This is a guest comment by Comarch’s Julian Bonnett
Discount deals serve as a good "catch-all" solution, and they don’t require much thought beyond assessing affordability for the firm.
Yet there are much more impactful ways to win a customer’s loyalty. People know that getting a cheap deal now, doesn’t mean they’ll get a good deal from the firm next time. Those who are focused on the price point will often eagerly seek a better deal elsewhere if available.
In fact, price may not have as much sway on consumer loyalty as some think. One survey of UK consumers showed that just 4% viewed getting the cheapest price on a holiday as the most important factor in booking a trip.
Developing loyalty isn’t about bombarding people with deals and discounts, but about creating a connection.
Research by Barclays revealed that three in five Britons said that the most significant deciding factor in choosing where to stay was the opinion of existing customers. So keeping guests happy during their stay doesn’t just effect their own feelings of loyalty, it influences the opinion and potential loyalty of others.
To get visitors to make repeat bookings, airlines and hotels need to focus beyond a low price point and get to what really matters – people. What they think, and how the business makes them feel.
What makes people return for more?
Loyalty is about more than points or money, especially when you’re looking at infrequent purchases. It has to come down to experience. What does being a part of "the club" give you that no one else has?
Developing loyalty isn’t about bombarding people with deals and discounts, but about creating a connection. People develop loyalty through emotions and habits. When you’re dealing with a big purchase – like a holiday or a flight – we’re presented with many options. Why should we book into the same hotel chain in New York as we did in Florida? What makes us decide to catch a red eye flight with one operator, rather than fly with its rival at a decent time?
Loyalty is a human principle; as such it’s strongly tied to emotion and psychology. Developing loyalty requires getting to know individuals.
It’s not enough to simply have a loyalty programme. It needs to be one that people actually use, which means the benefits have to be tailored to suit each customer as an individual, rather than a generic offering that may have tested well in research.
A successful programme needs to treat people as individuals and include "surprise and delight" elements. For example, an upgrade for a first time visitor or a free massage before a long haul flight. For others it may not be the occasional upgrade on one of many work trips that they value most. It may be the opportunity to take their entire family (and not just the standard plus one) through fast track security and into the lounge on their annual family holiday. By understanding customers, these elements can be tailored to the individual making them even more valuable to customers.
Integrating partners to a programme increases the options, and lets you provide a personalised service to guests. This is particularly important when purchases are high value and infrequent – the purchase of a holiday, for example, or leisure flights, or a hotel stay. Rather than leaving chocolates on pillows, or providing a free wine hour for guests, a hotel could look at the individual customer’s stated interests. One guest may say that they like fine dining – if the hotel knows this, it could leave a gift card for a local restaurant as a gift for the guest on check-in. This shows the guest that the hotel isn’t using the loyalty scheme as a way to simply get more money out of them; it actually uses what it knows about its customers to provide a higher standard of service.
Loyalty is a human principle; as such it’s strongly tied to emotion and psychology. Developing loyalty requires getting to know individuals and providing them with the perks, benefits and surprises that they want. It’s much more effective than applying the same benefits to everyone.
Julian Bonnett is business development manager at Comarch