By Jon Fjalstad, senior vice president, The Lacek Group
As we enter into a recovery period for travel, and nearly everything else in life, many reports are indicating that price-sensitive leisure travelers will return this year, while high-margin business travelers may not fully be back until 2024. For brands that manage a loyalty program in the travel space, now is the time to conduct a thorough review of both your loyalty program and your loyalty strategies to ensure you can make the most of the recovery phase.
First, a few overarching observations:
- The world – and travel – has forever changed. Along with it, the travel mindset has shifted, and financial recovery will come through reimagined loyalty marketing.
- “V” recovery? Don’t count on it. Instead of waiting for travel to bounce back, it’s critical that brands leverage micro-opportunities as soon as possible to improve recovery time.
- Prepare and stay nimble. Travel will recover – but it will likely be in fits and starts. Brands will need to remain nimble in the market to navigate what lies ahead, from outbreaks and containments to changing restrictions and uncertainty.
With all of this in mind, brands can maximize their loyalty program’s value and growth through the recovery period and beyond with these strategies:
- Shore up micro-segmentation. Create audience actions that enable a fast response to the rapidly changing landscape. Enhance profiles and targeting to reflect pandemic concerns and factors including vaccination and testing verifications; risk profiles and preferences; business, leisure and “bleisure” (a blend of business and leisure travel); householding or group accounts; location-based departures and destinations; business sector and role; pre-pandemic and post-pandemic filters. Brands should incorporate external indicators that signal change, such as vaccination penetration and case rates, travel restrictions and relief and intent indicators (online searches, traffic, economic).
- Harness the future trend of bleisure travel. Business has changed during the pandemic with people working remotely, including from various destinations. With employers more open to employees working from anywhere, they will no doubt be open to employees extending business trips to work in leisure travel. Determine how your loyalty program can be maximized to benefit your customers looking to leverage this trend while maintaining health and safety. For example, the Delta Discover Map shows a snapshot of both pricing and travel restrictions and requirements all in one spot, providing a new way to discover where to work and play safely.
- Unify the travel experience. No matter which area of travel your brand represents, consider delivering more value by creating a vertical experience, including transport, stays and activities. Enable the planning experience through travel agents, activity content and category-adjacent content. And partner to deliver more value by filling gaps in or around the travel experience. For example, Marriott teamed up with Uber to empower Marriott Bonvoy® loyalty members to eat, ride and stay their way to vacation. Members can link their Marriott Bonvoy and Uber accounts to earn points on qualifying Uber Eats orders and select Uber rides throughout the U.S., providing new ways to keep members engaged. The only rideshare, food delivery and travel partnership of its kind, the effort drives new member enrollment, member engagement and overall brand awareness for both Marriott Bonvoy and Uber.
- Expand program engagement opportunities. Offer other sources of revenue in loyalty promotions until business travel returns such as non-travel earning through co-brand card transactional spend and annual fees, new leisure-focused card products, point-multiplier promos, partner spend and direct-to-consumer product (e.g., Westin® beds and bedding). Consider increasing achievable redemption with low-currency tiers, cash-and-points redemption and new travelers’ benefit sampling. For example, during the pandemic, Marriott Bonvoy launched a new member bonus in its Eat Around Town loyalty program with a starter promotion to earn 6,000 points in the first 60 days for dining out. The program will transition from eating out in your own town to dining out while traveling as more members ramp up travel again.
- Reinvent your program framework for new realities. Update your loyalty structure and marketing to address the shift to leisure travel and anticipated disruptions, including increasing program flexibility such as extended tier status and reward expiration and gradual or recalibrated thresholds. For example, with younger travelers leading the way in the travel recovery as COVID-related travel concern increases with age, now is the time to develop strategies to make Gen Z loyal customers for life. Explore how to onboard Gen Z in new, unique ways that address their interests and motives, and enable them to engage in earning awards. Consider showcasing programs and activities that they value such as sustainability and DEI performance, real-time customer service online and offline, and transparency about pricing and the use of personal data. Also consider inviting younger travelers to sample benefits they don’t typically receive like airport lounge access, upgrades, etc.
- Ensure operations are nimble. Proactively address pinch points, which inhibit workflow and slow your response to marketplace changes. Streamline decision-making by engaging in scenario planning for emergencies like localized outbreaks before they happen, and establish and communicate clear responsibilities and expectations. For example, consider creating “off-the-shelf” campaigns that can be activated quickly with a targeted offer leveraging pre-defined audience segments and semi-developed communication templates to seize opportunities in email and direct mail within days or even hours.
While it may be a bumpy rebound, now is the time to get started reviewing and updating loyalty programs to address the rapidly changing travel landscape and continued health and safety concerns, while maximizing engagement and driving life-long loyalty.
Jon Fjalstad, senior vice president, The Lacek Group
Over the past 25+ years, Jon has designed and managed award-winning, loyalty and strategic marketing programs around the globe with The Lacek Group. This includes six years living and working in Asia with some of the most revered travel brands in the world. While Jon began his career in the airline industry, he has always focused on loyalty, spending significant time working with clients in the cruise and hotel categories, as well as across industry, including banking, retail, QSR and healthcare.