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Poor models are killing the travel loyalty star

03/31/2015| 10:28:57 AM| 中文

Airline, hotel, and rental car brands used to be the leaders among consumer industries when it came to using technology to understand their best customers.

Airline, hotel, and rental car brands used to be the leaders among consumer industries when it came to using technology to understand their best customers.

Think of the success of loyalty programs, for instance. American Airlines’ pioneered the concept with its frequent flier program. Loyalty is now a major profit center for all types of travel companies.

Yet in recent years, travel companies have fallen behind retailers when it comes to leveraging customer relationship management data. The culprit is out-dated analytical models.

That’s the opinion of Alex Cosmas, chief scientist responsible for transportation and hospitality at Booz Allen Hamilton, a US-based consultancy.

Booz Allen Hamilton has done two case studies that analyze the “breadcrumbs” that travelers drop in the course of their digital shopping.

The studies are intended to drum up business, of course. Travel brands hire the consultancy to create custom algorithms for their live systems.

Yet even if you’re not a potential client, his viewpoint may intrigue you. Cosmas’s sales pitch casts light on some of the strategic mistakes most travel brands are making around Big Data.

He challenges travel executives to ponder whether their brand is asking the right questions about its most valuable customers.

Loyalty is an underachiever

Loyalty programs once had such potential, such promise. But they have become stagnant, failing to engage the highest value customers.

Right now loyalty is just a revenue model. The more you spend with a company, the more rewards you receive. This model drives additional revenue, creates profit centers, and limits market share erosion.

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TAGS: travel marketing | big data | loyalty program
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