The digital world has permanently changed the relationship between travel brands and their customers. As a result, the traditional loyalty program model appears to be failing to meet the demands of the next generation of travellers.
As McKinsey points out, traditionally, reaching the top tier of a loyalty program was a goal for many traveller’s identities. Now, many loyalty program members seem more inclined to play the field. Faced with fierce competition and a rapidly changing landscape, travel brands must now innovate or risk getting Ignored at the terminal.
Loyalty that takes flight
Some experts predict that the future of loyalty might not look like an allegiance to a single brand. Instead, it will look more closely like a ‘choose your benefit’ or an à la carte service, offering flexibility as a perk. Loyalty members who traditionally remained loyal to one carrier in efforts to gain status and earn upgrades may no longer see a reason to spend thousands of dollars to reach the “exclusive” next tier.
This especially seems to be the case with younger travellers. A recent Morning Consult study found only 46% of Gen Z travellers said it was “absolutely certain” or “very likely” they would patronise hotel brands in whose loyalty programs they were already enrolled.
It suggests travel brands would benefit from a more open-minded approach to customer acquisition and retention. One that would see them focus less on increasing loyalty membership for its own sake and more on earning travellers’ trust.
AI to replace the white-glove treatment
AI has levelled the playing field for travel and hospitality companies. In the pre-internet days, the highest levels of service came from up-market brands that could afford to provide the white-glove treatment.
Now, at every level, brands can communicate in ways that their customers feel most comfortable. That’s not only creating better traveller satisfaction, it’s also driving innovation faster across the entire industry.
As our Head of Generative AI at Amperity, Joyce Gordon, says, “Brands with a good data foundation will be able to use generative AI and create personalised experiences that will quickly become ubiquitous, and they’ll shape customer expectations.”
She believes we’ll see a lot of rapid innovation in the GenAI space over the next two years. It will likely be even faster than previous paradigm shifts we saw with internet, e-commerce and mobile adoption.
As Gordon notes, travellers don’t care about a company’s data program. They care about:
- Finding the right information at the right time as they plan their travels
- Enjoying a seamless travel experience in the moment
By using all the data they have at their disposal, especially first-party data, brands can build direct relationships with a much wider base of customers.
“Brands can offer authentic experiences if they use your first-party data,” says Gordon. “If a brand has purchased lots of third-party data about me and I’ve never been to their site and now suddenly they know all of these things about me, that feels creepy. It’s like going on a first date with someone who has obsessively researched your social media pages beforehand. But if I’ve shared this information with you in the past, and if you use it well, it’s almost a relief.”
Here’s how travel companies better leveraging their customer’s data is likely to work in practice.
5 Ways GenAI Will Support Future Travel Experiences
- Personalised bookings: Given a generative AI-powered chatbot assistant vs an open-ended search bar or filtering tool, travellers can react conversationally to suggestions, feeding more data back to the booking engine to create better and more specific recommendations.
- Ancillary offerings: Suggest the right add-ons based on real-time interactions and past preferences.
- Automated creative generation: Of all the possible images and descriptive information a brand has on file, generative AI can respond to interactions with the user and serve up the options that will resonate best.
- Customer insights and recommendations: Understand customer action patterns and give real-time recommendations for when customers want to redeem loyalty points, upgrade, etc.
- Simplified technology: How brands ask questions about their data will radically change, becoming more natural language-driven vs. code-based.
The future of travel is here – and it’s personalised
In the world of predictive search, social media feed algorithms, e-commerce recommendation engines and now GenAI, travel companies need to step up and provide similar levels of service.
With the tools available to aggregate and activate traveller information into a CDP (customer data platform), travel brands can create truly personalised relationships with their customers.
Getting started is easier than it seems. Because there’s so much data out there, there’s a temptation to think big and try to boil the ocean. By starting with what they have, travel companies will realise they have a lot to work with.
They can use customer data to make better business decisions, such as:
- Optimising their pricing strategies
- Developing new products and services
- Targeting their marketing campaigns more effectively
This can lead to increased revenue and profitability.
The most exciting part of building a solid customer data strategy today is its potential for tomorrow. The physical and digital worlds are continuing to blur. The ability to connect data intake and analysis to reflect this reality will give travel brands a significant advantage in their ability to serve their customers of the future.
Recommendations
Optimise your customer data initiatives to achieve the goals below:
- Build out first-party data collection. Expanding privacy restrictions are making it harder to use data provided by third parties, which comprise most of the customer data travel brands have today. Brands that evolve their data strategies and focus on first-party data will have a huge opportunity to provide better service using information they’ve received directly from the customer.
- Reach beyond loyalty members. Combining data from loyalty programs with other sources helps to better understand each customer. It will effectively reposition “loyalty” around the person instead of the program. By targeting customers with the greatest potential value – in the moment and over a lifetime, regardless of status – brands can start to formulate a more accurate foundation for their customer data and personalisation strategies.
Build a unified view of the traveller. Brands can now utilise platform technology that breaks down silos and collates data together into a unified view of each customer, which will enable them to develop detailed customer profiles and support personalisation efforts.
Amperity delivers the data confidence brands need to unlock growth by truly knowing their customers. With Amperity, brands can build a unified customer profile foundation powered by first-party data to fuel customer acquisition and retention, personalize experiences that build loyalty, and manage privacy compliance. Using patented AI and machine learning methods, Amperity stitches together all customer interactions to build a unified view that seamlessly connects to marketing and technology tools. More than 400 brands worldwide rely on Amperity to turn data into business value, including Alaska Airlines, Brooks Running, Endeavour Drinks, Planet Fitness, Seattle Sounders FC, Under Armour and Wyndham Hotels & Resorts. For more information, please visit www.amperity.com or follow us on LinkedIn, Twitter, Facebook and Instagram.
