The pandemic ushered in new travel norms, and hospitality brands of all kinds are learning how to deal with the aftermath. Rob Fagnani, Head of Business Development at Formation.ai, works with large brands like United Airlines and Starbucks to help further loyalty programs by implementing hyper-personalized customer offers. Going into 2021, Fagnani believes marketing to travelers must be conducted on an individual basis to bolster loyalty. Here, HT speaks with Fagnani to learn more about what this means for hospitality brands.
Will there be an increased focus on loyalty/retention marketing in 2021?
Absolutely. We’ve seen unprecedented shifts in consumer behavior due to the pandemic, which has left many companies scrambling to figure out effective ways to connect with their customers to build trust and remain top of mind. Marketers have increasingly leveraged their first- and zero-party data to glean insights, and the need to generate insights at the individual level vs. segment level has become all the more important. This year has proven that segmentation is out of date, and ultimately a slow and ineffective way to target customers.
What is a more effective way to target customers if segmentation isn’t the best approach?
The pandemic threw a wrench in traditional segmentation models that rely on recency, frequency and spend to measure customer engagement. Especially for travel brands, marketers have realized that they need tools that allow them to more nimbly respond to changes in customer behavior beyond whether or not they’ve recently booked a trip. I would expect that marketers will increasingly partner with their analytics teams to leverage tools that dynamically build segments and customer audiences based on more granular criteria that’s considered incontext. For airlines, for instance, that means knowing more about your customer than their usual airport or that they fly business — it’s about their readiness to fly again, what’s going to make them comfortable enough to do so, and what they expect that experience to look like on board. When you know that much about your fliers, you can give them the more engaging offers at more appropriate times to encourage the behavior you want to see as a marketer.
Will automation play a central role in the marketer’s toolbox as we head into 2021?
With continued pressure on marketing budgets, marketers should invest in ways to automate their process to move more quickly with less resources. While digital advertising for customer acquisition has become incredibly efficient, the campaign process for customer loyalty and retention offers and promotions at most companies is still very slow and manual. Marketing organizations still need to manually build offers—from constructing segments, mapping creative assets, to QA’ing content —and then attempt to measure results and decide what to offer their customers next. Automation isn’t an option anymore, it’s a necessity, particularly for travel and hospitality brands as they compete for share as demand comes back online.
How can marketers know that data, automation, and all of these new tools are actually effective and working for them?
Every company should measure and track return on data, and marketers today must become data science capable. With digital engagement and adoption being massively accelerated in COVID, companies have new and incredibly valuable insight into their customers. Data is quickly becoming the most valuable asset, yet most companies don’t measure returns on this asset in the same way they do others. This should change immediately. Being a marketer today is hard, and to be successful you need to be able to access and use data to improve your understanding of your customer and achieve measurable business outcomes.
Obviously COVID-19 has changed the way we shop, eat, and travel. What can we expect to see as things (hopefully) return to this “new normal?”
Customers will want it all. COVID has made huge changes to customer adoption of e-commerce, delivery, curbside pickup, and mobile ordering. COVID-19 also changed the way we do (or don’t) travel, book accommodations, call a rideshare, and everything in between. As we move to a post-COVID world, customers may not be so concerned with how many miles they earn, and will likely not revert to their old patterns. Rather than wanting a free checked bag the next time they fly (which they may still want), customers will want options for no-contact baggage drop-off and a guaranteed empty middle seat. Customers are looking for brands to hear, see, and understand them. Brands who recognize this and deliver against these needs will win.
Into the new year, brands must adapt to newfound traveler expectations. And according to Fagnani, hyper-personalization is the first next step to take in creating the comeback traveler.