APAC travel brands are driving loyalty by improving their product offering versus creating membership programs, according to Expedia Affiliate Network (EAN) and Points’ new Travel Loyalty Report: A wake-up call for sleepwalking loyalty programs.
The report assesses the state of customer loyalty in the travel industry across multiple geographies and travel sectors, from airlines to OTAs to loyalty companies. It highlights that despite widespread doubt in their efficacy, discounts and coupons are still the most popular tactic for driving loyalty worldwide: 61% of all survey respondents admit to relying heavily on them (rising to 72% in Brazil). Awarding points and miles is used by 52% of respondents, rising to a peak of 82% in the UK.
In APAC however, just 24% of respondents are using points and miles to drive loyalty and 26% of APAC respondents are not offering a loyalty program at all. This trend differs from other regions that invest heavily in member reward schemes Ð 100% of those surveyed in the US and UK and 96% in the Middle East.
Globally, 71% rate Ôquality of offering’ the greatest impact on loyalty, while customer experience and an improved breadth of product and service offering are also valued above discounting methods. Despite this, there seems to be a distinct gap between insight and action, with only half of respondents citing that they are actively working to improve their product range and customer experience, and even less (33%) to improve their breadth of product and service offering. This differed in APAC regions, however, where 80% of respondents from China say that an improved product offering has been the driving factor behind recent increases in customer loyalty. A higher percentage of respondents from the APAC region say they would invest in continual improvements in product offering to drive loyalty in the future.
Ariane Gorin, president, Expedia Partner Solutions says: ÒToday’s savvy travellers are looking beyond price as they choose their preferred brands. To drive loyalty, travel companies need to look beyond existing solutions like discounting, vouchers and points schemes. Lasting loyalty will be won by companies who really tune in to consumer expectations, deliver a diverse product offering and invest in superior user experiences.Ó
Stuart MacDonald, vice president and general manager, Points Travel agrees: ÒUltimately, the key to winning loyalty is still winning over the customer, and as the survey shows there’s still great value in loyalty points and miles, which remain a top loyalty investment worldwide. There’s a reason why the investment in such programs remains so high. Efficiently leveraging proven loyalty tactics Ð coupled with emerging innovation and data science Ð continues to drive effective results. Points Travel empowers loyalty programs to drive additional member engagement through rich points offers and additional redemption opportunities on hotels and cars worldwide.Ó
Gorin continues: ÒIn Expedia Group’s affiliate business, we have helped hundreds of affiliate partners increase customer loyalty by expanding their product offering through access to our global rates and availabilities for travel products. In addition to our supply, we provide partners with best-in-class technology tools, built from Expedia Group more than a billion dollars in tech investment every year. The combination of supply, technology and account management helps our partners grow their businesses by increasing customer loyalty and engagement.Ó
Other key findings presented by EAN and Points in ÔTravel Loyalty Report: A wake-up call for sleepwalking loyalty programs’ include:
The highest percentages in loyalty gains come from respondents in France (94%), China (90%) Brazil (88%) and Singapore (86%). Conversely, the lowest percentages in gains come from Japan (70%), Korea (71%) and the US (74%).
While the figures point to overall health in loyalty with 84% of respondents stating a growth in loyalty over the past two years, the majority of survey respondents cite external factors such as a stronger economy (70% overall, 88% in the UK and 71% in China), increased marketing spend (72% in the UK and 73% in Japan) and changing customer demographics, as the key to their loyalty gains.
Only half of the respondents cite that they are actively working to improve their product range and customer experience and even less (33%) to improve the breadth of their product and service offering. This is remarkably different in the APAC region, where over 50% say that they expect loyalty to increase due to continual improvements in their product offering.
Optimism is particularly high in China where 94% of respondents expect customer loyalty to increase in the coming two years and 88% say that they are planning to increase investment in loyalty-boosting initiatives in 2018.
Even though new ideas like personalisation and gamification are believed to be effective, particularly in the airline industry, very few companies are actually doing it (30% and 57%, respectively). A higher percentage of APAC countries cite gamification to be an effective method in driving customer loyalty, rising to a peak of 75% in Korea.
The survey also reveals that there is relatively little consensus on how to measure loyalty, with few respondents taking a comprehensive approach. The most popular measurement tactic overall is social sentiment (61%), but there are significant regional differences: social rises to a high of 80% in the UK, but plunges in parts of APAC, falling to 34% in Korea and 30% in Japan.
The report can be downloaded at bit.ly/travel-loyalty-report and in Chinese at https://www.ean.com/zh/travel-loyalty-report
