Delivering an exceptional customer experience is becoming increasingly important in the travel industry to support sustained recovery from the challenges caused by the pandemic. With the cost of acquiring a new customer five to ten times as expensive as retaining an existing customer, businesses that can create better customer loyalty will see their revenue grow.
Data is the key to improving your customer experience and ensuring customers rebook time and time again.
How can you use data to drive the customer experience?
The answer – through personalisation.
In their ‘Next Personalisation 2021 Report’, McKinsey reveals that companies that can demonstrate customer intimacy experience faster rates of revenue growth than their competitors, and the closer you can get to the consumer, the bigger the gains.
71% of consumers expect companies to deliver personalised interactions, whether that’s on a website, app or any other communication channel. Customers don’t want to feel like one of many, they expect a personalised experience and even more (76%), get frustrated when this doesn’t happen.
Personalising the customer experience to each individual results in better customer outcomes, with the fastest-growing companies driving 40% more of their revenue from personalisation than their slower-growing counterparts.
Travel and leisure businesses that get personalisation right will be rewarded. ¾ of consumers said receiving personalised communications was a key factor in prompting their consideration of a brand, with 78% saying it made them more likely to repurchase.
In the context of the travel sector, personalisation could include segmenting customers into categories and sending relevant offers based on their previous booking history and travel preferences or communicating with customers in the channels that they prefer e.g., sending text message updates rather than calling, or vice versa depending on the individual.
Personalisation is particularly effective at creating loyalty, driving repeat engagement and generating strong, long-term customer lifetime value. The more transactions you make, the more data you have to deliver tailored and personalised experiences. This in turn increases customer engagement which leads to more transactions. Personalisation as a strategy can only ever get better over time, which is why more and more travel and leisure businesses are using data and a CRM (Customer Relationship Management) to implement personalisation.
The way we collect data is changing
Third-party cookies are small bits of code that are stored on your computer by a website other than the one you are currently on. Advertisers use third-party cookies to learn about your browsing and online behaviour, collecting data about which websites you visit regularly, what purchases you make and what products you show an interest in. This data is then used to show you relevant adverts or offers across different platforms.
Without this third-party data travel and leisure businesses need to reevaluate their options. Marketers won’t have the data they previously used to personalise and create hyper-targeted adverts, and according to Hubspot and GetApp research, 44% of marketers predict a need to increase their spending by 5% to 25% in order to reach the same goals. Organisations that don’t have a plan to future-proof their data infrastructure and data collection practices risk losing up to 23% of their marketing-attributable revenue over the next 3 years according to Publicis Sapient.
How can we use data in the future?
Server-side tracking allows you to track all the events that are important to your business e.g., enquiries, purchases, and newsletter subscriptions by sending them directly from your server to the ad platform. You control how much data you share, and when you share it.
Contextual advertising doesn’t rely on third-party cookies to deliver relevant experiences, instead, users can see adverts that are relevant without giving up any privacy. The downside is that contextual advertising has a narrower reach. Your target audience will only see your adverts if they visit a site with related content. On its own, contextual advertising isn’t the answer but it can work as part of a comprehensive data strategy.
Maximising first-party data
First-party data is information a company collects directly from its customers and owns, e.g., previous booking history or customer preferences. It’s considered the best form of data because it’s gathered from the people you have the most to learn from – your audience. Unlike third-party data, first-party data is more reliable for predicting and forecasting your audience’s future behaviour and consequently, it yields the highest return on investment of any data type.
In this age of consumer empowerment, businesses need to understand and respond to customer wants, needs and intent with contextual relevancy to create personalised experiences that drive brand loyalty and retention. What better way than using the actual data that details every customer interaction with your brand?!
Your CRM is your best first-party data source
You could be sitting on a goldmine of first-party data and customer information, both historical and real-time, that could be used to deliver personalisation if you’re able to access, understand and utilise this data effectively.
Using a CRM is the most effective way of managing and maximising this data. Spreadsheets or disparate systems will hinder your ability to efficiently analyse your first-party data and deliver the level of personalisation your customers expect.
There are four main classifications of first-party data within a CRM:
- Identity – factual ‘unique’ information e.g., name, age, address, location, contact details and other personally identifiable information.
- Descriptive – the valuable rich content that the individual is happy to share with you e.g., family, hobbies and interests, travel preferences, loyalty and membership, likes and dislikes.
- Qualitative – softer data, that isn’t evidence-based e.g., reviews, opinions, motivations, service/support tickets, complaints and feedback.
- Quantitative – hard data, information built up from touch points e.g., quotes, bookings, payments, clicks, visits, searches, contact and messages.
Across these 4 broad sectors of data, with a CRM you can build up an informed picture of your customers and target audience that can replace some of the data that would otherwise be obtained from third-party cookies.
Personalisation is essential to the customer experience and data is the key. With a travel-specific CRM, you can access all your valuable first-party data in one place. Not only can you see customer booking history, travel preferences, complaints and much more instantly when a customer gets in touch, but a travel CRM also gives you access to email and segmentation tools allowing you to create laser-targeted campaigns to boost awareness and grow sales. With a single customer view and information at your fingertips, you can continue to deliver a high level of personalisation and take your customer experience to the next level.