Travtech Triumphs in 2024: Winning Customer Loyalty

Travtech triumphs in 2024: winning and impressing customers

By Caroline Wren, MD, MTM

Listen in on any consumer conversation about travel and it will inevitably touch on Airbnb at some point. They’ve successfully disrupted an industry filled with established global brands that help people make important decisions related to their travel needs.

We all know Airbnb is a top performer in the TravelTech category, but what can other brands learn from them? First, Airbnb offers a distinctive and clear proposition, centred around delivering in a very precise way on the needs of its users. Such a consumer-centric offer has been innovative and people feel a personal connection to the brand as a result. Also, of course, because of its social benefits: Airbnb supports the valued experiences of having holidays with our nearest and dearest. Third, Airbnb is an experience that brings joy and excitement and has made itself central to the vacation, whereas other category brands tend to be mere enablers of the experience.

How can other brands win and impress customers to drive healthy and long-term growth? The answer starts with an understanding of what we call brand experience drivers – the factors that determine how customers or potential customers feel about a particular brand, relative to others in the category. Insight and strategy consultancy MTM has a proprietary brand health framework called HEART, involving seven brand experience drivers that give you actionable guidance on where to double down, and where to pull back, on the various strategies that can be deployed to drive healthy acquisition and retention. The seven drivers are: getting the basics right, building your presence, being easy to do business with, personalising relationships, innovating, providing value for money and acting with integrity.

MTM’s HEART research highlights that travel brands can build equity by offering unique services and ensuring a positive user experience. Despite the sector’s low transaction volume, these transactions are typically high value (both financially & emotionally) and accompanied by strong awareness and understanding of the brands. The key to a brand’s success in the category lies in its ability to deliver an outstanding functional experience in its specialised domain. A key question you should be asking is: How can you help people make great choices in the face of too many options?

Relatedly, in the travel sector, the HEART framework suggests it is critical to achieve a feeling of strong alignment between what customers are looking for and what a brand offers. Brand positioning to deliver that sense of ‘lifestyle fit’ is essential for new entrants and niche brands to consider. When researching prospects, it can be as helpful to understand their expectations as their likes and dislikes. People considering choosing your service will be making decisions on both tangible factors, such as value for money, and intangible factors, such as how the brand makes them feel, what it stands for and what makes that brand different or special.

Especially at the acquisition stage, it’s key that customers fully understand what they are signing up for. Brands need to be able to clearly articulate their value proposition, in line with what Harvard Professor, Clayton Christensen, calls the theory of ‘jobs to be done’. If you understand exactly what people struggle with and set out to solve exactly those problems, you can be more confident that you are acquiring customers who want precisely what you’re offering, which also makes it harder for other brands to copy you.

Aside from Airbnb, there is an opportunity for TravelTech brands to better understand the job(s) they are being ‘hired’ by customers to do and to create more innovative and personal experiences that align with those goals.

In the HEART study, Hotels.com and Booking.com were perceived as brands that provide personalised experiences; their flexible payment options, rewards and incentives resonate well with customers. Skyscanner demonstrates a better understanding of customer needs compared to many other brands in the category but shows room for improvement when it comes to offering a user experience that feels personal.

In the end, travelling is fun and exciting, but the purchase journey itself can be stressful – as we’ve all, no doubt, experienced. The travel brands most successful at acquisition are those that combine personalisation with a clear and distinct brand purpose and take effort and friction out of the experience, so people can enjoy the best vacation possible. Then, to retain customers, the key is ensuring the fundamentals are executed seamlessly and well.

Once you’ve acquired that new customer, there is still much work to do to keep them happy and brand loyal. If we have a negative experience with a travel provider, this may well lead to the end of that relationship. But something called the ‘peak-end rule’ usually applies. The peak-end rule says we typically, retain a strong memory of the emotional highs — the best elements of how we were treated and rewarded — as well as the last thing that happened in the relationship. So it’s crucial to ensure that, as a brand, you handle any issues swiftly and well, so the customer can return quickly to those happy memories. Conversely, if things end badly, such as lost luggage at the end of a great trip, it may be hard to recover from, so it’s always important to finish strong.