Remember when you were a kid and you did something so obviously wrong your parents would scold you with; “You should know better.” And you were thinking; “yeah but I did it anyway!”
That same scenario is a too-frequent exchange between travel brands and their customers. Unless they are a vibranium-level loyalty program member (Wakanda forever!), customers can be left wondering why their experience isn’t a bit more marvelous.
To be clear, I love my status and appreciate that companies treat me special because I’ve earned it; but loyalty is changing as customers better understand the value of their data.
We know now that the emotional connection consumers have with brands is as important, if not more important, than points, upgrades, and free stuff. Our friends at Kobie Marketing have done some interesting research into emotional loyalty that sets out to prove this point.
Steve Flaming, vice president of analytics and reporting at Kobie, shared at the recent Acxiom Transformation summit the power of cultivating loyalty on an emotional level with customers. He cited a study that found emotionally connected customers have a 306 percent higher lifetime value (LTV), stay with a brand for 1.5 years longer, and recommend brands at a much higher rate.
Flaming shared three types of motivations that differentiate a brand beyond price:
- Status – when customers feel valued and recognized for their loyalty
- Habit – when customers buy on autopilot and crave a friction-less experience
- Reciprocity – when customers feel grateful for how they are treated and their values align with the brand’s
Traditional loyalty programs often neglect to take these motivations into account, settling for a one-size-fits-all approach. Brands must take a more sophisticated approach to data to better understand customer preferences and then layer in experiential components into their loyalty efforts, which are highly effective at creating emotional connections.
At this same event, Fatemeh Khatibloo a VP and principal analyst at Forrester, introduced attendees to the concept of zero-party data. That’s right, just when you thought you had the data universe all figured out, we now have a new entry defined as data consumers proactively and voluntarily offer in exchange for a better experience. Uh oh, data savvy consumers, this changes everything!
According to a recent Forrester report, zero-party data is data that consumers intentionally and proactively share. It’s a type of data that is never inferred through income or device matching, nor is it merely observed through spending behaviors or cookie data. And while first-party data is rich with behavioral data and implied interest, zero-party data provides explicit interest and preferences — and you must use it to improve the value you provide consumers. When consumers share their preferences and intentions with your brand, it means they trust you to use that data well.
To be fair, there are lots of industries that struggle to stitch together customer data, but travel is like an alternate universe. We need only think about our own fragmented travel experiences to appreciate the challenge. I suspect we would all share more to have a more connected experience from planning to posting memorable moments from our journey.
Brands that know better will certainly sort this out by developing a unified data strategy and a plan to link all of what they know about their customers together, with the emphasis on “all.”
But don’t stop there. If you really want to save the day, connect all you know with all partners know about the customers you share. This idea of a data trust is not new, but consumer demand is dragging it back to the front burner with the expectation that you treat them like you know them. Not just who they are but what they want, when they want it. Know them and show them you know them!
I know this is tricky with the acute focus on consumer privacy today. GDPR is here and CCPA is looming, with other pending regulations queuing up. At Acxiom, we are advocating for a federal data protection statute to ensure we have a unified regulatory environment that matches consumer expectations for more seamless experiences.
Remember, to those who are given much, much is expected. You should and can know better.