Building Loyalty in a Competitive Leisure Travel Market

It’s fair to say that holiday makers are spoilt for choice these days with the plethora of options at their fingertips to book their next dream getaway and in the leisure travel sector, this is no different.

With global economies struggling due to the continued knock on effects of COVID, Brexit and the unlawful invasion of Ukraine by Russia. Additionally, with people struggling against rising energy bills, interest rate hikes driving up the cost of borrowing and global unemployment peaking, it’s safe to say that luxury’s like holidays may take a bit of a back seat in personal budgeting plans.

Since the pandemic, industry trends show that the number of leisure travellers is growing, but is still well short of pre-pandemic levels. The pinch on travellers' purses will drive them to shop around for a deal, which throws out a challenge to the leisure travel companies wanting to win in this competitive space.?

Going on holiday is a highly emotive experience for the customer. When booking a holiday, the brain's reward system is activated, and dopamine is released which can contribute to feelings of excitement and anticipation. Additionally, the planning and anticipation of a holiday can also lead to an increase in serotonin levels, which is associated with feelings of happiness and well-being.

For most people, booking a holiday involves spending a significant amount of their hard earned money on an experience for themselves, their family or friend to enjoy. Holiday makers are not just buying a flight and hotel room, they’re buying adventure, relaxation, a chance to unwind, to reconnect with their loved ones, to experience a new culture, to try new foods, etc. They want the most complicated decisions to be, what flavour ice-cream to have or whether to chill by the pool or on the beach.

What they don’t want are hidden fees or extras, inflexible bookings, poor communication, uncaring customer service, hotel expectation vs reality to be vastly different and once they’re home, for the “holiday blues” to not hit them too hard.?

For leisure travel companies operating in a competitive market place, is being the cheapest enough to win and grow customer lifetime value??

What can leisure travel companies do to drive customer acquisition and loyalty to turn the dial on their retention and LTV metrics? What are the things that will impact NPS and CSAT scores?

As a Product Leader, I recently wrote about, what I see as the 5 pillars of loyalty in the following article: https://www.dhirubhai.net/posts/richardshnieder_product-loyalty-productmanagement-activity-7108100435407708160-qhcV

The TL;DR on this is:

1. Trust
2. Simplicity
3. Great experience?
4. Customisation & Personalisation
5. Communication

As a Product Leader with an interest in loyalty in the leisure travel sector, I invite you to join me in peeking into the key stages of a holiday and see what opportunities there are for leisure travel companies to win in these areas:

1. Discovery and booking management
2. Travel and experience
3. Post-holiday?

Just for clarity, the ideas shared in this are just ideas based on discovery into the market and experience within the loyalty space within ecommerce. These ideas would need to be validated within the context of the market to assure that they are feasible, viable and desirable.

Stage 1: Discovery and Booking Management - Laying Foundations

Trust:

Leisure travel companies must prioritise transparency in pricing and information. Providing clear, honest descriptions of destinations, accommodations, and itineraries is essential. Customer reviews and ratings should be readily available, offering prospective travellers a sense of trust and authenticity. Those familiar with Robert Cialdini’s 6 principles of persuasion will recognise “Consensus” or “Social Proof” as one of the key drivers influencing someone to take action along with “Authority” and “Commitment”. A leisure travel company mastering these principles should, in theory, build trust.?

As human beings we are imperfect, we make mistakes and things happen in our lives to change our circumstances. The humanity and humility element of customer relations is another way to build trust. Helping customers protect themselves against these changes in circumstances and enabling a degree of flexibility is the order of the day. Striking that fine balance between being able to help the customer directly and ensuring they have the right insurance protection to prevent financial loss before they travel.

Simplicity:

The booking process should be intuitive and straightforward. Streamlined websites and mobile apps with clear navigation and concise forms can minimise frustration and confusion. Simplicity in communication during this stage, such as responsive customer support or AI driven Travel Advisor, ensures that potential customers feel valued and supported when making such a high cost purchase.?

Great Experience:

Even before the holiday begins, most package holiday companies already offer a great experience by providing inspirational content, informative guides and the ability to book everything from car hire, to a round of golf and lots more in between. This builds anticipation and excitement for the upcoming trip, leaving customers with a positive impression and to touch upon my earlier point, only the important decisions to make about ice-cream flavours.?

Coming back to my old pal Cialdini (he’s not really a friend), further principles of persuasion are, “Reciprocity”, i.e. when the customer gives something, they get something in return and “Scarcity”, i.e. when you believe something is scarce or exclusive, you want it more.

In order to turn an excited holiday maker into a loyal customer, leisure travel companies must find innovative and exciting ways to deliver value for money and a great experience. Offering discounts for repeat customers, either off the cost of their next holiday or experiences while on holiday could be user tested. For those leisure travel companies with their own airline, things like seat upgrades, airport lounge passes, free drinks, meals or snacks are small gestures that potentially have a low margin impact but provide a nice feeling for the customer. Additionally, for those who have different brands within their group, the loyalty proposition has potential to become even more attractive and interesting for travellers.

Building a customer loyalty program with relevant, personalised rewards is just one tactical piece in the jigsaw when it comes to building a strong relationship with your customers in a highly promiscuous market place. The rewards you give customers need to be based on desired behaviour, because the goal is to increase repeat purchase, purchase frequency and increase average order values.

Businesses need to experiment to understand what rewards they can offer to incentivise customers to take the actions they want, but most importantly, not trick them into doing anything they'd not want to do.

Whether it’s points and rewards based on spend, distance travelled, frequency of travel, the important thing is to keep building on the emotional good feeling side of this experience. Keeping the Dopamine and Serotonin flowing will help the memory of this experience live long in the customer’s mind. The customer wants to believe that not only have they got a great deal and great value for money, but also feel like they’re being rewarded for doing so outside of just their holiday. To feel like a VIP and that they’re getting something special.

This space is also open to explore strategic partnerships, for example, with complimentary retailers, for example fashion retailers, on-demand streaming services, pharmacy brands, travel accessory retailers, photo services…anything that can help enhance the great experience the customer has.

Customisation & Personalisation:

During the booking process, leisure travel companies can gather customer preferences and interests to tailor holiday packages. Offering optional add-ons and upgrades based on individual preferences demonstrates a commitment to personalisation.?

I recently also wrote about innovation in the travel space and how leisure travel companies can leverage machine learning and AI to switch up the way in which customers book their holidays. I would suggest that with trained data models, a travel booking system can utilise the traveller profile data to make personal recommendations, not only on destinations and hotels, but also experiences while on holiday. Families with kids would be offered experiences like waterparks and surfing lessons, whereas older couples could be offered wine tasting or adult only experiences.?

In the context of persuasion, this is what Cialdini refers to as “Committment” and this provides the opportunity for the leisure travel company to demonstrate to the customer that they understand who they are and what they want and are committed to ensuring they have the best possible holiday.

There are many tools available in the market that are amazing at driving the orchestration of e-commerce journeys using user driven inputs to build personalisation and customisation. I refer to tools like Insider, Dynamic Yield and Salesforce Marketing Cloud. These tools, coupled with analytics software like Contentsquare, Quantum Metric and testing tools like Optimizely, AB Tasty or VWO provide product teams and marketers with a powerful toolbox for success.

Communication:

Communication is the piece that links all 5 pillars of Loyalty together. The tone of voice used, the language used, the simplicity of the communication are all such important factors in driving loyalty. As mentioned before, purchasing a holiday is a highly emotive thing. Amazing things happen in the brain when booking a holiday and tapping into that physiological response by making it the best and most exciting booking ever creates memories.?

This is the opportunity to use the persuasion principle of “Liking”, which is, the more you like someone/something, the more likely you are to be persuaded by them.?

The heuristic booking journey should be an enjoyable one, where transparency and clear and honest communication will build trust and confidence in the purchase decision. Prompt and informative communication during the booking process is vital. Confirmation emails, itinerary details, and travel tips help set expectations and ensure travellers are well-prepared.

And, most importantly, easy access to help, whether it’s via an AI driven bot that gives the customer relevant information, based on the point in the booking journey they find themself, or an actual human to respond to customer queries. Most leisure travel travel companies already recognise this and provide this facility, but the importance cannot be overlooked.

Stage 2: Travel and Holiday Experience - Making Memories

Trust:

Leisure travel holiday companies must continue to uphold trust by delivering on their promises. I could end this section right here, but there is a little more to say. The successful delivery of all of the pillars of loyalty below will drive trust as this phase of the holiday experience is “game time”. Discovery and Booking was just the warm up, this is now the chance to shine and from the moment your customer leaves the house to head to the airport, to the minute they get home, you need to be there for them, the whole way.?

Smooth airport transfers, reliable accommodation, and adherence to safety protocols all contribute to a sense of trust and consistency. The reality of this is, that if everything is good, you’ll build trust with your customer, but the minute something goes wrong, how it gets dealt with will live rent free with the customer for years. It will be the thing they go home and tell their friends and family, it will be the thing they post reviews about and these are the trust-breakers.

On the converse side, delight customers and go above and beyond and they become advocates for you. This is very obvious marketing 101, but I just want to reinforce this message.

Simplicity:

There are certain things leisure travel companies can and can’t control. They can’t control the panic of a forgotten passport or traffic on the way to the airport. Going back to the previous point, simplicity on this part of the journey is all about not making the customer have to think. Leisure travel companies already do a great job supporting their customers through the airport journey, flights and transfers and even when they’re in their resort via their mobile apps. These apps where the customer can book an experience (if they’ve not done so already when planning their trip), from the comfort of their sun lounger.?

Great Experience:

From curated tours to memorable activities, leisure travel companies should focus on creating unforgettable moments. Things like surprise perks, such as welcome gifts, room upgrades and personalised experiences all enhance the overall impression and make the customer feel special. This genuinely is the leisure travel company’s moment in the spotlight and the opportunity to create their brand advocates.?

Customisation & Personalisation:

Personalisation shouldn't stop at booking. Tailoring activities and experiences based on customer preferences can make the holiday truly unique. Remembering special occasions, dietary requirements, and individual interests ties this into the great experience pillar and provides the ability for the leisure travel company to foster a closer relationship with the customer. In showing that they understand their customers’ needs and can use this to drive that great experience, they will also drive that reason for customers to keep coming back. Of course, in order to do this, leisure travel companies need to use the data they have on their customers and use ML and experimentation to perfect this. Those with an app, have the perfect window into the customer’s holiday experience and with the right tooling, they can really have a strong impact in this area.

Communication:

When the customer is on holiday real-time communication channels for assistance, updates, and emergency support are essential. We’ve seen a summer in the Mediterranean, where wildfires have torn through holiday resorts, leaving travellers with a holiday they’ll never forget for all the wrong reasons. Whilst this was a “Force Majure”, how the travel companies handled this was to be applauded and any praise given was well deserved.?

The importance of keeping customers informed about any local situations, itinerary changes or delays helps to maintain a sense of trust and safety.?

Customers need to feel that communication is a 2-way dialogue, where the travel company is not just trying to sell them personalised experiences, but also to make them feel like they’re there for them if needed when there is no rep about.

Stage 3: Post-Holiday: Sustaining Loyalty

Trust:

Consistency is the name of the game now. Once a customer returns, following through on post-trip promises, like loyalty discounts or exclusive offers, shows integrity. Likewise, addressing any post-holiday concerns promptly, with humility and humanity is crucial for building and maintaining trust. If a customer has not had a great experience, their trust with the travel company has already been damaged and this is the big chance to turn that around. You only have to read some of the 4 star TrustPilot reviews to see where this has been done well.

Simplicity:

The post-holiday phase should be simple and convenient. Requesting feedback through user-friendly surveys and offering easy ways to redeem loyalty rewards ensures a hassle-free experience.

Great Experience:

A memorable post-holiday experience can include personalised thank-you notes. Travel companies can remind customers of the things they did, when they did them, simply to bring back memories. If customers had a great experience on their holiday, this can provide talking points and memories, which stir up those desires to feel those reward centres in the brain firing up again.?

Using the customer data, leisure travel companies can follow up with recommendations for the next adventure, based on the type of holiday, type of resort and activities and experiences they had. These gestures keep the holiday fresh in the customer's mind and plant the seeds of the next holiday.?

Finally, if the leisure travel companies have a loyalty scheme to reward repeat customers outside of the standard discounts offered during seasonal marketing campaigns, these are the opportunities to showcase these benefits.

The major airlines have, for years, rewarded loyalty through tiered points schemes for frequent flyers. Cruise operators also do this relatively well with discounts based on nights spent onboard, with a tiered loyalty model and discounts both on the cost of the holiday and onboard spending. There is a huge opportunity for leisure travel holiday companies to explore this type of scheme.

Customisation & Personalisation:

Without sounding like a broken record (and if you’ve got this far, well done), but this can only be achieved through continued feedback and data. Continue to leverage customer data to offer relevant post-holiday offers and recommendations. Tailored content and loyalty programs that align with individual preferences enhance the sense of being valued. Leveraging ML, and if necessary, the toolbox mentioned above is the product team’s path to success in this space.

Communication:

Staying in touch with customers through newsletters, travel updates, and loyalty program announcements keeps the relationship alive. We all know that email open rates can be a challenge and in the mobile age where people’s lives are ruled by their phones, an app can be a good way of keeping in touch. Personalised communications can rekindle the excitement for future trips and remind customers of their need to get back to the beach.