83.3% of travel businesses (including travel agents, OTA’s, car rental companies etc) now provide add-ons or enhancements to their core offering, according to new research carried out by incremental revenue specialists Collinson Latitude. This compares to an average of 60% of businesses from other sectors, indicating that the travel industry is leading the way in recognising the potential for these products to increase their customer base and business revenues.
Adding value to the customer proposition was cited as the main reason for offering these add-ons and enhancements (53.3%), which include products such as lounge access and insurance, followed by create additional revenue (40%). The overwhelming majority of respondents (93.4%) claim that such programmes were implemented to differentiate their business from the competition.
Despite leading the way in add-on and enhancement products, travel businesses were found to be lagging behind in offering customers annual multi travel benefits packages, with only 12.5% currently doing so. This compares to 46.2% of financial services businesses, 41.7% of airlines and 33.3% of retail businesses. 62.5% of travel business said that they have considered providing customers with annual benefit packages but have not done so yet.
The study also revealed that 92.3% of people in the travel industry believe customer retention is ‘very important’, the secondary priority is cited as acquisition of new customers with 63.4% rating this ‘very important’
Janet Titterton, Business Development Director, Collinson Latitude comments: “Although the vast majority of people in the travel industry view customer retention as very important, the fact that so few businesses offer loyalty benefits demonstrates that the sector isn’t maximising the opportunities to develop valuable long-term customer relationships.
It is important that travel businesses recognise the role that a relevant and well constructed loyalty or membership programme can play in getting customers to commit to brands without compromising revenues.”
Over 180 marketing and brand professionals from a range of industries, including airlines, financial services, hotels, publishing, retail, telco and utilities, took part in the survey, which sought to identify what value-add products and services brands have in place and whether brands believe that these are beneficial to their customers.