6 Reasons Universal Travel Discounts Fail (and How to Fix Them)
Digital marketers are struggling to win new customers. Compared to a year ago, eight in ten report feeling under greater pressure to meet acquisition and revenue goals. And it’s even worse in the travel industry, where 97% of marketing program owners are feeling the strain.
Differentiation is marketers biggest and most exasperating challenge. Forty percent say trying to break through the marketplace noise is like running on a never-ending hamster wheel. Why can’t they seem to keep up?
How Universal Discounts are Failing Online Travel Marketing
Our recent State of Customer Acquisition Report showed that more than 90% of travel marketers run promotions weekly or continuously, and nearly all travel marketers (93%) rely on universal price discounting.
Running evergreen generic discounts dilutes their impact—a fact that marketers acknowledged in our survey. When asked to identify what prevents them from seeing higher conversion rates, their top three responses were all symptoms of mass discounting:
- Consumer fatigue or conditioning to discounts (55%)
- Lack of differentiation (54%)
- An inability to target a specific segment (53%)
Marketers are desperate for their brands to stand out from the crowd. But if more of the same won’t help, what will?
Gated Offers – Online Travel Marketing’s New Hope
Gated, exclusive offers turn universal discounts upside down. Instead of shotgunning a promotion to everyone and hoping someone hears the bang, gated offers let you precisely target high value groups — such as students, teachers and the military — with promotions designed exclusively for them. Travelers recognize the unique benefit a gated offer provides, and happily exchange a minimal amount of data to receive it.
How Gated Offers Work
Verification for gated offers occurs instantly during the purchase process, and this seamless customer experience helps explain why consumers prefer them. According to our 2018 shopper survey, more than two-thirds of Americans say exclusive offers are more important than traditional coupons available to everyone.
Marketers like gated offers, too—particularly as a tool for differentiating their brand and acquiring new customers. Gated offers deliver 3x conversion rates and 2x repeat purchases, all with a return on ad spend of 18:1.
Globus Uses Military Gated Offers to Stand Out
Globus, a leading tour operator of guided vacations, is a shining example of how gated offers can help a brand rise above the noise in a way that universal discounts can’t.
Globus needed to reach both the travel agents who book their tours and the consumers who search online for vacation deals. And they were interested in differentiating their brand apart by providing exclusive offers to the military, but they were worried about discount abuse eroding their margins. It was a valid concern, but one that had an easy solution.
Digital Verification Prevents Discount Abuse and Saves Money
Globus created flash sales with exclusive discounts for active duty military and veterans, and secured the offers with SheerID’s Digital Verification Platform. Members of the military simply enter a small amount of personal data and SheerID instantly confirms their status. This frictionless, in-brand process made it easy for shoppers and secure for the Globus.
Globus military gated offer was highly successful—it outperformed other flash sales by 20%. And the program provides firsthand evidence of why gated offers hold great promise for travel brands who use them.
6 Reasons to Replace Universal Discounts with Gated Offers
Gated offers helped Globus do things universal discounts just can’t, such as:
1. Speak directly to high value customers.
The military community is a key customer demographic for Globus’ travel products, which include educational trips to the Normandy beaches and tours of American civil war battlegrounds. The military is also a powerful market segment. Including veterans and spouses, the community is 37 million strong with $1 trillion in buying power.
Globus created a powerful connection with this audience by giving them an exclusive offer of hundreds of dollars off of these tour packages. This was a smart move—95% of the military say they are more likely to shop at a company that offers a military discount.
You can apply the same strategy to other segments with enormous spending power, such as college students ($574 billion), teachers ($3.1 billion) and seniors ($3.2 trillion). This kind of immediate engagement just isn’t possible with universal discounts.
2. Stand out during peak and off seasons.
Globus implemented their military offer as a flash sale during Veterans Day, and will run others during Memorial Day—a decision that would also benefit every brand looking to reach customers during key holidays. But gated offers deliver targeted reach and worthwhile incentives to drive off-peak demand, too.
And gated offers are stackable, which helps them trump universal discounts even more. Globus allows travelers to redeem a gated offer on top of other promotions, which further increases brand awareness.
3. Leverage social power.
By appealing to military consumers’ sense of belonging to a tribe, exclusive offers have far more influence than mass discounts in activating peer promotions. This is good news for everyone in online travel marketing: 76% of military consumers say they learn about military discounts by word of mouth.
And gated offers catch the attention of relevant press in a way universal discounts can’t. Globus’ press release about their exclusive promotion received earned media coverage in 14 well-targeted online publications, including Military Times, Military.com and USA News.
4. Reduce discount abuse.
Protecting gated offers with digital verification ensures that only eligible customers can redeem them. This reduces discount abuse and increases profits even more. By using SheerID, Globus reduced discount abuse by 35%.
Jeff Russell, Director of Marketing at Globus, said digital verification “protected our margins and gave us the confidence we needed to widely promote the offers, which boosted their effectiveness.”
5. Outperform other flash sales.
Globus’ exclusive military offers outperformed other flash sales by 20%. Jeff attributes this success to the genuine connection gated offers create with the audience — something a universal discount just can’t do.
“Our exclusive offers for the military are more successful than other promotions because they celebrate the customer and generate widespread goodwill,” he said. He added that Globus is still getting “thank yous” from military customers—a sure sign of growing loyalty among both agents and travelers.
6. Use fewer resources.
Budget and resources are precious in online travel marketing. And SheerID makes implementation of gated offer programs simple—so easy that the Globus marketing team launched their gated military offer with 75% less effort and resources than other flash sales.
Gated Offers: An Online Travel Marketing Must-Have for 2019
Globus joins other top brands in crediting gated offers as a powerful tool that helps them differentiate their brand and retain customers.
“Lots of travel brands offer similar products, but our SheerID gated offers set us apart,” said Russell. “They give us a competitive advantage that’s cost effective and highly appealing to our audience.”
While only 34% of travel marketers are using exclusive promotion, 93% said they would be interested in using gated offers today.
They’re on the right track—backing off from universal promotions and turning to gated offers is your fast track to differentiating your brand and acquiring new customers in 2019.