The role of loyalty programs has become increasingly important for companies in various industries. These programs aim to build user loyalty, drive engagement, and ultimately drive growth. One intriguing aspect of loyalty programs that deserves further exploration is the inclusion of a travel category within their alternatives. Here are some important things to consider:
- Improve user experience
By integrating a travel category into a loyalty program, companies can improve the overall experience for their users. Travel, with its ability to inspire and create lasting and memorable memories, holds immense value for people. By offering exclusive rewards, such as discounted airfare, hotel stays, or unique travel experiences, programs can tap into this emotional connection and forge stronger bonds with users. Such thoughtful rewards not only surprise and delight users, but also establish a sense of gratitude and reciprocity, fostering deeper brand loyalty.
- Greater engagement
A loyalty program that spans a category of travel can effectively expand user engagement. Travel-related rewards serve as powerful incentives, motivating users to actively participate in the program and strive to earn these coveted experiences. By doing so, companies can drive higher levels of user engagement, encourage repeat purchases, and foster a sense of exclusivity among program users. In addition, the appeal of travel experiences can attract new users, expanding the reach of the program and attracting a broader audience.
- Differentiate yourself from competitors
In an increasingly competitive market, establishing a unique value proposition is crucial to standing out. By adding a travel category, loyalty programs gain a distinct advantage over competitors who can’t offer such an enticing reward. This differentiation not only piques the interest of potential users, but also reinforces the brand’s commitment to delivering exceptional experiences. By leveraging the emotional appeal of travel, programs can position themselves as user-focused category leaders, differentiating themselves in the minds of consumers.
- Brand devotion grows
Travel experiences have the extraordinary ability to create lasting memories and transform users into brand advocates. By allowing program members to explore new destinations or enjoy luxury accommodations, loyalty programs can create memorable moments that are likely to be shared through word of mouth and social content. This positive positioning increases brand exposure, attracting new users who are interested in shared authentic experiences.
It is very important to make the following distinction; A loyalty program with travel components included is not the same as a frequent flyer program. They are two very different value propositions. A loyalty program with travel components is generally a higher frequency scheme, where the user can earn rewards and benefits in everyday categories such as supermarkets, gas stations, pharmacies, entertainment, among other industries, including travel. A frequent flyer program such as that of airlines or hotels is mainly focused on travel, having a greater challenge that is to incorporate more frequent and daily options within its value proposition. These programs are usually not that frequent for most of their users.
According to the report issued by Gallup where it is indicated that the average annual frequency per person in the United States is 4.2 plane trips. Obviously there are frequent flyers who can fly much more, but they are not the majority. Having a sporadic frequency, frequent flyer programs have had to look for alternatives that allow the user to be more in contact with the brand, finding in co-branded cards an option to do so, in addition to being an important source of adjacent income . According to a Mastercard study, airline programs are constantly focusing on increasing options to earn benefits on other, higher frequency options. According to that study, he says that currently more than 50% of the points issued by airline programs are generated by options other than flights.
The big difference between the two options lies mainly in the market segment to which they are directed. Everyday loyalty programs are massive, they seek to capture more diverse audiences since the value proposition is broader, while frequent flyer schemes focus mainly on business travelers. The challenge is to create a value proposition that is attractive and sticky enough for users to use it frequently.