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Major brand marketers and innovators will gather at the tenth annual edition of Portada Miami in the Hotel EAST on April 19 to discuss topics like Voice-Based Technology, Gamers and Gambling, Attribution Models for Digital Media Agencies, App Marketing and much more. Register now here!

Innovators and Brand Leaders attending Portada Miami are members of Portada’s powerful Council System of Brand Marketers and Agency Execs.

To ready the discussion for Portada Miami, Portada’s Chair of the Travel Marketing Board Trip Barret wrote the article below on Loyalty, Brand Preference, and the Economy Segment Traveler

What: With the tremendous growth of economy segment hotels and low-cost air carriers, hotel and travel companies as well as the airlines, have begun to take notice and adapt to this expanding segment of travelers.
Why it matters: To ensure that their brands stand out and become the best choice for these travelers, players in the travel industry are delving deeper into loyalty, personalization and brand preference in the economy travel segment.

A few weeks ago I traveled to Santiago, Chile. There was nothing unusual about the planning and preparation, packing and arranging after work meetings with friends, except for one thing: the gnawing sense of anxiety created by an impending unknown experience: the first time flying coach and staying at a Novotel, instead of one of my favorite (formerly) Starwood Properties! The client I would be meeting with had taken care of the arrangements and through their agency had booked me on LATAM (fortunately in one of the “Space +” seats in economy) and at the Novotel (my first experience in an Accor Hotel since staying at an Ibis property in Prague when backpacking through Europe many years ago).

Trip Personas and Travel Behaviors

Most frequent travelers have more than one “trip persona” and depending on the circumstances or purpose of the trip, their needs and expectations vary accordingly. A business traveler’s needs and expectations differ from their leisure travel needs, which will differ even further depending on the circumstance (traveling single, as a couple, with the family; on a high adventure trip, resort/relaxation get-away, etc.) A few years ago, SITA, an air-transport communications and IT-solutions company, published the results from a survey indicating four types of travelers (to matrix even further one’s “trip persona”): 1) The Careful Planner wants to ensure nothing goes wrong (which can cause stress and anxiety), 2) The Independent and Hyper-Connected Traveler values efficiency and wants to be in control (but is less passionate about the actual travel), 3) The Pampered Traveler is used to the ‘status’ and perks associated with Five Star travel options, and 4) The Open-Minded Traveler is more interested in the destination or experience, and less on the ‘status’ aspects of the trip.

Given that I was traveling for Business (travel persona thus defined) I then had to fine-tune my travel behavior (flying economy does that) and so settled into the “Independent Traveler” mode. The flight would matter if it was on time, I would be able to get some work done, and most importantly I would be able to sleep (as much as you can with a 4″ recline and 34” pitch); and the hotel if I was able to reserve early check-in, it offered fast WiFi, great breakfasts, a gym, and a comfortable bed.

Revisiting the 5 Human Truths… Are They Applicable to the Economy Travel Segment?

Over the last several years, leading-brand companies have developed strategies to better align their positioning and product delivery experience to build and strengthen the loyalty of their users. Starwood Hotels & Resorts rolled out “The 5 Human Truths” to connect more strongly with their guests through their individualized Lifestyle Brands as well as the provided services: 1) We need to be understood; 2) We want to belong; 3) We long to feel special; 4) We crave more control over our lives; and 5) We dream of reaching our potential. All this served as the basis for how Starwood communicated and interacted with its guests and clients. While emphasis on this theme was unique to Starwood, whose brands focused on more of the higher-end traveler, the concepts within the five truths are not unique or proprietary (and can be applied by all companies, especially those in the Travel and Hospitality Industries, across all segments from Budget to Luxury).

[The midscale and economy business are] getting tremendous attention right now because that’s where the growth is.

In a recent interview discussing the acquisition of the La Quinta brand and its 890-hotel portfolio, Jeff Ballotti spoke of Wyndham’s pursuit of growth in the midscale and economy business, which Ballotti said is “getting tremendous attention right now… because that’s where the growth is. It’s an area of the market that, if we could elevate the experience, has tremendous growth potential.”

The increasing importance of the economy travel segment has also not been lost on Peter Fankhauser, CEO of Thomas Cook Travel, with new efforts and strategies focusing specifically on group travel and mass tourism. “We decided to individualize the mass market. Every customer is treated as an individual. If (they) have a problem in the first 24 hours of (their) trip, we’ll solve it…We’ve also added services like choosing your room in advance”. These new efforts are designed to allow the customer preferences to be more at the forefront, which in turn will create more satisfied and loyal customers.

There are several opportunities for brands to make a connection and develop or deepen a long-term relationship with customers— no matter what category of travel is selected.

By focusing more on the experience of each individual, both Wyndham and Thomas Cook are making concerted efforts to grow their business and are taking cues from the 5 Human Truths in helping their customers feel more understood, special and equally importantly, giving them control over their travel.

The Airlines are also paying more attention to this segment, especially as the Legacy carriers face Low-Cost Competitors flying the latest Boeing 787s, 737s, and Airbus A330’s and 350’s. As a result, most are introducing Basic Economy fares to give travelers more options (and to maintain their loyalty). Virgin Atlantic CEO Craig Kreeger gave the introduction a great marketing spin: “We’re unveiling the biggest change to our Economy cabin in over a decade— launching three new ways to fly, and a host of innovations on the ground and in the air as part of a wider £300 million investment in our customers. We know that one size doesn’t fit all… our customers can afford to be choosy…We always want flying with Virgin Atlantic to be more special than other airlines, and we’ll never compromise on excellent service, industry-leading food and drink and cutting-edge in-flight entertainment— regardless of which Economy ticket our customers are traveling on, they’ll be able to enjoy all this onboard.”

Conclusion:

The concepts behind the 5 Human Truths are relevant and easily applied to the growing economy travel segment (which I witnessed first-hand during my recent trip to Chile). Whether it’s the first contact via the brand app, the cheerful and attentive smile of a flight attendant, the ability to stay connected throughout the journey, or the front desk associate offering suggestions of where to take in the best local cuisine, there are several opportunities for brands to make a connection and develop or deepen a long-term relationship with customers—no matter what category of travel is selected.

Trip Barrett is head of Travel Marketing Content and chairs the Portada’s Travel Marketing Board, including top-notch executives from the Travel Industry like Jennifer Adams [MD-Integrated Marketing, American Airlines], Ricardo Casco[Global Sales & Integrated Marketing, Avis Budget Group], Pablo Chiozza [SVP USA, Canada & Caribbean, ‎Latam Airlines], Alan Duggan [Regional VP Business Development, The Americas, ‎Meliá Hotels], Roberto Muñoz [VP, Strategic Partnerships & Loyalty, Aeromexico], José Luis Pérez [Head, Marketing Performance, Volaris] , Luis Perillo [VP, Sales & Marketing, Caribbean & Latin America, Hilton], Ángel de la Tijera [Top Accounts Commercial Head Mexico & Latin America, ‎American Express], and Alvaro Valeriani [Regional Vice President Sales & Marketing Latin America & Caribbean, ‎Hyatt Hotels]. This board, as well as the other Portada councils, will meet at PORTADA MIAMI, on 18-19 April. Click here to save your spot!

Major brand marketers and innovators will gather at the tenth annual edition of Portada Miami in the Hotel EAST on April 18 and 19 to discuss topics like Voice-Based Technology, Gamers and Gambling, Attribution Models for Digital Media Agencies, App Marketing and much more. Register now here!

Innovators and Brand Leaders attending Portada Miami are members of Portada’s powerful Council System of Brand Marketers and Agency Execs.

To ready the discussion for Portada Miami, Portada’s Chair of the Travel Marketing Board Trip Barret wrote the article below on 4 Ways Airlines Can Learn From Major Retail Brands.

What: With Amazon’s launch of Amazon Go a “first” in the Retail Industry, we look back at another game-changing ‘first’ in the airline industry: the introduction of the first 747 by Pan Am.
Why it matters: Both the Airline and Retail Industries are having to reinvent themselves continuously to be both profitable as well as the preferred choice of  consumers. Looking at how Amazon  vs  the Airlines build their Consumer / Brand relationships, we can see which efforts  bring more “value” into that relationship and, ultimately bottom line.

 

The news came out on January 22nd that Amazon had officially launched Amazon Go, widely believed to be the next transformative, and arguably disruptive step in the retail industry. This reminded me of a similar, widely heralded launch on January 22nd, in 1970, by Pan Am: the Boeing 747. The introduction of that flight greatly expanded air travel throughout the world, allowing lower fares and more non-stop flights over longer distances.

Related imageWhile the Airline and Retail Industries may have more perceived differences than similarities, the visions of Pan Am’s Juan Trippe and Amazon’s Jeff Bezos to make their globally-recognized companies bigger, bolder, and more ready to reach everywhere, are certainly in lockstep. But, unlike Pan Am, long recognized as a trailblazer faded into the history books of Iconic Brands, Amazon continues to generate increased demand and loyalty from its core customers, while creating new opportunities to bring new customers into the fold. In this article, I outline the main ways airlines can learn from the successful efforts Amazon has introduced.

1. The Classic 4 P’s: Product, Price, Promotion, and Place

The Airline Industry today is certainly much different from the glory days of Pan Am —passengers are a commodity, customer loyalty has dwindled as loyalty programs are devalued, aircrafts are likened to real estate (pitch vs profit), and while progress has been made in employee / management relations, the overall customer service “guest experience” still has a long way to go.

Looking at the Airline Industry through the lens of Jerome McCarthy’s Marketing Mix of the 4PsProduct, Price, Promotion, and Place, it is easy to conclude that most US Airlines have executed well against this model (and should continue to do so). In fact, you could even say that two additional P’s have been added successfully to the mix: Performance (load-factors, scheduling, fuel efficiency) and Profit (especially in ancillary fees).

Airlines have managed to add two additional P’s to the mix: Performance and Profit.

Airlines are increasingly investing in newer aircraft models (Product) and consumers have even more fare options, thanks to the introduction of “Basic Economy” (Price). In today’s Digital World, messaging, targeting and multiple offer options are available (Promotion), and given the consolidation of the Legacy Carriers as well as the growth of Low-Cost and Ultra Low-Cost Carriers, more and more destinations are being served by giving consumers more options (Place).

2. More P’s to Take Into Account

However, in the process of getting the 4 P’s right, the Consumer / Brand relationship has been increasingly overlooked, and it contributes a great deal to the long-term success of a company. In this context, two more P’s should be considered: ‘Persona’ (how the consumer feels about his or her ‘relationship’ with the brand, about its stance on social issues and employee relations, and how well he or she is treated), and ‘Preference’ (the consumer’s commitment / loyalty to the brand and vice versa).

If you take care of [your employees], they’ll take care of your costumers.
Bette Nash is the oldest working flight-attendant, with over 60 years of service at American Airlines.

Videos and social media postings of on-board interactions between flight crew and passengers are as disturbing as seeing uniformed crew members picketing for new contracts; and  these can impact a customer’s perception and choices. As Bill Marriott learned from his father, and still incorporates  at Marriott, “If you take care of them (employees), they’ll take care of your customers and the customers will keep coming back again and again.” American Airlines recently celebrated Bette Nash’s 60th anniversary as a Flight Attendant; when interviewed, Bette revealed the ‘secret’ of how a Brand can successfully engage the ‘Persona’ point: “I love my people. I know my customers. I know what they want. The airline thinks names are important, but I think people’s needs are very important. Everybody wants a little love.”

The airline thinks names are important, but I think people’s needs are very important. Everybody wants a little love.

The second P, Preference, has really seen major changes in the last few years as the Airline Industry has massively changed their loyalty programs (devaluing miles, increasing award level pricing, adding minimum spend requirements, and fare-based vs distance-based mileage earnings) while trying to convince their loyal flyers that it is in their best interest. However, there is an inherent flaw in this approach: with almost all airlines, travelers must re-qualify their status each year to continue to be ‘appreciated and valued’ by the Airline. If the traveler’s business with the Airline reduces in a given year, the ‘love’ or status returned will also diminish—which then begins a downward spiral of the overall relationship between consumer and brand.

3. All Relationships Need a True Purpose

This yearly ‘dance’ reminds me of a poem by an unknown author which outlines the 3 types of friendships: 1) Friends for a Reason (to meet a need, but ends once that is accomplished), 2) Friends for a Season (to grow and seek new experiences which bring great joy, but are also of limited duration), and 3) Friends for Life (indefinite relationships built upon emotions and commonly shared experiences.) By applying these concepts to Consumer / Brand relationships, my assumption would be that a majority of the relationships consumers have with brands would fall into the “Reason” or “Season” categories, with few falling into the “Life” category.

[A buyer’s] decision may fall into the ‘Brand for a Reason’ category, more so by accident than by design.

Given the transparency of the digital world, the airline and hospitality industries, in general, fit squarely into this analogy. For the infrequent, or price-sensitive traveler who will most likely seek out options via the web on Expedia, Priceline or Kayak vs checking with an individual airline, his or her decision falls into the “Brand for a Reason” category —which may be a one-time occurrence or may happen again—, more so by accident than by design or conscious choice.

Road warriors will maximize their efforts to concentrate their business with one carrier in order to achieve the ever-elusive elite status. These travelers fall into the “Brand for a Season” category—and while they make the best of it during the high-travel years, they ultimately know (or come to realize) that the relationship won’t last forever and ultimately they will part ways with the Brand (unless they are in the small group of Ultra Road Warriors who manage to earn one of the “Status for Life” Elite levels.)

Then there are those consumers who do establish a relationship with a brand, perhaps first through the original 4P’s of marketing. As they mature, they find the brand also satisfies and delivers on their Persona and Preference expectations—they’ve entered the “Brand for Life” category.

4. Taking a page from Amazon’s book

Having consumers enter the “Brand for Life” category is a huge accomplishment for an Airline, or for any industry, and it is exactly what Jeff Bezos and Amazon have accomplished. From its inception, Amazon’s mission and vision have been “To be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online, ” and it has delivered on that since day one. The Four P’s of Marketing-Check. Performance-Check. Profit-check out the stock price!. So how about Persona and Preference?

Customers are all treated equally well—whether a Prime Member or the occasional shopper. As it expands, Amazon continues to emphasize increasing its knowledge of its customers, while simplifying their lives as well as their purchasing decisions. It has grown from selling books, music, and videos, to bringing unlimited options to their customers across multiple touch-points—from consumer goods to groceries, to technology, to streaming content. Preference-Check. As Amazon narrows its search for its second headquarters (which will add new employment opportunities) and progresses with its newly announced efforts with Berkshire-Hathaway and JP Morgan to address employee health care costs/needs, it continues to show its leadership and vision for planning for the future, further endearing itself to its consumers, who have come to expect remarkable things from the company. Persona-Check.

And so, January 22nd stands out as a significant date for two Iconic Brands albeit nearly 50 years apart: the launch of the first scheduled 747 flight, recalling Pan Am, the Airline that transformed the way the world travels, and the launch of Amazon Go, Amazon’s next step in meeting and exceeding its customers’ needs and expectations, and impacting the retail industry into the foreseeable future. The Airlines are much better positioned for success than Pan Am, but the true measure will be whether they can develop the strong Consumer / Brand Relationship with its customers the way Amazon does on an ongoing basis.

Trip Barrett is head of Travel Marketing Content and chairs the Portada’s Travel Marketing Board, including top-notch executives from the Travel Industry like Jennifer Adams [MD-Integrated Marketing, American Airlines], Ricardo Casco [Global Sales & Integrated Marketing, Avis Budget Group], Pablo Chiozza [SVP USA, Canada & Caribbean, ‎Latam Airlines], Alan Duggan [Regional VP Business Development, The Americas, ‎Meliá Hotels], Roberto Muñoz [VP, Strategic Partnerships & Loyalty, Aeromexico], José Luis Pérez [Head, Marketing Performance, Volaris] , Luis Perillo [VP, Sales & Marketing, Caribbean & Latin America, Hilton], Ángel de la Tijera [Top Accounts Commercial Head Mexico & Latin America, ‎American Express], and Alvaro Valeriani [Regional Vice President Sales & Marketing Latin America & Caribbean, ‎Hyatt Hotels]. This board, as well as the other Portada councils, will meet at PORTADA MIAMI, on 18-19 April. Click here to save your spot!

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