Travel firms can use understanding of human behaviour to guide reticent consumers looking for reassurance to making purchases, the Travolution Summit was told.
Ben Stirling, managing director of Webloyalty, which works with e-commerce brand on loyalty and retention strategies, said behavioural economics can help firms achieve their targets online.
He said there have been over 200 natural cognitive biases identified in humans and urged firms to decide which are relevant to their businesses and the outcomes they would like to see.
“Understanding what drives behaviour when you’re looking to increase things like your conversion rate or retention rate is really important.
“By making small adjustments that are aligned with how we naturally behave as humans is going to create better outcomes for your business.
“The most important thing is to really reflect on which bias is going to create the behaviour that is most desirable to you.
“This really is like a reverse engineering process in which we decide what we want to optimise for and then what type of biases will lead to that type of behaviour.”
Stirling said high value purchases, like holidays, can be challenging for consumers so the information they need must be offered in concise chunks to make the process simple.
And he said in the current market when dealing with potentially sceptical customers due to the perception of risk the information must be framed with messages of reassurance.
“If it’s framed in a way that stresses free cancellation, it makes that decision much more likely to happen.
“This is really important because in the current market research has shown consumers have money to spend but it…mitigates the risk and therefore increases conversion.”
Other biases Stirring picked out as powerful in travel is personalisation, or tailoring product to demands, a feeling of scarcity that increases desirability and ‘goal gradient’, or tiered rewards.
“Consumers really respond well and tend to then reciprocate when they are actually given something or they are rewarded for their behaviour. Building in reciprocity can be very powerful in the right situation.
“It isn’t always financial, you don’t have to give anything away in order to create behavioural reward. It is simply by helping people reach that next stage and reminding them how close they are can encourage the motivation and desirability to reach that next level.”
Stirling added: “Think about what is important to your business from a retention standpoint, what behaviours would enable you to retain customers longer.
“Perhaps in this market, you have seen actually it is more important than ever that we are keep our existing core consumers and therefore what biases will enable you to do that, that aligns with then natural human behaviours.
“There is a huge wealth of opportunity for behavioural economics within travel organisations. Approach it as a collection. We’ve only covered a handful of the 200, so take a look at what could be more impactful for you. Maybe there’s a golden nuggets that isn’t utilised.”