Last Call for the Travel Industry: Time to Boost Your CRM
The massive growth in travel-related businesses with the rise of super companies in the industry makes survival much harder. First step towards success: bespoke data based attitudePosted in Customer Retention, Data Analysis, Personalization on 28 December 2017 by:
You’ve probably experienced it this year much more than in the past. Airlines, hotels and travel apps are using data about your preferences to tell you exactly what your vacation should look like; where to go, when to fly, what to pay, whether to stay in this hotel or that B&B or if you should eat at that famous restaurant, and at what time it’s best to visit the Tower of London to avoid the lines.
The online travel industry is thriving. According to eMarketer, in 2016 online sales cumulatively generated 565 billion U.S. dollars, and are projected to grow to around 820 billion USD by 2020.
During this time, an unimaginable number of startups around the world have tried, and will continue to try, to take advantage of this trend and come up with new exciting business ideas. Anything from flights search to hotel deals and recommendation, from instant translation apps to timely currency converters, from location based recommendations that organize your trip in 2 seconds, to an app that will help you better pack your suitcase. From the familiar and useful to the unique and quirky. And everybody wants a share.
The growth in travel-related businesses over the last few years created another interesting phenomenon, when last year, for example, 80% of all hotel bookings in Europe came through only two websites: Expedia and Booking.com. Airbnb – the short-term lodging broker, is also overshadowing the industry, gradually threatening hotels and holiday rentals. Altogether, the picture is of a market increasingly becoming dominated by a relatively small group of big players, with tons of small players trying to keep up. And big players, by definition, don’t often have time to pay attention to the small customer.
That Customer Loyalty Thingy
You’ve heard it more than once - customer loyalty is probably dead. Let’s examine that argument for a second: 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. The small, individual customer becomes irrelevant, because the larger companies can afford to be more competitive in other aspects.
Only one problem though – small customers matter. A lot. As small companies continue to compete against giants, the way to survive is to create a market that is emotionally intelligent, personalized, and offers added value to the individual. It’s always been important to foster customer loyalty, but in today’s world, it may very well be what draws the line between success and failure for some businesses. Customer loyalty can make the difference
Customers have tremendous power to choose the vendor or the brand that delights them the most and caters to their needs. And as time goes by we can no longer say “loyalty is a nice to have.” Now, loyalty is a necessity!
Down to Basics
In many ways, the situation is becoming increasingly similar to that of the retail industry. Retailers today struggle against the online giant Amazon, who devours an increased share of the market. To distinguish themselves against Amazon and keep customers coming back, many retailers are refocusing on how they interact with their clients – turning to data-driven, emotionally-intelligent creativity-fostering business, looking over their customers in a personalized way. Several of these retails, of which many use Optimove, use personalization tools to target offers and promotions to customers that appeal to each individual, helping them increase their profit in the process.
As large players and aggregators such as Booking.com begin to monopolize the market, challenger travel providers can take a page out of the retailers’ book, and learn to keep their existing customers from being drawn away. With the wealth of customer data at their disposal, 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. Personalization is key.
Birthday rewards, for instance, are one of the best-performing personalized marketing campaigns. It may be a trivial example, but it’s something that the travel industry has not yet embraced fully. Adding the personal touch works like a charm, and shouldn’t be ignored, at any level.
Ignite the Competition
And businesses can do much more with data to target their customers than just remembering their birthdays: Using data to find ideas for conversation starters can engage each customer and keep them coming back. Using key data to divide the customer base into different groups, specific promotions and rewards can target different types of customers. Depending on their personal taste and how they respond, using data alongside these retention tactics can find the best kind of offer for each person to keep them coming back.
In both retail and travel, customer loyalty is not what it was. In an online world with less human interaction, customers are attracted and retained through a constant exchange of value. When large travel companies abandon customer service, they reduce the value they offer to the customer, and invite the competition in.
The opportunity for contender travel businesses lies in finding what value means to each customer. By using data insights to adapt communications to different types of customer, these businesses and endeavors can compete with larger players and offer a distinguished, bespoke service, that suits everyone perfectly.