Using as a lifecycle marketing strategy

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1 Using as a lifecycle marketing strategy A guide to implementing marketing for online travel and holiday companies Katie Traynier April and Website Optimisation

2 Introduction Creating an strategy around the subscriber lifecycle is an effective method for both acquisition and retention. As potentially the most powerful form of direct marketing, most marketers will be aware of the effectiveness of . However, is becoming much more than just DM. Due to the regulations implemented by the European Government and ISPs, and the behaviours of users themselves, marketers are being forced to think twice about how they use . marketing is evolving, and if used correctly, it can now be much more than just a direct marketing tool; it has the potential to build brand rapport, increasing the number of returning online users and increasing the number of users repeatedly spending money with you. This is especially true for the travel sector. With increasing numbers of consumers looking to get the best holiday deals online, marketing is becoming one of the most important ways to talk, influence and sell to new and existing customers. The traditional customer lifecycle covers five main stages; acquire, convert, develop, retain and reactivate. For each of these stages suitable programmes can be implemented to ensure the right communication is being sent to the right user at the right time. Please see Fig.1 for examples of the types of programmes that can be used at each stage. The customer lifecycle is all about building trust and familiarity with your brand, through reacting to your uses online behaviour and using this to send your subscribers relevant information they are likely to want. Travellers book with agents they trust. Used correctly is a great way to build that trust and create a strong customer relationship that presents loyalty and ensures your customers continue to buy from you. But beware, the opposite is also true; mis-used, can damage that trust. This white paper takes you through the five stages of the customer lifecycle explaining how travel & holiday companies can use intelligently; building rapport, increasing online bookings and growing online revenue for the long term. Fig.1: A diagram to show an lifecycle marketing strategy Stage 1 Acquire Stage 2 Convert Stage 3 Develop Stage 4 Retain Stage 5 Reactivate Welcome Abandoned Booking Cross-Sell Loyalty Reactivation Holiday Search Browser Nursery Anniversary Renewal Notice Pre-Holiday Post-Holiday pg 1

3 Stage 1: Acquire Who you choose to target is as important as what information you target users with. Audience (target market) will be a well-known phrase for marketers. marketing should be no different and actually has the potential to be even more targeted, if the data is acquired in the right way. Collecting your data Current users of your website are probably the most valuable target. These people are already engaging with you; they have shown an interest in the service you offer. You want to start building a relationship with these people. Customer rapport starts here. You want to make signing up to your mailings as easy as possible for the user, but you also need to give them a reason for signing up. Think about what your customer would want to be sent information on. This might include Latest holiday deals sent straight to your inbox. Last minute availability to a range of hotels or destinations. Exclusive subscriber offers and discounts. It s a good idea to offer preferences, giving users the chance to select what information they would like to receive and how often they would like to receive information. Would they like information weekly? Fortnightly? Monthly? Setting expectations and sticking to them is one of the best ways to obtain subscribers and keep them. user engages with the more sales focused s that will take place later in the customer lifecycle. Ideally a welcome should present the following: Welcome the user and thank them for their interest. Give the user the opportunity to update their preferences to ensure you are best placed to target them with the right information in the future. Set expectations on what the user can expect from subscribing to your newsletter. Entice the user back to the site to help strengthen their current engagement with your brand. Often welcome programmes can consist of several triggers sent to the user over a period of time. When presented like this it is a good idea to build up to a more sales led offer. Case Study: Direct Line Holidays Direct Line Holidays introduced a welcome to help engage new website users. Open rate: 50% CTR: 22% Welcoming your subscribers Once a user has given you their data they are opening the door to communication, so it s important to acknowledge the start of this relationship. Welcome programmes are a great way to do this. Welcome programmes are a prime example of working less like direct mail and more as a brand building activity. A welcome programme should not be designed to just promote a direct sale, but to start increasing brand equity with your customers. This will ensure the pg 2

4 For travel and holiday companies one of the most important times to present subscription is during the booking process. Users starting the booking process are more likely than anyone else to be interested in the packages you have to offer. Ensure capture is early on in the process; that way even if the user does not complete the transaction you will still have their details and can begin the process of building rapport and encouraging them to complete their booking at another time. Metrics As stage one is all about acquiring data and starting a relationship, the best metric for success is in the value of the data you collect. List size alone is a meaningless KPI. You need to be measuring and growing the number of active and engaged subscribers (those that are opening and clicking on s). Remember, this is just the first stage of the lifecycle. You need to be continually tracking these users to measure how their value as a customer progresses in relation to how they react with future s. How many of your subscribers go on to make a booking within 6 months or a year? What s the average booking value for a subscriber in comparison to non-subscribers? Even though these s may not be directly aimed at promoting a sale, your online customer analysis starts here. Stage 2: Convert Converting new subscribers into customers is often seen as the most important part of the customer lifecycle. This is where your hard work in preparing a welcome programme begins to pay off and your engaged users start to make you money. Booking abandonment Abandonment campaigns are one of the most well know types of behavioural and one of the most successful in regards to conversion. The key to a good booking abandonment is relevance. Case Study: Macdonald Hotels Macdonald Hotels decided to embed registration into the booking process. The exit rate from the booking page was not affected neither was the average time to book. The registration rate from booking almost doubled from 36.1% to 71.6%. Some simple tips for building a good booking abandonment Always include images relating to the specific booking the user abandoned. Use recommendations to offer alternatives, in case the abandoner was looking for something different. Test the timing of the send to make sure you are sending at the optimal time. Provide a link to drop the recipient back to the booking they abandoned. Include information on any benefits the user will receive through booking with you. pg 3

5 The more specific you can make the to the booking the user abandoned, the more likely you are to improve conversion. Dynamic content based around the specific holiday location is a great way to create a real experience. If you re not able to invest in full dynamic content a good segmentation system can be equally effective to strengthen the message. (You could send a different template creative to the different segments, or even substitute certain words within the template, for each segment.) As well as location you could look into segmenting abandoning customers based on the type of holiday booking they are making: Case Study: Haven Haven implemented an abandoned basket campaign consisting of 3 automated programmes tailored to the type of holiday the user started to book. ROI: 2815% Open rate: 54% CTR: 53% family holiday; couples holiday; city break; mini break; beach resort; all inclusive. This can be particularly effective if used as a multi-triggered programme as shown in Fig. 2. Fig. 2: Flow diagram to show how a 3 trigger abandonment programme can work Trigger 1 24 hours after abandonment We re noticed you didn t complete your booking to <resort>. Is there anything we can do to help? Trigger 2 3 days after abandonment Still interested in booking a trip to <resort>? Check out these great offers Trigger 3 7 days after abandonment Need some holiday inspiration? Here s some other <type of package> we thought would interest you pg 4

6 Online browsers Equally effective when it comes to closing that first sale are s sent to people browsing on your website. The most common behaviour found on a travel or holiday site is searching; whether it is for accommodation, a flight, a holiday or a location. Using this information is a great way to tailor your communication to each individual user. In some instances using analytics tags will enable you to dynamically create content based on what your users are searching for. As with abandonment programmes, the more specific you can make the content to what the user was searching for the more effective it will be. Case Study: Monarch Monarch incorporated dynamic content into a search browser campaign, targeting users searching for flights, holidays and hotels. Open rate: 56.53% CTR: 34.37% Conversion: 6% ROI: 17,257% Metrics Conversion focused s are probably the easiest to measure, as the whole purpose is to generate a booking. A direct click to book is always a good metric, but don t forget to look at response to book conversion. Just because a user didn t make a booking at the same time they received the , doesn t mean the didn t play a good part in contributing to the booking. Awareness is a key factor in brand engagement and generating sales. Always look at all the subscribers actively engaging with your s and measure how many of these go on to make a booking. Stage 3: Develop Making one booking with you is not a reason to end the relationship. In fact, it has been argued, it is only when a customer buys a second or third holiday or flight, does that customer become profitable and offsets the cost of their recruitment. Therefore, it s at this point that you really need to start thinking about how to use in a clever way to develop your one time booker into a loyal customer. Cross-sell Most online travel agents will send an automated booking confirmation . These simple transactional s offer a perfect opportunity to up-sell or cross-sell. As with all other types of , the more relevant you can make the information, the better. pg 5

7 Case Study: Budget Budget Rent A Car implemented a pre-rental reminder . As well as reminding users about what they needed to bring when picking up their car, the worked as an opportunity to cross-sell GPS hire. Open rate: 71% CTR: 26% Conversion: 11% Examples of content for pre-trip cross-sell s: Holiday checklist: Are you prepared? You leave for your holiday in less than a week. Here s a list of things you mustn t forget. Let us know if there s anything you need Insurance? Car hire? Hotel welcome: We re looking forward to your visit. In preparation for your stay please let us know if there is anything we can do to make your visit more comfortable Pre-book a table at the restaurant? Upgrade your room? Holiday planning: You must be getting excited about your trip to <location>. Here s a few must see attractions you might be interested in. Need car hire to get about? Contact us now. Other common up/cross-sell opportunities that work well for travel and holiday companies are: holiday insurance; holiday money; upgrades (flight/room); additional rooms; optional extras (food, extra luggage); car hire. As well as using development s to directly improve revenue, a well-structured pre-trip can be a great way to build upon the relationship the customer has with your brand as well as improve revenues through cross-sell. The key here is to be as relevant and useful as possible. Nursery programme For some customers, confirming a booking may be the time they decide to sign up to your mailings. For these users, who have had no previous interaction with your s a specific nursery programme can be implemented. A nursery Weather report: You must be looking forward to your holiday to <location>. Click here to check out the latest weather report for while you re away. Need anything else? Insurance? Car hire? Call us, we re here to help. programme is a welcome programme aimed specifically at users who have made a purchase at the time they sign-up for subscription. If you re going to use a nursery programme you want to structure the messaging around your confirmation and pre-trip trigger s. When running programmes like this it s important you don t bombard your users so you ll have to think carefully about the business rules. You need to set a hierarchy of priority for the s, to ensure that those recipients who could potentially hit rules for multiple s, only receive the one most relevant to them (not all of them). Fig. 3 shows how you can incorporate relevant cross-sell opportunities into a nursery programme to boost revenue and build customer rapport. pg 6

8 Fig. 3: Flow diagram to show how to incorporate cross-sell into a nursery programme Booking Confirmation Nursery Trigger 1 Thanks for booking with us and for signing up to our newsletter. As an subscriber you ll now receive the following Nursery Trigger 2 You must be looking forward to your trip to <place>. As a valued subscriber we would like to offer you the following to help you prepare 10% off travel insurance... 15% of car hire Of course, when running any multi-triggered programme it s a very good idea to incorporate engagement segmentation into the set-up of your s. Engagement segmentation is a type of recency segmentation based on response (more detail can be found in RedEye s white paper on Engagement Segmentation). How the user interacts with your first should dictate what information you send them next. Metrics In terms of value, cross-sell s can be measured by a direct click booking and response to book. However, it is really important you start to segment users based on their engagement. Rather than just basing value on bookings, keep tabs on who is interacting with your s and returning to the website. Even if they are not booking yet, it doesn t mean they won t in the future. In fact, up to 80% of your future revenue could come from customers who are engaged with your s now. It s this theory of future sales that gives your addresses value. Analysing your sales from your engaged customers will reinforce how important this is for you as a business. Stage 4: Retain Retention is all about keeping your subscribers active and coaxing them into continually buying from you. This stage is about building rapport and creating loyal custom; and when you re trying to retain your customers, good segmentation is essential. Post-trip programme You don t want to lose contact with a subscriber just because their holiday is over. In fact, if you want to keep them as a regular booker, now is the time to get in touch. Post-trip s are a great way to welcome the user back and set the seed for the subscriber s next booking. As a full marketing exercise some companies choose to include a survey for customer feedback. It can also be used as an ideal situation to introduce your subscriber to any loyalty programmes they may not yet be aware of. You want to give your customer a reason to keep the interaction between themselves and the brand alive. pg 7

9 Loyalty programme If your company offers a loyalty programme, marketing is great way to keep in touch. Frequentflyer or frequent-booker programmes present you with an easy segment of regular and valuable customers. Send subscribers reminders of the points they have collected and any relevant deals and offers where they can maximise their points. Introducing the loyalty programme to users when they make a first purchase is a great way to get new users involved and give them a reason to keep using your site. Anniversary programme A good way to touch base with subscribers is through an anniversary programme. Contacting users in relation to when they first booked with you is a great way to keep in-touch and remind your customers about a previous booking they made with you. As with all marketing, the more relevant you make the the more effective it will be. e-rfm segmentation During stage 4, it becomes more important than ever to assess how your users are reacting to your s and use this to tailor the level of communication you send them. When it comes to marketing e-rfm segmentation (segmenting users by online engagement, purchase recency, frequency and monetary value) is one of the best ways to increase customer lifetime value and retain more customers for longer. e-rfm allows you to build rules that combine online behavioural data with traditional RFM. By collecting and understanding this data you can create highly targeted campaigns devised for specific segments. Data based on the engagement of your customers will indicate how often you should be contacting a certain user, while RFM will help you decide what content to put in the . This can then be rolled out across a range of retention programmes, including post-trip browser, loyalty and anniversary (see example in Fig. 4). Fig. 4: Examples of how to use e-rfm to improve the relevance of post purchase triggers Post-Trip Browser James registered 6 months ago when he booked an all inclusive family holiday to Spain. On returning from his holiday he opened the post-holiday and browsed the site, viewing city breaks for two. Recency: High Frequency: Medium Monetary: Medium Engagement: High Current conversion potential: High Example of content: Hi James, we noticed that now you are back off your holiday to Spain you were looking at city breaks. Check out some of these great deals for two people James Loyalty Programme Emily is a frequent flyer, usually booking for business. She books flights to New York in the first week of every month, but she hasn t booked a flight this month. Recency: Medium Frequency: High Monetary: High Engagement: High Current conversion potential: High Example of content: Hi Emily, as a frequent flyer you currently have 3000 points. Use our online calculator to see how you can use these points Anniversary Programme Tim registered 1 year ago when he booked a hotel stay for 3 nights. He rarely opens s, and hasn t visited the website since he booked a year ago. Recency: Low Frequency: Low Monetary: Medium Engagement: Low Current conversion potential: Low Example of content: Hi Tim, it s been a whole year since you stayed with us. We d love to see you again. Check out our latest deals Emily Tim pg 8

10 Case Study: Warner Warner implemented a highly segmented programme concentrating on active subscribers and customers. Achieved whitelist status Open rates increased by 10% CTR increased by 24% segmentation you can identify users starting to drop off and target them, with a last attempt to reactive them and draw them back into the buying cycle. When planning any type of reactivation programme you need to be aware of the different levels between engagement and disengagement that are experienced by your customers. e-rfm segmentation will be very useful here, as you can use it to extract users as they start to disengage with your communications. One of the first things you need to determine is the best time to start a reactivation process. Is it after 6 months of a user not interacting with s or your site? Should it be after a year? Within the travel industry it s likely many users will only visit your site when planning a trip, so 6 months may be adequate. However, it will depend entirely on the overall behaviour or your customers, and of course whether they are disengaging just from or from your brand entirely. disengagement only Metrics Stage 4 is all about developing single customers into repeat customers, so you want to be focusing on repeat online custom from subscribers. e-rfm is extremely important here. You can analyse the number of engaged subscribers by recency, frequency, and monetary value, and compare how valuable these users are based on these metrics, compared to the value of unengaged subscribers. Likewise you can look at the engagement of each individual programme and monitor how many individual users book again within a year. Stage 5: Reactive Even with the most advanced segmentation and compelling offers, the truth is, you can t win them all, all the time, and eventually some subscribers are going to start to lose interest. Using engagement There may be a number of reasons why a user has started to disengage with s. You re not going to know why they have disengaged, but there are things you will know. When did they sign up? Have they browsed recently? Have they booked recently? If a user has been on your website recently, even just browsing, then they are still interacting with your brand, even if they are not interacting with your . These users still have a value as customers. Giving them a chance to update their preferences may make all the difference. It may just be that you re ing them too frequently, or with the wrong type of information. A simple reactivation , prompting your subscriber to update their preferences is a good place to start. However, if this goes unopened, referring the user to a callcentre may be a good way to confirm the following: Have they changed their address? Is still the best way to contact the user? Are they happy with their current preferences? pg 9

11 If you re still unable to get hold of users within this segment (or they confirm they no longer want s from you) let them go (as subscribers anyway). To keep bombarding these users with information they don t want will do you more harm than good. This is true for both your reputation and your brand reputation. Website and disengagement Users that are not engaging with your or your website after a set period of time are becoming of little value to you. For these users a renewal programme can act as a successful way to cleanse your database, giving subscribers the chance to re-engage, whilst removing users who will soon become a danger to your reputation. Just like offline magazine subscriptions offer renewal notices, the same can be applied for . A multi-triggered programme, ending in expiry is a great way to bring to the users attention the fact that their subscription will soon come to an end unless they choose to reactivate it. Any user who does not interact with the in any way, should be automatically removed (see Fig. 5). ing users who are not interacting with your brand ( or online) is a waste of time, and can cause you more trouble than they are worth. database size is a meaningless KPI, the important figures are the ones that show you how many on your database are booking with you and how many are engaged with your communications. So, for those that have plainly no value, let them go, accept this is the final fate of some of your database and focus your efforts on the addresses that are worth the money! Fig. 5: Flow diagram to show how a renewal programme can work Renewal Trigger 1 Are you still there? As you haven t been in touch for a while, your subscription will expire in 2 week. To keep receiving great offers, reactivate your account here, or update your preference options. Renewal Trigger 2 1 week till your subscription expires We just wanted to remind you, your subscription will end in less than a week. If you want to unsubscribe, do nothing. To keep your account activated click here. Renewal Trigger 3 Your subscription has expired We are very sorry that you no longer want to receive s from us. If you ve changed your mind please click here to reactivate your account. pg 10

12 Metrics Reactivation is all about reviving the customer relationship, so at its most basic level you want to measure how many subscribers you are able to recover. However, this stage is extremely important as an on-going procedure in regards to keeping your database clean. Look at deliverability rates and open rates and the percentage of active subscribers; but most importantly, always ensure you are keeping a full single customer view of each individual user. You want to look at the impact reactivation is having on your business. How many of the subscribers you revive as users go on to make a booking within 6 months or a year? What is their average monetary value? Do these users stay active? Keeping a full single customer view of all your users will help you accurately measure the impact is having on your brand and your online business. Conclusion marketing is changing. Initially used as a way of advertising through direct marketing, and working on a law of averages, it is now crossing over into what can be described as a specialised marketing strategy. Due to its cost effective nature, it is no surprise started life as a blast marketing approach, broadcasting general sales messages to all subscribers in the hope that somewhere, the message would stick and a sale would be made. ISPs have started to pull the stoppers on this shot gun approach by judging senders on how their s are received by users. No-one asks consumers how they feel about receiving a travel brochure in the post from a travel agent they subscribed to years ago, but ISPs are asking users how they feel about the s they are receiving. Windows Live Sender Reputation Data, where users are able to vote for whether certain s are junk or not, is just one example; and if you become known as a junk sender or spammer, it s bad news for your reputation. If your s get blocked, they are not going to get seen, never mind opened or clicked. However, the great thing about is its ability to work in segments. marketing doesn t have to be a one blast approach. Advanced technologies are making it possible to segment online users and customers by hundreds of different types of behaviours (booking behaviour, browsing behaviour, recency of booking, frequency of booking, monetary value, level of engagement). Essentially, you can build niche markets within your full target market, in order to target every user, with the right information, at the right time. You now have the opportunity to send customers/users information depending on when a booking was made, where the customer is travelling to or how often they travel. Moreover, marketing goes even further than just good segmentation to target specific users. When following an lifecycle strategy not all s will be focused on direct sales or conversion. A welcome programme or post-holiday trigger is more about rapport than anything else. Due to this fact, these programmes can be harder to measure. Most of the programmes you ll be using at stage 2 (convert) will prove their value through a direct click to sale; which is an easy metric. Using this you can easily produce an ROI that your boss will understand. Rapport based programmes used at other stages in the lifecycle are less easy to justify. However, that s not to say these programmes should be ignored. The metric just may be a little wider. You need to start looking at response to book conversions over a longer time period; How many active subscribers book within a year? How many active subscribers are repeat bookers? What s the average booking value for active subscribers compared to one off bookers? Of course, if you re new to using as a lifecycle marketing strategy, you don t need to do it all once, and you d be right to start with the sure fire wins that will get the quickest return. Unsurprisingly these will be conversion triggers, such as booking abandonment and browser s (pre and post-purchase). But this is where is so great. As your revenue increases (along with ROI) you can invest further, building on the customer relationship and increasing the opportunity to sell more. pg 11

13 Using as a lifecycle marketing strategy, you are, in effect, building a two way relationship that delivers value to your customers and achieves your business objectives. And the key to it all, no matter what stage in the buying cycle you are targeting, is relevance. Making s relevant relies on good data collection, good data management, good segmentation and of course your own creativity. After all, if you were your customer, what would make you open an , read it and make online booking? If you can get that right you will easily be able to prove s worth as a lifecycle strategy, and improve sales and revenue for the long term. Find out more about improving your marketing with a lifecycle marketing strategy RedEye specialises in running highly sophisticated lifecycle marketing programmes. Offering a fully integrated database, for true marketing automation, we work with you to devise the best programmes to maximise your online business. For more information on RedEye visit or call pg 12

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