are turning loyalty programs into big revenue streams. Customers generally are okay with that fact and they will gladly use the same service again and again, but only if the value remains in their favor.
Back to the question: Should you launch a loyalty program this year?
Yes.
Loyalty still plays a major role in the travel industry, but you have to do it right for your customer. That’s the only true way to earn their business again and again.
Here are some tips for building your travel industry loyalty program.
1. Lump Sum Discounts Are Better Than Initial Discounts
Many companies offer discounts to first-time customers. There are a few issues with this strategy. For one, how do your existing customers feel when they know that a new customer is getting a better price than they are? That’s not very loyal on the company’s part. You want to reward loyalty.
Second, if you discount your initial offering you’ll attract discount customers. These customers are trained from the very first purchase to expect discounts. It will be near impossible to get them to buy again unless they get the same deal.
A good discount, one that creates loyalty and attracts the right type of customer, is a lump sum discount. This is the situation where you give customers a discount for paying in advance or for buying multiple items at once.
For example, you offer a 10% discount for those that pay early. Or you offer a discount for those that buy 5 or 10 visits or whatever you’re selling.
You get the money and commitment up front and the customer gets value by getting a good deal. Their loyalty is rewarded and you are rewarded as well.
2. Create Emotional Add-On Items And Services
Sometimes it’s the little things that add the most value to what you offer. And they can create incredible loyalty for your brand.
An airline, Midwest, used to offer freshly baked chocolate chip cookies at the end of every flight. Those cookies probably cost a few cents each, but to the customers it felt like an incredible value. And it gave those customers something to discuss.
It’s difficult to fly with an airline that offers freshly baked cookies to one that doesn’t. It’s an emotional experience and creates loyalty with something simple.
Hotels do the same thing with little add-ons like mints on your pillow. Tours do the same by offering little bottles of water midway through the tour. Restaurants offer hot towels at the end of each meal.
What little add-on can you add to your offering to create an emotional experience and memory?
3. Convenience Is King
Your customers are busy and most of the time they want things done for them. And they’re willing to go with the brand that does the most for them.
Let’s say a hotel gets business travelers staying for a conference. The next time that conference comes to town the hotel could call or email the previous customers and say:
Are you coming to the conference again? Confirm that you are and we’ll setup everything for you just like last year.
Offer to do it for them and people will gladly accept. It saves them time from looking for a room and making decisions. Many people want decisions made for them.
What convenience can you offer your previous customers?
4. Partnerships Add Value And Create Loyalty
Finally, partnerships are a great in many ways including loyalty. That’s why airlines partnered with credit card companies and it does add value for customers.
Look for partnerships for your travel business. Hotels and tours can partner. Restaurants and theaters can partner. Tours and coffee shops can partner.
Survey your customers and ask what other things they would like to do on their trip. Look for partnership opportunities that will fulfill the things your customers want to do.
Then you and the partner can sell the package with both of your services.
Final Thought
Loyalty is still important in the travel industry. But customers have become weary of sub-par value in some loyalty programs. Your customers aren’t stupid. They know that if they’re loyal to you that you’ll be benefiting on your bottom line.
But customers are okay with this fact as long as they’re getting value. Follow the tips above and you’ll be providing the value your customers want.
Image: xlibber
