25th November, 2022
Partnerships are nothing new in the travel loyalty category, but have they become indispensable to maintain members’ engagement? Key aspects like cost, revenue, engagement etc. are being evaluated.
There are members in travel loyalty programs, who don’t travel as frequently as others do. So merchants are trying to get closer to the mid-long tail customer, and for this the plan is to partner with other brands. For this segment, earning and then redeeming for only travel isn’t the only way to go with rewards. Other than keeping members active for what they earn and use their loyalty currency, companies involved are also looking at other advantages.
Cost savings
Charles Ehredt, CEO at Currency Alliance highlighted that the cost of operating popular loyalty programs can be brought down by well-matched partners. Referring to the role of technology, he said it is time to drift away from monolithic systems and eye more “affordable”, cloud-based software. Writing about the same, he said other than cutting down on operating costs, funding rewards becomes easier and also “generosity in issuing points will also reduce the channel conflict with the instant value offered via cashback or discounts”.
Action
He also asserted that it is time to look at less frequent members, generally with more varied interests (think of high-frequency spending partners for this segment). “…finding the right partnerships for the less frequent customer has usually been overlooked,” pointed out Ehredt, who also believes that the loyalty ecosystem breaks when most partners are of a similar nature and there is little appeal to less frequent segments. Also, data sharing is improving, finding ways to make most of non-transactional touchpoints etc. are other benefits.
There is a possibility of a lot more action featuring the member. The reward list is more luring, and the options to trigger action include discounts, cashbacks, giveaways, and vouchers.
Selection of a partner
During a webinar hosted by Ai Events this year, Acxiom’s Steve Arsenault raised a vital issue.
“…travel loyalty programs often struggle to identify partners that are a good fit for their brand. Some collaborations are relatively intuitive,” he said. Plus, members often don’t know these partnerships exist. He said travel companies need better insights to understand not only who to partner with, but also how and when to introduce those partners to their members.
Of course, the cost and revenue are one part of the whole exercise. If all of this also results in an improved engagement rate, then partnerships are doing their bit as desired for travel merchants.
By Ritesh Gupta, Ai Events
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