20 February 2020 | Blog
Why exceptional experiences have become the leading driver of customer loyalty
Seamless, unique experiences based on a digital-first approach have become the key to driving customer loyalty; overtaking more traditional factors such as monetary rewards.
The latest Beyond Rewards report by Harvard Business Review shows financial incentives – such as points, miles or cashback – are now only the fourth most important factor in building loyalty among your customers.
Five years ago, they were the most important determinant of a loyalty scheme’s success, but now just 42% of business executives surveyed believe giveaways are essential, with experience-led features filling the top three spots.
What do businesses consider the most important components for building loyalty?
53% believe that by 2024, digital and omnichannel access will be the most important driver of loyalty, while financial rewards are set to drop to eighth place.
Taking steps to improve customer loyalty is a priority, not just in the travel industry. 72% of respondents said it is one of their organisation’s top five objectives and just 42% believe their current loyalty strategy is effective.
So what other factors should you consider?
- Personalisation is the most effective way to build first-class customer experiences. 57% of business leaders say creating strong emotional connections with customers is a reason to prioritise a loyalty strategy.
- Focus on experiences to create value and drive loyalty. Upgrades, lounge access and transfers will have a greater impact on the way passengers feel about your brand than air miles or discount codes.
- Become digital-first to give customers the instant, real-time access they expect. 44% of executives at companies that have made (or are planning) changes to their loyalty strategy say their primary focus was to offer a more digital experience.
“As loyalty becomes a more digital experience, we want to ensure that we’re delivering a more personalised experience for our loyal members.”
CEO, Qantas Loyalty
The best travel providers are now going further to engage with passengers and leave a positive lasting impression of their brand – often over a much longer period than ever before. Checking out of a hotel room or disembarking a plane is no longer the endpoint of your relationship with customers.
Passengers now expect to receive personalised communications from booking to departure and beyond – and using these to offer outstanding experiences enables you to build trust and ultimately loyalty.
For more tips on how to delight your passengers while achieving key business aims, read our blog on how brand consistency holds the key to achieving a 23% increase in revenue.