In today’s connected world customer loyalty strategies have undergone a significant evolution to meet the changing needs and expectations of consumers.
Once dominated by strategies involving coupons, gifts and air miles, loyalty programs were initially designed to reward repeat customers with discounts, flights and freebies.
Historically, these loyalty programs played a pivotal role in influencing traveller behaviour, offering aspirational rewards to frequent customers who respond by buying more and strengthening their relationship with the brand.
The sun is rapidly fading on yesterday’s loyalty strategies
In more recent times, shifts in strategy have seen some brands prioritise revenue generation over customer experience, leading to a decline in the perceived value of these programs. The resulting drop in loyalty program participation, from 66% in 2019 to 52% in 2023 according to research from Airport Dimensions, indicates a growing disconnect between travel brands and the expectations of modern travellers. The gloss has rubbed off and they simply aren’t relevant enough to the needs of today’s tech savvy, well researched travellers who value convenience and autonomy, and who want a great travel experience personalised to them.
Loyalty programs among travel brands must evolve, as retail has done, into sophisticated digital platforms by using advanced technologies to personalise rewards, engage customers and develop long-term brand loyalty.
Digital platforms, apps and social media have transformed the way customers interact with travel brands, and loyalty programs must move to stay relevant. Travellers expect brands to recognise their loyalty, understand them and anticipate their needs with personalised experiences across every touchpoint.
The opportunities of new tech to recast relationships with travellers
Today’s loyalty programs must take advantage of new technologies and data analytics to offer customers more. This new technology enables travel brands to tap into customer emotions by creating meaningful connections with offers that engage and resonate with customers’ preferences and values.
Mobile apps and the rise of more digital forms of mobile connectivity such as eSIMs have further transformed loyalty programs and allowed travel brands to integrate their offers directly with customers’ smartphones. This has not only facilitated a greater personalisation of offers but also increased engagement levels. Travellers now want a transparent value exchange, relevant and timely interactions, with personalised offers wherever they are. They want it all in a convenient, easy-to-access and omnichannel loyalty offering.
Personalisation through AI and data analytics is one of the most significant trends in the evolution of loyalty programs and travel businesses need to leverage data, coupled with advanced analytics and AI, to tailor their offerings to individual preferences.
Dovetailing loyalty with a pervasive traveller experience
Seamless integration with the traveller experience is a key loyalty strategy. It means that programs are integrated into the traveller’s purchasing journey, with offers on tours, car hires, restaurants and so on and it enables daily interactions with the travel brand. This approach helps to make loyalty programs more relevant and timely, increasing their usage and effectiveness
These strategies are shifting toward more dynamic, integrated and connected approaches to customer loyalty, rewarding it with exceptional value.
By adopting cutting-edge technologies such as AI, data analytics, and mobile integration, loyalty programs can deliver personalised, seamless experiences that cultivate emotional connections with travel brands. Continued connectivity enables brands to upsell and cross-sell core products from across their portfolio. Crucially, they can penetrate into in-destination products and services, which for many kinds of travel providers would otherwise be impossible. This approach not only meets the immediate needs of travellers but also builds a foundation for long-term loyalty by integrating seamlessly into the lifestyle of the modern, connected traveller.
The travel industry is navigating through a period of significant change. By focusing on personalised experiences and leveraging new technologies, travel brands can create more meaningful and enduring relationships with their customers, ultimately leading to increased loyalty and reduced acquisition costs. The future of travel loyalty lies in the ability to stay relevant and responsive to the evolving needs of travellers, making connectivity a crucial element in the equation.
