Guest Post: Targeting your customers through bespoke segmentation

By Ivan Fernandes, planning director of Underwired

Consumer marketing in the travel services industry has rarely been ahead of the curve. Travel consumer experience today has evolved into a much more sophisticated operation than when I started out in the late nineties.

Marketers in the travel industry are under pressure to help deliver sales in a sector that has traditionally taken a short-term view, rather than developing a long-term strategy.

With new entrants in the travel market disrupting the status quo, most travel companies are facing a sharp increase in customer churn rates, resulting in eroding market share and revenues.

At a time when the travel market is so competitive, what possible growth is there for the travel industry?

Focus on customer needs

Marketing is about anticipating and identifying the wants and needs of a target market of consumers, then satisfying those needs in order to make a profit.

Recent research from Expedia[1], found that half of millennials find loyalty programmes important when booking flights (48%) or hotels (51%), while only three in ten of travellers aged 46 to 65 (31% and 30% respectively) felt the same.

Therefore, in order to become ‘future proof’, travel companies need to be more nimble and responsive to market demands to develop communications that address “real customer needs”.

For example, incorporating social media in a communications strategy will enable them to track any discussions on their product as well as those of their competitors.

Input from social media adds further insight, to complement all future customer strategies. Also, building collaboration with the customers into all their new product development ensures that all new products will reflect customers’ need.

Focus on customer strategy

Travel companies always need to improve their focus on customer retention by identifying the factors that lead to attrition.

According to research from Euromonitor International[2], “the trend in travel is increasingly towards dynamic packaging, with consumers surfing the internet and customising their search criteria to combine low-cost airline tickets with special online offers for hotel accommodation either individually or through tour operators/travel agents.”

Travel companies should aim to develop new acquisition and retention techniques beyond short-term promotions, price discounts and gimmicky advertisements to attract more customers, thus increasing the focus in targeting and retaining the most profitable customers with customer centric communications.

Attracting a new customer can cost five times as much as keeping an existing one, so travel companies need to pay as much attention to retention as they do to acquisition.

Focus on customer data

Although most travel companies sit on huge amounts of travel customer data, it is usually siloed and under-utilised.

They need to increase their efforts to pull together all the relevant sets of data and combine transactional data learnings with demographics and trip preferences to maintain a great customer base.

Travel companies need to make the most of existing customer data (booking behaviour, destination, customer live time value, communications responsiveness etc.) to develop deeper insights into customer needs from their own customer engagement.

Travel companies that deliver the best customer experience advance against the competition, because they begin with their target customers’ priorities and expectations.

Focus on different segments

While travel companies look to transform themselves, they also are faced with focusing on different customer segments.

Travel industry growth can be enabled in many ways, yet most travel companies still focus on the most traditional ways – whether its sales, new products, new markets, mergers and acquisitions, etc.

Today’s travel leaders must be segmentation advocates – allowing their staff to source blazing new segmentation paths and having the courage to see them all the way through to the end.

Travel segmentation can enhance targeting, differentiation, and positioning, which are all key components in effective travel sector communications.

Focus on the message

The days of making a few encouraging communications, unsegmented and unpersonalised and then crossing your fingers for a sales uplift or shift in terms of brands metrics are gone.

Travel companies need to be prepared to build a consumer dialogue that adds value, wherever it takes place. Rather than repeating messages across several platforms, travel brands should deliver a sequence of messages in different channels, shaped by customer insight.

Also focusing on their customer message and how this message should be told differently through customer touch points, which is vital in today’s society.

The goal should be developing a multi-channel integrated marketing communications, which provides a targeted, continuous, relevant end-to-end customer journey.

The explosion of the internet, and its associated digital platforms since the turn of the century has disrupted the travel industry and transformed the way that we plan, book and experience travel.

Travellers are demanding more personalised experiences and modern travel companies need to compete more for their business.

So for travel companies to achieve a higher retention rate they need to be focusing on their customers’ increased intelligence in order to gain insight on customer travel habits and preferences of every person entering the sales environment.

[1] Expedia Research;
] Euromonitor International

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