4 Steps to Creating Loyalty in a Price-Shopping World
There’s a big difference between having a customer loyalty program and having loyal customers. Studies show that consumers will join up to 10 loyalty programs but only be active on three to four of them.
One of the biggest reasons is that most travelers prioritize price over brand. Seventy-seven percent of families said that “best value/price for our budget” was the most important factor when deciding where to stay on vacation, and 60% of consumers will consider an impulse trip based on a good hotel or flight deal.
Plus, most loyalty program tiers are far fetched and unattainable: 70% of consumers abandon loyalty rewards because it takes more than six months to accumulate enough points to redeem rewards.
Clearly travelers are happy to jump around to get the best price, but customer loyalty is critical to the success of a brand. How can you make yours stand out?
1. Encourage your customers to book direct.
Online travel agencies (OTAs) have a tight grip on the data you need to encourage loyal customers – preferences for hotel rooms, airline seats, activities, beverages, etc. And since OTAs have 39% (and growing) of the U.S. digital travel market, that’s a lot of valuable information.
To sidestep the OTAs and capture these customers directly, it helps to guarantee the lowest prices. But while low price may attract customers for one-off purchases, it’s no guarantee they’ll come back. You need to go further by creating unique experiences.
Marriott does this by giving Marriott Rewards members access to exclusive events and experiences including the Super Bowl and Universal Music Group concerts, along other conveniences.
Hilton is confronting price shopping even more explicitly with their #StopClickingAround campaign, where different hotel locations compete to delight guests with the most unforgettable experience for those who book direct.
2. Use that data to personalize experiences and nurture loyalty.
Consumers want their preferences acknowledged. Ninety percent said they like personalized service from hotel staff, and 86% of hotel guests will complete a questionnaire about personal preferences so that offers can be tailored.
Brands win when they create personal experiences. Delta’s customized email marketing campaign, which included personalized videos based on each customer’s data points, got a click-through rate 500% over its benchmark.
And Marriott has generated $1.7 billion in annual gross bookings by using their app to deliver curated digital content based on guests’ past searches and make personal requests, such as leaving roses in their room to celebrate an anniversary.
3. Create a gated offer program.
Gated, exclusive offers, which target high-value segments like teachers, students, seniors and members of the military, are quickly becoming a must-have strategy to increase engagement and drive loyalty. And, when used in combination with digital verification to confirm eligibility, gated offers give you access to consumer data that will help you launch personal engagements.
For example, Globus plans vacation packages that appeal to the military, such as tours of historic war sites, and then offers military personnel exclusive discounts they can apply to those trips on top of other promotions.
Using digital verification to verify eligibility allows you to capture your customers’ information, which fuels ongoing personal engagements, such as promoting similar trips to those customers, or offering exclusive upgrades or other perks.
4. Tie your gated offer to your loyalty marketing program.
Gated offer programs can fuel an effective loyalty program, and Lowe’s offers a terrific example.
Create an offer for a target segment that aligns with your core buyer. Lowe’s recognized that many military members were do-it-yourselfers, so the company created a gated, exclusive offer that provided a 10% discount for active duty and veteran military on everything they wanted to buy — all day, every day, with no maximum savings and no product exclusions.
Make it easy for your customers to opt-in. Lowe’s used SheerID’s Digital Verification Platform for a one-time, instant verification, and then immediately tied the customer’s military status to their My Lowe’s loyalty program.
Provide relevant and personal engagements. Lowe’s added value and inspired customer loyalty with campaigns that travel brands can easily replicate.
- Seasonal engagements and promotions. Lowe’s creates special offers on summer barbecue equipment and sends reminders about seasonal chores like winter snow removal. Travel brands can create summer vacation packages for teachers, or travel discounts when members of the military are on leave.
- Free incentives. Small gestures can go a long way. Lowe’s gives out free light bulbs and charcoal. Travel brands can give out free drinks and room upgrades.
- Personalized engagements. Lowe’s tracks purchases and makes relevant recommendations, such as promoting a countertop sale to customers who recently purchased kitchen appliances. Travel brands can make recommendations on restaurants, tourist destinations and tours based on past purchases and interests.
Lowe’s Director of Sales and Operations Planning Ryan Fagan reports that “in a little over a year, we’ve seen millions of veteran customers enroll in the program, helping us build a seamless loyalty program.” Lowe’s military gated offers have doubled in-store visits and driven an increase in email open rates as high as 3x.
Personalization Leads to Loyalty That Beats Price
Travel brands that follow Lowe’s lead will see repeat customers because the brand relationship is more valuable than the savings they might get somewhere else. And that’s the kind of loyalty that really pays off.
For more information on boosting your customer loyalty program by adding gated, exclusive offers, read our previous blogs: