An interview with Ed Silver, CIO, iSeatz
Latest analysis means that increasingly Individuals are utilizing journey rewards playing cards to offset the excessive price of their trip. However are their journey rewards assembly their expectations?
We spoke with Ed Silver, Chief Info Officer at loyalty expertise firm iSeatz, who shares insights from the corporate’s current report, The Tipping Level for Journey Loyalty in 2023, to learn the way loyalty suppliers can drive income and member engagement by way of journey rewards, and what they have to do to deal with the gaps between what American customers need and what suppliers are investing in.
1. You simply handed your two-year anniversary with iSeatz. What do you see as probably the most vital modifications to the journey loyalty expertise panorama throughout this time? What stands out as the largest wins (for each journey manufacturers and customers)? What about losses, or areas for enchancment?
Regardless of the worldwide pandemic, and record-breaking inflation, journey is prospering! In accordance with our report findings, that are based mostly on concurrent surveys of American customers and loyalty program professionals, the urge for food for journey is predicted to stay round with 55% of customers planning to journey extra in 2023 than they did in 2022. I believe that’s an enormous win for the journey business as an entire.
Journey rewards may help manufacturers construct life-long relationships with prospects by serving to them to economize on journey — one thing 43% of respondents in our survey say they worth most about their applications. In flip, loyalty suppliers can capitalize on present and future journey demand to fulfill their income and progress targets and higher have interaction their members. That’s why I used to be shocked to seek out out that solely 32% of the loyalty suppliers we surveyed supply journey rewards as a part of their incomes and redemption choices. This implies there’s quite a lot of unrealized potential on this area.
Nevertheless, our report additionally reveals that there’s a disconnect between what customers need and what they’re getting. As an illustration, 63% of loyalty manufacturers with journey rewards say their applications are members’ first alternative when reserving journey, however solely 51% of customers report the identical. In lots of situations, lagging expertise platforms are on the root of this hole. Loyalty expertise platforms previously two years have developed to be extra versatile and user-friendly (each for members and loyalty directors) however not all manufacturers are adopting this expertise, which leaves them at a drawback.
2. You touched upon findings from The Tipping Level for Journey Loyalty report. What are different key take-a-ways that manufacturers ought to take into account whereas evaluating present loyalty applications and alternatives for enchancment?
Journey loyalty applications that provide clunky reserving experiences, fragmented redemption choices and restricted personalization, in the end find yourself disappointing prospects. Take reserving expertise for example. Whereas nearly 30% of loyalty professionals describe their platforms as ‘cutting-edge’, shopper frustrations embrace: not with the ability to guide all of the journey choices they need in a single place, issue in understanding incomes and redemption guidelines, and being directed to a different web site for fee. These are all fixable with the correct tech powering their platforms.
Personalization is one other space that’s missing. Our survey discovered that lower than 40% of customers get customized suggestions from both their journey loyalty program’s reserving web site or by way of e mail. Why is that this essential? As a result of there’s a direct correlation between a program’s perceived worth and personalization. Simply over 70% of customers who obtain customized suggestions by way of their rewards reserving web site say their present loyalty applications present them with the worth they’re on the lookout for. For those who primarily obtain customized suggestions by way of advertising emails, that quantity drops to 48%. Solely 44% of respondents who obtain no customized content material say their present loyalty applications present them with the worth they search.
Different essential takeaways from the report spotlight the significance of planet-friendly journey rewards and newer fee strategies like buy-now-pay-later, particularly to youthful generations. At present, 32% of journey rewards suppliers supply sustainability-related redemption choices, 45% supply bonuses or incentives for reserving sustainable choices, and 37% contribute a portion of income to sustainability causes or organizations. That’s a terrific begin nevertheless it’s not sufficient when you think about that roughly 91% of Millennials and Gen Zers say {that a} reward program’s dedication to sustainability has an influence on their resolution to guide a visit or not. With solely 7% of journey rewards manufacturers planning to introduce carbon offset/different sustainability options to their rewards portfolio within the subsequent 6-12 months, loyalty applications aren’t inserting sufficient significance on this facet of their applications.
Youthful loyalty program members additionally worth fee flexibility. Simply over 30% of customers need their journey rewards supplier so as to add buy-now-pay-later (BNPL) choices for purchases made by way of their loyalty applications, however this quantity jumps to 53% for Millennials and Gen Z members. Our information exhibits that customers are greater than two occasions as prone to guide journey by way of their loyalty program based mostly on entry to fee choices like buy-now-pay-later, however solely 31% of manufacturers plan to spend money on BNPL over the following 6-12 months. With youthful generations extra skeptical of conventional credit score and monetary establishments, manufacturers that wish to develop this market section can’t ignore various fee strategies.
3. Why do you assume there may be this ongoing hole between what customers need and what manufacturers are investing in?
As a technologist, I is perhaps slightly biased, however I believe the supply of the expectations hole is primarily technological. Many loyalty applications don’t have the correct expertise to maintain up with shifting shopper calls for, and plenty of don’t have the in-house sources to offer it. In the event that they do have current journey reserving capabilities, their platforms is perhaps caught previously. Perhaps they aren’t cellular pleasant or supply customized suggestions, possibly they don’t do job of linking up with the social expertise or incorporating the journey choices customers most need, which suggests they aren’t being as efficient as they may very well be.
It’s not a matter of ignorance or apathy; loyalty professionals are cognizant of areas that their applications can improved. Roughly 40% of loyalty program professionals say the flexibility to include a number of content material and stock sources is what wants probably the most work, whereas 20% say person expertise is their greatest problem.
However in fact, change is tough, so there additionally must be a champion inside an organization to drive that change — one who’s keen to ask the exhausting questions and take the steps to enhance the scenario.
4. How can manufacturers shut this hole between member expectations and program choices to make sure higher journey loyalty approaches now and sooner or later?
Understanding what customers need is step one. After all, individuals’s wishes aren’t fixed, and as we’ve seen in recent times, any world occasion or new development can affect what they’re on the lookout for from their journey loyalty supplier. However as our report and numerous others have proven, they’ve constantly acknowledged their desire for worth, choices, flexibility, and rewards that align with their values.
Partnering with a supplier that may ship a versatile, user-centric reserving platform that mixes journey stock from a number of sources helps be sure that a journey loyalty program can meet these needs with the agility to adapt to shifting priorities. A journey rewards program must be versatile and that’s merely inconceivable if the expertise powering that have exists in a silo.
5. That’s lead-in for my final questions. What are you most enthusiastic about by way of expertise innovation you’re seeing throughout the business immediately? And what are you wanting ahead to seeing one other two years from now?
I’m excited for a higher AI/ML-driven push into personalization and the way that can influence the shopping for cycle. Loyalty firms have the leg up with regards to understanding their shopper versus different manufacturers.
There’s actually no motive {that a} member ought to obtain irrelevant affords from their journey loyalty supplier at any touchpoint. As AI and machine studying capabilities change into extra accessible and widespread, I count on advice engines to take a leap ahead and really bespoke content material to change into the norm.
