How Personalized Travel Is Changing Customer Loyalty
What is customer Loyalty?
Customer loyalty is one of the crucial drivers of the modern travel ecosystem. Loyalty programs are constantly evolving and innovating to add more value to customers in the form of rewards. With the rise of the new-age digital generation, the overall interest in travel is high and these tech-savvy travelers are eager to engage with loyalty programs for their personal benefit.
The ability to transform a single purchase into multiperiod decisions is what determines customer loyalty for a travel brand. This also dictates how much you should spend on customer acquisition.
Today’s loyal customers will reward brands for personalized engagements and benefits and are more likely to remain loyal to a brand that offers personalized experiences.
Benefits of personalizing your travel club to increase customer loyalty
From the brand’s perspective, personalization translates to robust customer profiles and deeper insights to yield a much higher ROI. Personalization done well leads to higher revenue growth and about a 6.4x increase in member satisfaction. (Source)
Having established that personalization is crucial for travel businesses, let us have a look at key benefits of personalizing your travel club for incredible business growth –
- Increases User Lifespan –Personalized offers can drive greater ROI. According to research, 86% of consumers say that personalization influenced their purchase decisions while 40% made unplanned and expensive repeat purchases because of personalized service. (Source) Further data suggest that personalized communication have higher click rates. Sending a personalized or auto-fill email and other notifications can greatly impact your travel club communications. About 52% of customers agree that they will find somewhere else to shop if the email is not personalized. As we all know, a longer user lifespan is just higher revenue for your business. (Source)
You can further encourage repeat purchases and drive more revenue by sending personalized referral codes via email, SMS or other push notification. Using individual data for sending personalized offers and rewards will encourage customers to ear more rewards and continue their participation.
- Improves Connections with End-Users –Personalization adds a special touch by fostering emotional bond that strengthens brand loyalty for travel club members. By incentivizing existing members, travel brands can reduce acquisition costs and increase customer retention. About 69% of customers agree that ‘special treatment’ is important to remain loyal to a brand. 59% of online shoppers who belong to the loyalty club say that receiving personalized treatment or offers that are unavailable to non-members is important to them. (Source)
- Increased Loyalty Program Satisfaction –Valuing and adding personalization will make your travel club offerings even more effective. Understand that driving relevance for each customer is the true objective behind personalization. The right mix of exclusivity and personalized engagement will make customers feel like you know them by delivering value to them again and again. Your satisfied customers will make 90% more purchases and spend 60% more per transaction. (Source)
- Easy Segmentation – Customer segmentation provides brands with control over interactions across customer journeys and recognizing who the individual customers are/ what they want/ how you can meet their needs. Personalization in travel club help segment customers according to their purchase value, genders, age groups, etc. to separate your best customers from average ones. By identifying your high-value assets or those with the highest ROI potential, you can better target your VIP customers.
Here are a few ways to effectively segment your travel club offers to customers –
- Activity-Based – You can offer a reward for reviewing your brand or recent product they purchased, send a discount coupon to browse new offerings or incentivize feedback and referrals.
- Characteristic-Based – You can create a VIP tier for your exclusive customers, offer a milestone or yearly reward to celebrate their relationship with your brand or simply send a promotional offer to the targeted area and accelerate your marketing efforts.
Segmentation can also be created to identify idle users and encourage them to shop or simple tasks such as in-app actions, complete sign up information and check out new reward offerings.
- Gather Valuable Insights –Having a personalized travel club already makes you in possession of valuable customer data that allows you to reach larger demographics with relevant campaigns. Customers are willing to share data and they expect brands to put it to good use.
- At a high level, personalization enables you to gather and aggregate data about the customer and their personal preferences including things like website behavior, geolocation, purchase history and engagement with your brand to send highly personal and targeted offers. A travel club equipped with the right tools and software will ingest demographic, behavioral, contextual and transactional data from any touchpoint to create real-time interaction profiles as well as identify areas of improvement.
What is Customer Lifetime Value? What is its formula?
Offering personalized experiences is a powerful base to build upon to increase Customer Lifetime Value (CLV). This enables brands to encourage repeat purchases in VIP or high-value customers and increase revenue from less valuable customers while improving the overall customer experience.
You can calculate Customer Lifetime Value with this simple formula:
The most frequent travelers are millennials and GenX who join loyalty program primarily to save money and earn member-only perks. The younger the generation, the more interested they are in earning and redeeming rewards. About 67% of customers say that they are willing to pay more for a great travel experience. Consumers prefer personalization as a standard of service and it gives a 6.4 x lift in member satisfaction with the loyalty programs.
About 53% of consumers in the US participate in a loyalty program for ease of use. The enrollment in loyalty programs has grown by 31% over the last four years with nearly 3.8 billion memberships holders in the US.