Soul: The experience model

Travel firms need to show how they meet the highest standards of hygiene. They can provide a valued service by helping passengers to navigate complex and fast-changing public health restrictions and travel requirements. They can offer ease and convenience through mobile apps that enable convenient storage of relevant documents such as proof of vaccination or testing status, and access to related services where needed. United Airlines, for example, have enabled their customers to access 3,000 Covid testing locations at Albertson and Walmart grocery stores via the airline's mobile app and website, mitigating the friction caused by confusing and everchanging testing protocols.

Convenience beyond Covid

But ease and convenience is much bigger than Covid. Many travel businesses, including airlines, need to redesign their customer journeys at a fundamental level, with convenience and simplicity in mind. Mobile technology can provide for more frictionless checking in experiences. Mobile alerts can provide real-time updates, for example on gate changes and boarding information, or relevant offers from partner retailers in the terminal. And greater customer insight drawn from more granular analysis of customer data can enable more personalized services. For example, why wouldn’t an airline go out of its way for an elderly customer whose flight gate has changed with short notice, who could be automatically alerted to this via text, and sent a buggy to assist with movement through the terminal.

Retail mindset

Many travel companies have slipped behind the standards for customer experience set in other sectors, notably online retail, where digitally-enabled frictionless, seamless experiences are the norm. In travel, finding the best fares or room rates can be complicated and time-consuming. Advertised promotional deals are, in practice, often hard to find. Making post-booking changes or adding additional services, such as ordering in-flight meals to meet dietary requirements, can be arduous. Negotiating complicated websites with poor user-experience values stands in contrast to the ease of ordering a take-away meal for home delivery, for instance.

And why restrict customers to the airline’s or hotel’s own catering options? A more personalized service could allow passengers to request in-flight meals from a specific restaurant, to be collected at the gate—and do the same for advanced orders placed at duty free or retail shops. Travel companies can win vital customer loyalty by making the entire journey smoother and more flexible in line with customer needs.

Going beyond their core service offerings, travel firms could also adopt an ecosystem business model that lets them offer additional services from trusted partners. Here, segmentation and data that ensure relevance will be key. Customers could be offered rental cars or hotel bookings at the same time as booking outbound flights, and grocery deliveries when returning home.

Rethinking loyalty schemes and redemption models

Traditionally, travel companies’ loyalty schemes have been based on earning points through repeated travel. However, the power of these programs has been undermined—fatally—by Covid. There is a fleeting window of opportunity for travel firms to adapt their schemes to meet today’s changing reality.

Many programs have significant market value. They have been used by some businesses as collateral for refinancing: Delta, for instance, sold about $4.2bn in SkyMiles points to American Express in 2020. Yet with reduced travel, few people will earn the points needed for premium-tier memberships in established programs. And there are temptations to devalue the points that consumers have accumulated: A North American airline recently dropped the value of its frequent flyer points by 6%.

Yet there are opportunities to generate revenue from these assets.

• Broaden partnerships. New partnerships for promotions and sales, or links to credit card spending, can continue to drive revenue—even where travel levels remain low. There is scope to broaden the range of partners where points can be redeemed.
• Deliver instant benefits. Even small benefits, well-targeted and relevant, can be valued—a discount when booking, a reduced-price upgrade, or an immediate partner offer, for example. Retail has been experimenting with this type of shift. UK-based grocery chain Tesco, a market leader in loyalty and customer insight thanks to its Clubcard scheme, has traditionally relied on a points model. Recently, however, it has offered instant discounts of up to 50% on selected items, with Clubcard Prices listed on the shelf, available to scheme members at checkout. Online retailers, meanwhile, frequently offer a percentage discount on the first order in return for signing up to membership.
• Adapt points programs to offer greater flexibility. Perhaps allowing family members to pool their points—expanding true brand loyalty from individual corporate travel to family leisure travel. Or loyalty schemes could refocus on rewarding firms for collective bookings. This may enable travel companies to increase their appeal to small and medium-sized businesses—until now, a category largely neglected by the industry.
• Consider ‘bleisure’ travel. Travel companies should also consider the trend towards ‘bleisure’ travel, as some travelers choose to add leisure time to business trips. Flexible benefits that apply across the whole booking would support this trend.

Experiences beyond travel

With travel activity still suppressed, different strategies can help travel businesses remain relevant to customers. Some hotels are repurposing underutilized assets and tapping into the shift toward hybrid working by offering hotel rooms as working spaces—allowing customers to get away from the distractions of home for that critical presentation, say—or offering memberships to use the hotel gym and pool.

With an ecosystem approach to building loyalty, travel firms can transform their offerings by incorporating a range of partner benefits, stepping into the new business environment fully formed. Food delivery could be extended beyond in-house restaurants; laundry services tied in with delivery partners like Uber.

When travel brands can demonstrate clear benefits, the evidence suggests customers will be receptive. Accenture’s Hospitality Loyalty Programs Survey (May 2020) found that 86% of hotel loyalty program members are willing to pay subscriptions to a loyalty program if they receive different benefits and services, like access to exclusive experiences, access to more tailored, personalized offers and deals, or access exclusive offers and deals with ecosystem partners. Again: personalized, relevant service and convenience are critical.

The future of loyalty

One bold approach to rethinking the experience model—and the future of loyalty—emerged in Accenture’s work with a North American travel loyalty provider. The aims were to:

1. Expand beyond existing partners,
2. Identify new customer segments; and
3. Establish a new venture model to incubate product concepts and accelerate minimum viable product (MVP) launches.

We collaborated with the client in a real-time design-thinking session to redefine the future of loyalty. That led to two new experience-led product concepts and the definition of underserved future customer segments.

The approach demanded agility, pace, and focus. We launched one MVP, incubating two concepts and killing another in under six months. The project combined travel-industry knowledge with adjacent industry experience to define the future state of travel.

As a result:

By designing a catalyst organization, we laid the foundations for the cultural shift required to deliver new value—and we set up a 20-person in-house start-up to incubate new product concepts and accelerate launches.

Pro-social and sustainability

Finally, travel companies also need to be sensitive to the rise of social and sustainability concerns as drivers of consumer choice. It is another trend which has been catalyzed by Covid-19.

In Accenture’s Life Reimagined research, product origin, including environment and CSR performance, plus trust and corporate reputation are among the new top five purchasing motivators.

For the travel industry, this could mean a rapid shift in favor of brands that are able to prove their sustainability and CSR credentials, as well as demonstrate credible emissions reductions. An example of how this could work can be found in Whole Self Loyalty, a unique concept that Accenture created infusing sustainability into loyalty. It establishes a circular loyalty program that incentivizes travelers, brands, and ecosystem partners, attracting and rewarding travelers for their sustainable choices and encouraging brands and partners to do even more towards the environment. Whole Self Loyalty creates a virtuous cycle that helps both to increase revenue and improve performance against the UN Sustainable Development Goals.

At the same time that they move towards brands that reflect their values, consumers will move away from brands that fall short. Improving performance on such initiatives—and communicating effectively about them—is imperative. Travel companies that neglect these broader drivers of loyalty risk the erosion of their customer bases as sustainability rises up the consumer agenda.

The pandemic has altered the travel marketplace dramatically. Even as travel returns, many changes will prove to be lasting, not least evolved customer expectations. The travel companies that thrive in this new world will be those with the bravery to look closely at the soul of their customer experience and reimagine it to meet these new demands.

In the next two articles in this series we consider the mind and body dimensions of our new model for customer loyalty in the travel industry.