This article was based on the interview with Jeff Zotara, Chief Marketing Officer at arrivia by Greg Kihlström, AI and MarTech keynote speaker for The Agile Brand with Greg Kihlström podcast. Listen to the original episode here:
The travel industry, a dynamic landscape of evolving consumer preferences and technological advancements, presents unique challenges and opportunities for marketers. Customer loyalty programs, once a cornerstone of customer retention, must adapt to the changing demands of today’s travelers.
No longer simply a transactional exchange of points for rewards, loyalty has transformed into a pursuit of personalized, memorable experiences. This shift necessitates a deep understanding of generational nuances and an embrace of emerging technologies like AI and machine learning. It’s no longer enough to simply offer a discount, brands need to offer seamless, personalized experiences in order to win today’s customer.
In a recent conversation with Jeff Zotara, Chief Marketing Officer at arrivia, we explored the evolving landscape of travel loyalty programs and how brands can effectively engage with different generations of travelers. Arrivia powers the loyalty and travel platforms for some of the biggest brands, so they are well-positioned to see the biggest trends in travel. Zotara’s insights shed light on the need for a more nuanced approach to loyalty, one that prioritizes experiences, leverages AI-driven personalization, and recognizes the subtle yet impactful distinctions between generations. His insights provide valuable guidance for enterprise marketing leaders seeking to enhance customer engagement and drive lifetime value in the travel sector.
Experiences Over Transactions:
One of the most significant shifts observed by Zotara is the move away from transactional loyalty towards experiential rewards. This is particularly true for younger generations like Gen Z and Millennials, who are increasingly prioritizing unique and memorable travel experiences over accumulating points or miles.
“Loyalty is no longer just transactional. It’s really about creating more memorable experiences. It’s creating a deeper connection with the loyalty program.”
This quote highlights the changing nature of loyalty and underscores the need for brands to create programs that resonate with the experiential desires of today’s travelers. It’s no longer enough to offer discounts or free flights; loyalty programs must curate bespoke experiences that align with individual passions and interests. These can be cooking classes in Tuscany, guided tours in Machu Pichu, or exploring a rainforest canopy. The focus has shifted from simply facilitating travel to crafting unique and lasting memories.
The Rise of the Zillennials:
Zotara also identified “Zillennials” as a key micro-generation influencing the travel landscape. This cohort, bridging the gap between Gen Z and Millennials, exhibits a unique blend of characteristics, with a strong emphasis on social media inspiration and a willingness to prioritize travel spending.
“This Zillennial micro-generation…is probably most influenced and most affected by social and most inspired by social…they are truly more willing, wanting to travel more.”
This observation points to the increasing importance of social media in shaping travel decisions and highlights the need for brands to engage with Zillennials on their preferred platforms. Short-form video content, influencer marketing, and user-generated content have emerged as powerful tools for inspiring travel and driving bookings. Understanding the nuances of this micro-generation is crucial for brands looking to capture their attention and loyalty.
Bridging the Gap Between Membership and Usage:
Despite the proliferation of loyalty programs, a significant gap remains between membership and actual usage. Zotara attributes this disconnect to several factors, including outdated systems, limited flexibility, and a lack of personalization.
“Some of the key barriers include a lot of legacy systems, outdated user interfaces, they may have limited booking flexibility, and a lot of them lack a lot of personalization.”
To address this challenge, brands must modernize their loyalty programs by adopting more agile and user-friendly platforms. This includes incorporating personalized recommendations, streamlining the booking process, and offering greater flexibility in reward redemption. Leveraging AI and machine learning can help predict travel preferences, suggest relevant destinations, and personalize offers to individual needs.
The Transformative Power of AI:
Looking ahead, Zotara envisions AI as a transformative force in the future of travel loyalty. He believes that AI-powered personalization will revolutionize the customer experience by providing more relevant recommendations and tailoring offers to individual preferences.
“I anticipate and predict that just in the last years, as we all know, we’ve seen such dramatic change, but over the next two years, from a travel perspective, we’ll see significant change that will continue to help us help the consumer so they don’t have to spend X amount of minutes on a phone with an agent to book a cruise, but they can do more of it online. They can do it more conversationally with an AI agent.”
This perspective highlights the potential of AI to streamline the travel planning process, enhance customer service, and deliver more personalized experiences. From conversational AI chatbots to predictive analytics, AI is poised to play a crucial role in optimizing loyalty programs and driving greater customer engagement.
The travel industry is in a constant state of evolution, driven by changing consumer expectations and technological advancements. Loyalty programs must adapt to remain relevant, shifting from transactional models to experiential offerings that resonate with today’s travelers. Understanding generational nuances, embracing AI-powered personalization, and partnering with experienced technology providers are key strategies for brands seeking to enhance customer engagement and drive lifetime value. The future of travel loyalty lies in creating seamless, personalized, and memorable experiences that foster a deeper connection between brands and their customers.
