What the Travel Industry Shows Us About Customer Loyalty
For companies in every vertical, building customer loyalty is always of the utmost importance. But without incentive, customers have no reason to be loyal.
Incentive can come in the form of high-quality products, desirable promotions and discounts, or loyalty programs.
The Digital Consumer considered Jumpshot data from the travel industry to better understand how loyal travel shoppers were to particular brands. Let’s see what the data teaches us.
Your Customers Aren’t as Loyal as You Think They Are
We tracked U.S. hotel shoppers using sites like Best Western, Marriott, Booking.com, Expedia, and others to see if they booked with another hotel site or an Online Travel Agency (OTA) for subsequent purchases.
Customers of hotel brand websites were 80% more likely to purchase from another hotel site or OTA rather than the site they’d booked on before. Those booking air travel were 77% more likely to purchase from another airline or OTA than consumers who didn’t reserve a flight in the same time period. And frequent travelers (those who booked 3 or more flights or hotel stays in the quarter) were 40%+ more likely to book with a competitor site or OTA than infrequent travelers.
So where you would expect these travel shoppers to be loyal to brands they’ve booked with before, it seems like their travel needs (which we presume includes prices, itineraries, and location) trumped loyalty.
If you want your customers to be loyal long-term, you’ve got to give them a reason to be. Knowing your customers and what factors matter in their buying process will help you create the most relevant incentives to boost loyalty and repeat purchases.
You Don’t Have Exclusive Rights
A common theme in the data we glean across industries is that brands are selling, just not solely on their own websites.
In our travel industry data, only 1 out of 10 visitors booked hotel stays on the brand’s site. Thirty-two percent booked a stay from another chain or OTA. So a Marriott customer might have booked her last stay on Marriott’s website, but for this trip, she uses Travelocity to book a Marriott room.
The data was synonymous across hotel chains and airline carriers as well; no one escaped this behavior.
Traveler marketers are competing with other brands, but they are also competing with on OTAs and metasearch sites, which may ultimately help them reach more customers. Maybe this means offering discounts on some channels or upping spend with the right partners to acquire more traffic, but ultimately, knowing this pattern could help to capture a larger market share.
Frequent Shoppers are More Likely to Comparison Shop
In the travel industry, hotel shoppers who booked three or more times in Q3 of 2017 were 46% more likely to switch hotel brands or book a stay through an OTA. For airlines, frequent travelers were 43% more likely to book with competitors or an OTA.
We can glean that those who travel more are more attuned to finding the best deals. If you extrapolate that data and apply it to your own industry, you can assume that frequent shoppers do the same. The trend is the same for both hotel and flight bookers.
What reason do shoppers have to be loyal to your brand? If you can’t compete on price, there better be something else that entices them to come back and buy from you again.
A Word on Customer Loyalty
The loyalty game has upped its ante in every industry over the years. The travel industry is a great examples. Airlines and hotel chains like Hilton are continually offering more perks as a means to drive customers to make them their exclusive brand of choice.
But remember that loyalty isn’t always about pricing or freebies. An Epsilon study on customer engagement and loyalty found that 80% of consumers are more likely to do business with a brand that offers personalized experiences.
Personalization can be applied to promotions, marketing messages, and loyalty programs. When your customers feel like you value them and that you’re speaking directly to them, they feel a connection with your brand.
This travel data shows that customer loyalty isn’t a given. You have to fight for it by providing reasons for customers to return to your brand.