Airline and Travel Retailers Loyalty Schemes Disliked by Customers, Says Academic

In Customer Engagement, Featured on App, Loyalty & CRM, Social media by Vaughn Highfield1 Comment

Loyalty schemes are a sure-fire way to bring customers back to you time and time again but it seems that airlines, hotels and other travel retailers may well be doling customers out a raw deal. At least that's the opinion of one academic who specialises in e-tourism at the Lucerne University of Applied Sciences and the Arts, residing in their Institute of Tourism.

Speaking to the World Tourism Forum in Lucerne, Dr Andreas Liebrich said, rather defiantly, "People don't like loyalty programmes.

"Maybe there are too many loyalty programmes, maybe they are too complicated for customers."

While this may sound absolutely absurd, especially with the rate that consumers are digesting loyalty schemes in other areas of retail and customer service, Dr Liebrich's words are backed by results from a study amongst online travel bookers in the UK, Germany and the US.

The survey found that only 19 per cent in the UK "like points programmes by travel providers," and Germany had a similar result. The US was a higher rate, but it only sat at 45 per cent, still showing that the majority of customers just don't bother with the system or actively dislike having it in place.

The problem, however, doesn't seem to be the idea of loyalty as the majority in each market agreed that they made repeat bookings and that "one brand is preferable to another." With 63 per cent feeling this way in the UK.

Interestingly though, only 17 per cent of customers in the UK and 5 per cent in Germany actually reported a favourable attitude towards a brand.

So what factors come into account to bring back repeat business?

Well, a well laid out website scores highest amongst those surveyed – especially in the UK. Then a "good reputation and service" offering is next, alongside "positive personal experience", "low prices" and "a trustworthy brand."

Facebook, which is enveloped in "another person's experience" ranks sixth – leading Liebrich to draw parallels to many others in saying that we could well be facing a Facebook fatigue.

In the same World Tourism Forum discussion, Aviva Pearson – director of new business development at Simpleview – said that "the whole point of loyalty programmes is to create individual loyalty," however this no longer seems to be the case as Pearson points out that "there are 1.8 billion loyalty programmes in the US alone.

"Between one third and one half of people in a survey felt what they received through a loyalty programme didn't match their expectations."

Essentially, this means that you can't just cobble together a points system and then throw offers in a customer's face. They need something tailored to them, with the flexibility they need to make the most of it all. As Pearson summarises: "You fly 100,000 miles with an airline but you can only redeem your points one Saturday in May. A loyalty reward has to be worthwhile."

Do you think this loyalty problem is only affecting the airline and travel companies, or is it spreading out into the wider reaches of customer loyalty?

Do you even think that this is a problem that needs to be addressed? Especially if many are still happy to use the company sites regardless of the loyalty scheme in place.

Let us know by leaving a comment with your thoughts below.

At this year's Europe's Customer Festival, Loyalty World will be taking an active look at the world of customer loyalty and how to further improve and expand your loyalty offering into something customers want to make the most of.

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Comments

  1. Simon Kent

    This is no surprise. There is often a significant dis-connect between the amount of business given to an airline in terms of financial spend and the amount you get back as a reward. When using your points against flights it seems common practise for airlines to exclude taxes which can be 75% of the total cost on long haul flights. They will also only allow points to be redeemed against more expensive ticket classes or on less favourable routes.
    Any loyalty scheme needs to provide ‘proportionate value’ to the customer if it is to work. The mind set needs to change on the business side to make sure that the customers are getting value rather than finding ways to make their points redeem at a lower cost or not redeem at all.

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