Pini Yakuel, founder of relationship marketing platform Optimove, says challenger brands in the travel space can take on the big boys by personalising customers’ experiences.
It hasn’t been a great year for customer service in the travel industry. Customer experience ratings for airlines have dropped 3% this year, from 7.41 to 7.14 – according to research by KPMG Nunwood. Many airlines (and, more importantly their passengers) have faced a rough time recently, with the likes of Monarch, AirBerlin and Alitalia run aground this year, and BA forced to cut back on its free food service.
Yet for the airlines that survive the fiscal squeeze, poor customer service doesn’t seem to be having a strong effect on customer loyalty. This year Ryanair faced a PR nightmare when its suddenly-cancelled flights weren’t well communicated to passengers, leaving customers unhappy.
But despite the poor customer service, which many commentators saw as a sure sign of its decline, Ryanair has gone on to become the fifth largest airline on the planet.
And it isn’t just the airline industry that is seeing large players continue to grow. Last year 80 percent of all hotel bookings in Europe came through two websites: Expedia and Booking.com. Hotels, apartments and holiday lets, rented through aggregators or not, are under increasing threat from Airbnb, despite a slew of issues including guests discovering hidden cameras in their rooms.
The travel industry is increasingly becoming dominated by a relatively small group of big players, who often don’t pay a huge amount of attention to customer loyalty.
It would be easy to look at all this and draw the conclusion that customer loyalty is dead. And, in a way, it is. As commercial interactions move increasingly online, it is certainly easy to lose the human element, and large travel companies are winning customers through convenience and price rather than bespoke customer service.
But for challenger providers in this kind of market, emotionally-intelligent, personalised service that offers added value to individual customers is the way to survive and compete against monopolising travel giants.
In many ways, the situation is becoming increasingly similar to that in another industry: retail. Retailers on and off the high street are struggling against large online giants such as Amazon, who are carving an increased share of the market despite reneging on promises to deliver Christmas orders on time. Toys R US is the latest retailer to collapse in the face of its competition in the UK, and this has been in part put down to their lack of dynamism in selling online.
But to distinguish themselves against larger brands and keep customers coming back, many retailers are refocusing on how they interact with their clientele – turning to data-driven, emotionally-intelligent ways of communicating with customers in a personalised way. For instance, fashion retailer AdoreMe uses personalisation tools to target offers and promotions to customers that appeal to each individual, and have more than doubled their active customers in the process.
As large players and aggregators such as Booking.com begin to monopolise the market, challenger travel providers can take a leaf out of the book of retailers, to keep their existing customers from being drawn away.
With the wealth of customer data available to them, travel providers have an opportunity to manage their customer communications in a way that keeps consumers happy and offers the chance to up-sell to them. The key is personalisation.
Birthday rewards, for instance, are one of the best-performing personalised marketing campaigns. Keeping track of birthdays and offering promotions in advance will keep a brand in a customer’s mind, and appeal to them at a time they feel they deserve a treat. Retailers have found birthday campaigns to raise response rates by 85 percent.
And challenger providers can do more with data to target their customers than just remembering their birthday. Using data to find ideas for conversation starters that will engage each customer and keep them coming back.
Using key data to divide the customer base in different groups, specific promotions and rewards can be targeted to different types of customer, depending on their personal taste and how they respond, to find the best kind of offer for each person that keeps them coming back.
In both retail and travel, customer loyalty is not what it was. In an online world with less human interaction in customer service, customers are attracted and retained through a constant exchange of value. But when large travel companies neglect customer service, they reduce the value they offer to the customer, opening them up to competition.
The opportunity for challenger travel agents lies in finding what value means to each customer. Using data insights to adapt communications to different types of customer, these agents can compete with larger competitors by offering a distinguished, bespoke service that relies on data to adapt to customer needs, to suit each individual perfectly.