Traditional marketing tactics, like universal discounts and segmentation, aren’t working like they used to. This fact is particularly apparent in the hospitality industry, where consumers show more loyalty to price than they do to brands, and where universal discounts have completely taken over. Brands like Expedia are trying a new approach: personalized offers.
Expedia’s personalized offers target specific consumer tribes—groups of people who are connected through shared affiliations or life stages, such as the military and students. This marketing approach focuses on shoppers who are socially connected, which leads to more word-of-mouth exposure and higher rates of loyalty.
At Skift 2019 in New York, SheerID’s CMO, Sai Koppala, and Expedia’s Director of Online Marketing, Dylan St. Clair, discussed how the travel giant successfully built their personalized offer program. Here are the four main takeaways:
This transcript has been edited for brevity and clarity.
01 Align Your Brand with Consumer Tribes
Koppala: You have several different brands—how do you connect brands and audiences?
St. Clair: It’s an interesting problem that the Expedia group faces. We have several different brands in our portfolio: Expedia, Hotels.com, Orbitz, CheapTickets, CarRentals.com, and HotWire, for example. Each brand does very similar things within digital marketing. So how does a single brand connect with their ideal audience?
We started off with CheapTickets. We compiled user research and our own data and determined that the CheapTickets brand really resonates with students and the military.
So we’re focusing on those efforts right now. We want to be smarter with our marketing investment so we aren’t competing against each other.
02 Create the Personalized Offer
Koppala: Now that you’re focused on students and the military for CheapTickets, how do you go about creating offers for them?
St. Clair: Well, CheapTickets is THE budget site of the Expedia portfolio, so we wanted to create personalized offers to give something even richer to student and military users.
We defined our goals—for example, are we trying to get them to purchase once? Are we trying to get them to purchase more? We decided to give users the discounts they want while also encouraging them to join the loyalty program. This incentivizes them by funding their purchase with loyalty program dollars, too.
We want students and military users to love CheapTickets and come back to our site repeatedly. We’re trying to provide richer personalized offers that don’t interrupt our traditional promotional path but also encourage loyalty. Then users will know to come back to us.
03 Encourage Loyalty to the Brand, Not the Price
Koppala: How do you decide on discounts, and how do you make sure people don’t get accustomed to getting a discount?
St. Clair: It’s a problem that’s not easy to solve. We want to have offers that are rich enough to be enticing, but we also, as you pointed out, don’t want them to come back and always expect a discount. One of our best value adds is our package path, because you get richer discounts if you combine your flight, hotel, and car rental together.
CheapTickets also has the benefit of being the only OTA that sells event tickets. So it’s a way we can introduce people to new lines of business and become the one-stop-shop for all things travel.
Our goal is to encourage users to experience the whole portfolio of products and learn to bundle them to get true savings, not relying on a one-off discount on a hotel.
04 Get Your Personalized Offer in Front of Your Audience
Koppala: When do you promote your offers, and how do you reach that audience?
St. Clair: It depends on the audience we’re focusing on. For students, we do really well with Spring Break and Christmas Break. And we see a lot of people traveling for student-specific events, like graduation and homecoming.
We do a lot of geo-targeting and zip code-targeting—so when students and their families are looking for destinations that aren’t really hot spots during quiet times of the year, we can really double down. Sometimes we’re the only advertisers in that window of time.
With the military, we try to give them the best offers all year round. Even though we’re giving them richer discounts than elsewhere, they’re traveling with their entire family. So we may be acquiring them at a cheaper rate than another customer, but they’re booking four flights, booking two hotel rooms, and renting a minivan, so we’re getting higher revenue from them because they’re doubling down.