Building Customer Loyalty through behavioral marketing Sponsored by
1 The importance of customer loyalty in the current travel environment 1.1 Achieving customer loyalty in a saturated market In a digital world, there is no room for complacency when it comes to customer loyalty. Consumers have travel deals and discounts at their fingertips, and are used to scrolling through reams of offers that have crept into their social media profiles. Even those who are devoted i.e. to a travel brand may be tempted to try something new particularly if their preferred brand is no longer offering an experience that works for them. Customers are over-stimulated and overloaded with possibilities when they are online, which can lead them to be tempted by whatever seems like the simplest choice. Brands have to work hard to convince customers that they are the best option, by employing strategies that help their customers feel they have a connection that they get them. However, the good news is that, due to the overwhelming amount of choice customers face, when they find a brand that works for them, they are more likely to remain loyal to it. For this reason, providing a relevant and useful digital experience is essential for securing customer loyalty. 1.2 Whose loyalty is being sought, and why? Marketing resources are limited, and should be invested wisely i.e. in those customers that present the best value. Customer Relationship Management (CRM) strategies need to consider how these customers should be reached, and what steps need to be taken to secure their loyalty. This will depend on the ambitions of a brand. Is it aiming to reward long-time customers in order to retain them? Is the brand trying to capture a new demographic? Or win over customers from a competitor? A brand may have several or all of these aims, but each one needs to be decided, with a clear strategy outlining the most effective way to win over targeted customers. Take the example of Teletext Holidays. An established brand, Teletext Holidays was at one time the main port of call for booking holidays in the UK through people s TVs in their living rooms. However, fast-forward a couple of decades, and the market has changed. Teletext Holidays is now an online entity, competing in an arena full of online travel agencies (OTAs). Teletext Holidays worked with Silverpop to develop its strategy. Together, they established Teletext Holidays aims, one of which was remaining competitive in the current environment, by rewarding and recognizing new customers for choosing Teletext Holidays. All new Teletext Holidays customers are now added to an automated welcome program sent out by email. This email explains what is unique about Teletext Holidays services, and what customers can expect from the brand if they opt to subscribe to this email service. This engages new consumers from the very start of the subscription process when they are most interested by communicating how Teletext Holidays services will be valuable to them, and helps Teletext Holidays keep up its subscriber database. If customers continue to see the value of a brand over a prolonged period, through relevant, useful e-campaigns, their loyalty is achieved, and so is a brand s a competitive edge. In summary, the type of customer a brand wants to win over will depend on its overall aims, and will affect the type of strategy that needs to be employed. It is important to link customer segments with these aims, develop an individual strategy for each one, and communicate these to all relevant departments. www.eyefortravel.com 2
2 The role of behavioral marketing in customer loyalty 2.1. Behavioral marketing is essential to stay relevant to customers Behavioral marketing involves using technology to understand the profile of online users and create targeted campaigns that tailor a brand s message to them. Using web analytics, browser history information, cookies, IP addresses and other touch points, marketing teams are able to better understand individual users, and individualize their approach to each customer. Today s customers are accustomed to receiving a personalized online experience through their email, mobile, and social media accounts and will judge a brand on its ability to understand them as individuals. If a brand is successful, the customer is more inclined to enter into a longterm, loyal relationship with that brand. Online user data needs to be collected, but it also needs to be analyzed and harnessed effectively so that marketing teams can draw conclusions from it. An automated CRM strategy is essential if a brand is to have effective relationships with customers on an individual level by collecting and analyzing reams of online data, monitoring customers online behavior, and reacting accordingly with targeted content as part of a systematic strategy. Having the right software in place allows brands to manage and maintain hundreds or even millions of these relationships without compromising the central goal of making a customer feel that a brand gets them. 2.2. Knowing when your customers want to connect with a brand and when they don t Customers behavior also changes as they move through the browsing to booking process, and marketing strategies need to work in real time wherever possible, so that they can sync up with customers needs. Marketing campaigns need to be intuitive and reactive in order to retain customer loyalty if they aren t customers will opt out, and sever their e-relationship with a brand. Brands need to have a strong awareness of how their services are viewed by a consumer. They want to differentiate themselves from all the other brands screaming for attention in the digital realm. Strategies need to be more sophisticated than just getting in front of the right customer they need to get there just when the customer might want them. Going back to Silverpop s work with Teletext Holidays, an obstacle that the brand identified was that holiday packages are not a frequent purchase. Therefore, when considering how to market to subscribers, they didn t want to risk irritating customers by sending them offers and promotions when at times when they would not be interested say, after they had just booked their annual family holiday. The solution was to incorporate Silverpop s Preference Center application. Any Teletext Holidays subscriber who clicks on an opt-out link in email marketing material is now directed to this Preference Center, where they are invited to choose the frequency of the emails they receive. They can also choose to snooze, meaning they temporarily opt out of receiving Teletext Holidays emails until a time when they may be interested in receiving them. The result is that fewer customers are turned off by marketing that is irrelevant to them at one time, and the subscription database retains its loyal customers. 2.3. Social media: a breeding ground for online brand ambassadors In some ways, a brand s social media sites have come to work in the same way as loyalty programs. Social media followers have engaged with the brand enough to want to keep updated with news and potential offers, and become part of a digital community associated with www.eyefortravel.com 3
this brand. Using social media effectively is a major tool for pooling loyal customers as well as improving the loyalty of other customers by communicating with them regularly, and presenting them with offers that appeal to them. Social media sites also present a huge opportunity for behavioral marketing, due to the amount of information that can be harnessed about users and their peers to tailor a brand s message to them. In addition, there s the opportunity for loyal social media followers to do a marketing team s work for the brand by sharing posts and offers they come across with people in their friendship circles that they believe will be interested in the brand and its experience. In other words, social media sites present the opportunity to access brand ambassadors, and enable them to promote information to interested parties outside of their social media following. It is important to have software in place that incentivizes social media users to become everyday brand ambassadors by making a brand s marketing content as shareable as possible. A final example of Silverpop s work with Teletext Holidays, was the social media strategy deployed. Teletext Holidays had a strong social media presence, and an increasing number of Facebook fans, but was seeking a solution for reaching potential customers outside of their Facebook following. Now, Teletext Holidays marketing emails feature Silverpop s Share to Social and Forward to a Friend links an easy way for subscribers to share holiday deals with their friends on Facebook. In addition, an optin page from Silverpop was embedded into Facebook allowing fans to sign up directly for email offers and news, which enabled Teletext Holidays to grow its database and develop a relationship with new social media users that had demonstrated an interest in the brand. The result of Silverpop s work with Teletext Holidays was that the travel brand doubled its subscription database in six months from 480,000 to 1 million. Upping its acquisition of customer data has increased the brand s chances of refining its behavioral marketing approach even further the more a brand knows about its customers, the more it knows about what they want, and the greater its chances of developing a loyal, engaged customer base. 2.4. Behavioral marketing can t rely on technology alone Though automated CRM software increases a brand s chances of attaining a larger, more loyal customer database, the technology can only do so much. It s down to marketing personnel to implement a behavioral marketing strategy as part of an overall data-driven, individualfocused approach to improving customer loyalty, and communicate the strategy to the rest of the company. Marketing personnel need a thorough understanding of how CRM software will help them achieve their aims. It s important to establish this from the start, at the point of installation so that the software can be set up in a way that will best serve a brand and its specific needs but it s also important to monitor the software and make sure it is delivering, adapting it along the way as necessary. This requires training and co-operation from marketing personnel, though ultimately the ROI will be worth their time and effort. 3. Case Study: Corinthia Hotels Corinthia Hotels is a luxury hotel group, with properties that pay homage to the local architecture and culture at their locations in Budapest, Khartoum, Lisbon, London, Malta, Prague, St Petersburg and Tripoli. The hotel group worked with Silverpop to expand its email marketing program it was seeking a more sophisticated data strategy, www.eyefortravel.com 4
along with email marketing support. However, Corinthia was faced with an ambitious goal of setting up Silverpop s Engage system a cloudbased marketing solution and running it independently within two months of beginning to work with Silverpop. To achieve this, Corinthia Hotels took part in the Silverpop onboarding program. This comprised six weekly meetings over a 45-day period. An Engage product advisor from Silverpop gave Corinthia s relevant contacts a call at the beginning to better understand its business needs, and then guided them through setup, training and Corinthia s first mailing using the new program. Meetings with specific topics took place throughout the onboarding program, including one to answer any email marketing questions, and one to cover queries about data, which determined Corinthia s database approach. Another meeting focused on content, and Corinthia was shown how to upload mailing templates, build and test content, review the links type, and how to whitelist and schedule email sends. At the final meeting, Corinthia s program was reviewed, remaining questions were answered, and the next steps for Corinthia were covered. The end result of work participating in Silverpop s onboarding program, was that Corinthia met its goal of being self-sufficient with Silverpop s Engage software within two months. The Silverpop team put us on the right track for success, says Darrell Buhagiar, central customer relationship management analyst, Corinthia Hotels. Silverpop really showed us how to do everything step by step, so that after our onboarding program ended, we d be able to do everything ourselves. Corinthia s mailings have received unique opens as high as 71 per cent Deliverability as high as 100 per cent Bounce rates as low as 0 per cent New Year s email (the first one sent on its own) achieved 97 per cent deliverability, a 43 per cent unique open rate and a 26 per cent unique click-through rate. 4. Case Study: Thai Airways Thai Airways flies to more than 70 destinations worldwide, reaching 36 countries on five continents, and the airline celebrated its 50th birthday in 2010. The airline approached Silverpop as it was seeking an email marketing platform that would improve its communication with its Australian travelers. Thai has a continuously growing database of more than 100,000 Australian travelers, and it needed an email solution that would help it deliver timely, relevant, multichannel marketing campaigns that would engage and expand its existing customer base. Thai Airways selected Silverpop Engage for its ability to reach customers across multiple channels email, surveys, landing pages and SMS. Thai focused on cleansing its data so it could begin sending more relevant emails to subscribers based on their preferences. Thai also deployed Silverpop s ANZ product to create a 50th Anniversary campaign the aim of which was to update current contact details and collect email preference and demographic information from Thai s existing Australian database. The campaign was put together using Silverpop emails and landing pages and its Share-to- Social feature. It sent an email offering contacts in its existing database a chance to win a free trip for two to European cities. Via the email, Thai led its contacts to an online form, created www.eyefortravel.com 5
using Silverpop Landing Pages, and used the free trip promotion to entice them to update their information and provide additional details about themselves and their email preferences. Thai, with the help of Silverpop ANZ, used the details from the 50th Anniversary campaign to develop a template for ongoing, highly segmented messages promoting current specials and new travel destinations and routes. For example, Thai sends customers fare special emails promoting offers that are running within the travel time frame customers indicated on the 50th anniversary campaign Web form. To boost email opens and click-throughs, Thai uses Silverpop s Send Time Optimization for its ongoing emails. This uses past data to send emails to recipients when they are most likely to be in their inbox and engage with an email on an individual contact basis. Thai s 50th anniversary program kick-started a new approach to engaging and enticing its database via email. The airline is now able to work off a strong database loaded with detailed information on customer preferences and demographics. The initial email of Thai s 50th anniversary campaign resulted in 1 in 5 contacts updating their information. The social-sharing links within the email drove more than 1.5 million Facebook impressions, leading to thousands of new contacts signing up to the airline s email program. Thai s current emails are more targeted and relevant than ever, with an average open rate of 40 per cent. The airline experienced a sizeable increase over the Australian industry standard of 16 per cent to 24 per cent. 5. Conclusions In a saturated travel market, customers are loyal to brands that get them Achieving customer loyalty is essential for remaining competitive in today s market, where online consumers have so many options available. Travel brands may need to work hard to stand out in a crowded digital space full of competitors, but if they have the means to communicate with customers on an individual level, and provide a useful, relevant online experience, then customers will choose them again. Each customer segment requires a tailored marketing approach Brands need to set out their business aims and identify which type of customers will help them achieve them. It is then important to set out an individual plan to win the loyalty of this type of customer, with a strategy for targeting them and gathering their data to know them as fully as possible. A stronger customer database makes customers more knowable, and therefore puts brands in a better position for creating targeted marketing campaigns. Behavioral marketing boosts customer loyalty By using technology to gather information about customers online behavior and analyze certain touch points, brands can develop highly- individualized communications with their customers across a number of channels. Behavioral marketing makes it possible to achieve this in an automated way, so that brands can have individual relationships with high numbers of customers, and secure their loyalty by proving that they get their customers something consumers have come to expect. Timing is key Brands need to be self-aware, and consider when customers might want them to communicate, and when it could harm the www.eyefortravel.com 6
brand by irritating the customer. It s not about being omni-present, but analyzing data to identify optimal times for sending out content and even providing customers with the means to indicate when they would prefer not to be contacted. This is a vital part of providing a relevant online experience and standing out from the brands that simply bombard users. Social media is a key component of behavioral marketing As well as the potential social media presents for gathering data about a brand s loyal following, it also offers a key opportunity for reaching new customers and augmenting its database. Travel brands should embed technology that encourages existing followers to share enticing offers to their social circles thereby incentivizing them to become online everyday brand ambassadors and achieve another level of targeted marketing on the brand s behalf. Automated CRM software still needs people power Although automated technology can greatly enhance the capabilities of marketing teams, it is essential that they are deployed as part of an overall strategy. Staffs needs thorough training in how to get the most out of CRM systems, and an understanding of what is required of them in order to monitor the technology. Marketing teams need dedicated support from their technology provider from the very beginning of the installation process, and an idea of their next steps once they have achieved their initial aims. www.eyefortravel.com 7