Joining a loyalty program is a two-way street, one where members expect to receive exclusive offers in exchange for their personal data. In the travel industry, loyalty programs that offer promotions on travel do so for varying reasons, from provoking interest or trial of something new to offsetting marketplace competition and beyond. Ultimately, promotions are used to encourage incremental travel and generate immediate sales. In addition to generating revenue, promotions should be used to enhance loyalty programs; offering members a short-term value add can assist in building long-term loyalty.
When designing promotions for our travel industry clients, below is a summary of the best practices we deploy at three key stages within the process:
1. Planning and Determining Offer
- Align the offer with a business problem – Ask, “what are we solving for” first. Promotions should be used as a means to solve a business problem. Defining the problem is the pivotal first step.
- Develop an offer that is a true value-add – The promotion should answer the business need while creating a unique offer that provides real value to the loyalty program members. This is key in using promotions to complement the long-term goal of building and maintaining customer loyalty. Because members will always be more invested in opportunities targeted to their specific needs, consider segmenting the offer versus offering the same promotion to all.
- Don’t overcomplicate the offer – Simple offers outperform complex offers. The notion of ‘double’ is a fairly common offer among travel loyalty programs. Double point promotions can be more effective in driving incremental revenue because they are easy to understand. Complex offers can negatively affect member participation.
2. Targeting, Marketing Planning and Communication Strategies
- Also target non-members – Promotions should be exclusive to members; a nice value-add for being a member. However, non-members should also be targeted. Include a promotion objective to acquire new loyalty program members. The promotion gives non-members a heightened reason to join.
- Align marketing channels with target audience – Be where the customers are. Owned channels are the obvious method in reaching your members. Is there budget for other channels? We worked with one of our clients recently to supplement transactional data with lifestyle segmentation and found a high number of members over-indexed on Facebook. In addition to owned channels, we invested in paid media. A significant increase in promotion participation resulted.
- Personalize – Whether you’re offering one promotion for all members or segmenting, talk to members on a 1:1 level. Add personalization and other variable fields that complement the primary message.
- Market the ease of the ask – No one wants to jump through hoops to take part in even the most lucrative of offers. With a seamless registration process, let your members know about the ease to participate. One way to do this is through email subject lines. For example, “Register with one click and travel to get double points this fall”. Another way is through a call-to-action, “Register in 1 Click”. Both are clear ways of communicating ease to members.
3. Track, Learn, Analyze, Repeat
- Track everything – Require registration, as registration is necessary in tracking incremental travel and revenue driven by the promotion. This will also aid in tracking the effectiveness of marketing. Track the registration sources and optimize throughout the campaign if any touchpoints are underperforming in bringing members into the promotion. Track performance at each touchpoint. Email metrics are just scratching the surface. Each touchpoint and version within that touchpoint should have a unique tracking identifier.
- Test and learn – Utilize a test-to-learn strategy to identify the most impactful marketing approach. Look for opportunities to A/B test offers, audiences, subject lines, calls-to-action, creative, messaging, etc.
- Analyze and optimize often – During the promotion, analyze results in real-time and optimize as needed. Conduct weekly registration reports, whereby a granular look at the number of registrations, registration sources, enrollments, channel effectiveness, and qualifying travel can be reviewed. Then, after promotion completion, a full analysis with year-over-year comparisons and strategic recommendations can be generated.
Promotions should be used as a means to solve a business problem. But, when done right, they are also a great way to strengthen the bond with your best, most profitable customers and a way to find more like them. These best practices ensure we deliver on a promise to solve the client’s business problem while providing real value to loyalty program members.