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Does Loyalty Matter in the Travel Industry?

The true impact of building a dedicated base of customers.

In the travel industry, loyalty is the most important commodity. More people are wanting to explore the world than ever before – studies found that millennials especially are prepared to spend $5,000 traveling. So, taking advantage of these eager audiences is in the best interest of travel companies. But how can they utilize loyalty to benefit both themselves and the customer – and how can they learn from other industries?

Travel Loyalty Schemes are First Class

The travel industry does reward loyalty through VIP schemes. Airline miles for travelers who take multiple flights can be one of the most lucrative loyalty schemes. American Airlines, for example, makes it easy for fliers to earn these points, so they’re more likely to choose them out of a range of competitors. However, some people do criticize the fact that there isn’t a chart of awards for most of the major airlines. In fact, they charge whatever they feel like for the Airmiles redemptions and those on the scheme must accept it.

Budget airlines develop loyalty in different ways. They cultivate loyalty through affordable flights but often charge money elsewhere, such as on warm tap water. Many customers who are prepared to ‘rough it’ for the experience of traveling on the cheap are happy to take the conditions for the cheaper prices. Positive experiences on flights are more likely to accrue informal loyalty, so customers may act as unofficial ambassadors to family and friends, extolling the virtues of flying budget.

Some travel agents also operate a loyalty scheme. These may not be through points gained when you spend but instead focus on giving a discount on future holidays. Making money in the present for a future holiday is better for them and it can also make your trip cheaper. So, they bank on the loyalty built up over a successful transaction

Sometimes loyalty in travel isn’t as intensive as that. Northern Rail in the UK occasionally run 10p ticket months – whereby any trip on their train line is 10p for the month. This is almost like a free trial and allows people to test the train line as they make small trips they otherwise wouldn’t have done. The positive feeling for the train line then builds up to ensure they are considered when customers need to actually make journeys. It also helps give them a taster of the train experience to eliminate any myths that might have built up about the brand.

What Can Other Industries Teach About Maximizing Loyalty?

The travel industry can look at other industries to see how they are attaining customers and using loyalty as part of their business plan. With so much choice for most things across digital entertainment and retail, finding loyal customers is a huge feat. What can these industries teach travel about using loyalty to gain higher quality customers?

The online casino industry also utilizes a VIP loyalty program, so that each game played earns the player points. Some of the benefits of VIP casinos include better bonuses, invitations to events, and personalized customer service. These schemes are in place to help those who enjoy betting gain something from their loyalty to a site, such as faster payout times. They also allow the site to show goodwill to the player and show how valued they are as a customer. The industry is extremely competitive so utilising loyalty is a good way of bringing customers onto the site and wowing them once they are there. The travel industry could learn from this by attracting customers with an offer and then showing them why they should stay with the provider.

Even supermarkets employ loyalty schemes to ensure that customers remain loyal. The Nectar scheme in the UK is one of the most prolific with those on the program being able to earn points at a variety of retailers, including eBay, which they can then redeem and spend as cash later on. If a customer has to decide between two similar supermarkets or retailer, then the one who might give them more ‘bang for their buck’ is likely to be chosen. In 2018, Sainsbury’s took over the Nectar scheme and overhauled it to properly reward loyalty to compete with the Tesco Clubcard.

The travel industry relies on loyalty. From where people book to visit and who they travel with to the clothes they wear while there, everything is based on who customers feel has earned their custom. Treating customers well can come back to pay dividends for travel companies later on – which other industries can attest to.

Filed under: Travel Guide

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