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Forrester sees plunge in brand loyalty among online leisure travelers in US
Tuesday December 9, 2008News from Travel Technology Update: Brand loyalty among U.S. online leisure travelers is disappearing into the mists, according to the latest study from Forrester Research.
The percentage of U.S. online leisure travelers who consider themselves brand-loyal has plunged by 19%, from 31% in 2006 to 25% this year, according to Forrester's North American Technographics Retail, Travel, Customer Experience and Financial Services Benchmark Survey, Q3 2008.
In a report on the study, authors Henry Harteveldt, vice president and principal analyst, and Elizabeth Stark, researcher, offer five reasons for the nosedive:
- Generic products or experiences. Half the travelers say there is so little difference among products that the travel company they use matters less than getting the lowest possible price.
- An abundance of travel product and booking options. Eight airlines can get you between Dallas and Fort Lauderdale. Expedia offers nearly 80,000 lodging options.
- Few incentives to become loyal. If you're not a frequent traveler, you don't view frequent traveler programs as relevant. Few travel companies seek to create relationships with infrequent travelers.
- A wealth of user-generated content. Travelers are no longer relying on the guidance of travel suppliers.
Before they disappear completely, brand-loyal leisure travelers should be cherished and wooed anew, the report says.
More than half of U.S. online brand-loyal leisure travelers are college-educated, compared with 43% of all leisure travelers. Seven in 10 brand-loyal leisure travelers are married, and one in three has children at home, so you get them and their offspring.
They are also successful -- 47% have an annual household income of more than $100,000 -- and 65% are bookers--15% more than all U.S. online leisure travelers. They belong to multiple loyalty programs, so don't count on fidelity. They like booking online.
They also participate in social media as much as any travelers, which can be a boon or a bane for travel marketers.
The report offers suggestions on how to revive loyalty:
- Use customer data to move beyond your loyalty program. Even if customers aren't "frequent," they may be quite profitable. Technology partners such as DWL, Oracle, Acxiom and Vistrio can help aggregate meaningful data from multiple systems, such as the amount spent, the form of payment, the items presented during the availability search process, the channels a traveler uses for booking and check-in, the trip history and the nature of any customer service interactions. Customer data integration (CDI) software can model customers whose loyalty may be worth cultivating, independent of the traveler's participation in a loyalty program.
- Make better use of profiles to learn about customers' travel interests, product preferences and willingness to pay affordably higher prices for better products.
- Let customers create their own home page. Control matters to travelers. Technologies such as Ajax will allow travelers to personalize your site's home page.
- Bring back "doorstep love," the practice of providing customers with unadvertised, and thus unexpected, courtesies that can help create loyalty. That may be more effective than tacking on bonus points that the customer may--or may not--be able to redeem for a later award. Continental Airlines offers inconvenienced passengers meal credits or lounge passes based on their value to the airline, regardless of whether the passenger belongs to the airline's OnePass program.
- Everyone is scrambling to cut costs, but remember that the customer experience is what you use to build loyalty.
- Let travelers create their own awards. InterContinental Hotels Group's Priority Club allows members to redeem Priority Club points for retail, dining, and gasoline gift cards; online auctions; and unique experiences, as well as free hotel accommodations. Members of the Starwood Preferred Guest program can redeem points for free airline tickets almost anywhere in the world--and in premium cabins, not just economy. Since these tickets are actually purchased, the SPG member can earn airline loyalty program credits as well.
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