Why personalization matters in travel loyalty

Personalization is a hallmark of the modern digital experience. Whether you’re scrolling through Instagram or your Netflix queue, shopping for groceries via Instacart or stocking up on Amazon basics, the content and recommendations you see have been tailored to your interests — and with good reason. According to McKinsey, companies that excel in personalization can generate 40% more revenue than competitors that don’t.  

With the right technology platform, any company that sells online can create individualized offers, recommendations, and content to drive conversions, engagement, and customer retention. Travel loyalty programs are no exception. In fact, with their deep insight into members’ purchasing patterns and profile information, loyalty programs have an advantage. But what should they be personalizing and how? In our latest survey report,Booking, Personalization, Sustainability, and Payments: The Tipping Point for Travel Loyalty in 2023, we uncover what customers expect from their travel loyalty programs and how companies can create value for their members by upgrading their technology capabilities to leverage the power of personalization. Let’s dive in.  

Personalization: the value-maker  

Every time a member interacts with their travel loyalty program’s booking platform, browses their available reward options, or even manages their points or status level, they leave hints about the types of travel and related activities that most interest them. Did a member book a family trip to Mexico pre-pandemic? Did they purchase a catamaran cruise add-on during their all-inclusive stay? Have they recently been checking how many points they need to reach their next threshold? Maybe they’re ready for another beach getaway. You can nudge them to book by sending them a special offer for their preferred Mexico resort or by highlighting a similar trip the next time they log on to their member portal. A travel booking platform that translates member data into relevant content, including past-trip rebooking, dynamic recommendations, and customized inventory display, significantly increases a program’s value proposition.  

How can we be so sure? The proof is in the numbers. We surveyed both consumers and brands to get their takes on their loyalty programs, and more than half of respondents who receive no personalization from their travel loyalty programs also don’t consider them to be very valuable. For loyalty program members who do receive personalized recommendations, it’s a different story. Just over 70% of those who get individualized content via their rewards booking site and 48%who get it via marketing emails say their loyalty programs provide them with value — the top priority of travel reward consumers. Loyalty brands that struggle with attracting new members (21%), user experience (20%) and unredeemed points or miles (13%) can address these challenges by creating better value for members via personalization.  

Personalization in the right places 

Not only does personalization matter, but as our consumer survey demonstrates, how and where you’re delivering it is almost as important. A loyalty program that only personalizes their marketing emails risks losing out on member engagement and potential conversions. That’s no reason to abandon this component; rather, our research suggests that a truly responsive growth strategy should incorporate both personalized direct communication and a dynamic booking website that offers members tailored earning and redemption options based on their behavior and preferences. Ensuring that your tech stack connects and manages all customer/member touchpoints is vital to your personalization strategy, which should be cohesive across the digital landscape. In other words, if you’re highlighting your program’s sustainable travel options for Millennial and Gen-Z members on your booking site, you need to ensure that your email messaging can be configured similarly based demographic data so that you’re always delivering a consistent experience. 

The case for personalization is compelling and yet, the travel loyalty industry is lagging. According to the consumers we surveyed, just over 35%receive individualized recommendations and offers through either their rewards booking site or via email. The relative lack of personalization in the travel loyalty space creates an opportunity for brands that are ahead of the curve to capture the attention of consumers who feel that their current rewards program isn’t delivering travel inventory and offers tailored to their needs.  

By investing in and implementing a travel rewards platform with extensive personalization capabilities, dynamic content presentation, and a recommendation engine, loyalty programs can achieve their conversion and engagement goals quickly, driving more revenue and increased customer lifetime value. 

For more insight into why personalization is a rising opportunity for travel loyalty providers, download our latest report here:

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