Brits Have No Loyalty - Why Should They...?

People get all agitated that there is no loyalty online. But before we get critical of the behaviour perhaps we should consider why and if there is indeed anything that can/could be done about it.

There was an old adage in the UK Travel Trade that the "punter would cross the street for a quid". Translation for those of you who didn’t know was that a retail shop windows were the primary advertising vehicle and if a customer saw a headline price of say 199 and across the street was essentially the same package for one pound less - he would walk into that shop and buy in that outlet.

Tealeaf is a company that studies customer behavior and they have recently released a study on the UK market. You can get it here from etid: . The study is entitled “The ebooker: understanding how travel customers use the web. A whitepaper by Tealeaf and carries results from a pretty big spectrum of customers who responded to it. The study was conducted by Harris Poll UK and published on November 19th.

Tealeaf because they focus on the Customer (read user) Experience – UX – naturally focuses on the areas where web site experience can be improved. And the number of examples of effective practice are legion. It still amazes me that with all the money that some companies spend bringing punters to the front door of their website only to scrimp on the User Experience. And yes you know who you are!
All the money spent driving customers to the website and then the guy looks in the shop window and sees a poor experience and crap. There is little incentive on his side to stay with you – ie to close the sale...

I have written many times that the performance of the site’s User Experience is not easily gleaned from asking the users what they think. It has to be gathered from their behavior. Shock Horror! People lie! But frequently the surveys themselves are badly worded and the consumer cannot express himself adequately. Focus Groups also don’t do the trick. (Remind me to tell you one day about professional focus group participants!). More sophisticated testing and A/B type studies are needed. This is only wise. Hire companies like my consulting firm or a specialist group like Tealeaf to assess your User Experience. This is wise not just a plug for my business.

I would also like to dive into the other reasons for this lack of loyalty by the customer. The Brits are no worse than other markets. However they have a very short tolerance for screw ups. Probably more so than their brethren in other markets. And another possible reason – the UK websites are actually pretty bad and have done little to do a good job in the User Experience. Most Website managers are either copying the US models (which don’t always translate) or just don’t have time to focus on it. In my view the UK is populated by people running websites of circa 2000 vintage web 1.0 varieties. Localization is not changing words – it is deeper and more fundamental. There is very little appetite of the user to put up with this lack of attention. He/she punishes you by clicking away. And don’t forget that he wants a complete experience. One of the worst things is to tell him (as I know more than one UK site tells its users) “our customer service agents use the same information and don’t do better offline than online.” And then proceed to prove themselves as liars on the same call!!!

There is an interesting factor in the study – something Tealeaf calls “Social Acceptance”. This is a factor that few have so far grasped. However don’t interpret that to mean that the Social Acceptance can be assuaged by something in Facebook. No – again it is the whole package. Thomson UK still suffers a certain degree of social stigma from being the cheap brand. No studies I have seen address this issue. Further the lack of brand delivery against a promise is one of the consistent mistakes a Website makes. IE Lies, Damned Lies, Statistics and Brand Lies…. They fall into the same category. Consider the opposite end of the spectrum with Ryanair that does not give a thought for its brand and does everything based on price. While Marketeers may scoff – Ryanair delivers against its premise time and time again.

The effort of so many companies and brands now to get people to “like” them creates a false sense of brand loyalty. So we are clear – “like” does not equal “brand value.” The only reason they are clicking the like button is so you will give them a banana.

Finally let me remind you of something that most people forget. A customer is far more likely to distrust than to trust. Start there and work on proving him wrong.
More likely to distrust than trust

Social Media And The Act of Hooking Up: No Intimacy And No Loyalty

As I live in America - I am somewhat starved of conventional media's thinking opinions. The BBC and the commercial channels in the UK seem to have a better way of looking into issues - not too superficial and not too self serving. My favorite non-musical radio station where I live is my local NPR outlet KUOW.

On driving to an appointment on Monday I heard a very interesting piece on Sex without Intimacy (a link to the broadcast is below) - this got me thinking of the impact of Social Media on the current generation. If they just want sex without intimacy then surely they have no need for conventional loyalty. And so it seems that as we have changed our channels of communication - the ensuing attachments to (previously) conventional mores seem to have been lost. Perhaps because I am a little older - I value things like loyalty, honour and duty. Today loyalty from Millenials and even Gen X and Gen Y'ers is primarily to one's friends and not to the greater good. Definitely they don't feel the same attachment to brands. If they are the attachment is governed more on the basis of convenience rather than values.

So this got me thinking about brands and loyalty in travel in the age of social media. Bear with me on this one - I think its one of those observations that I hope you will think about.

Therefore it is important for us to consider when pitching to these groups to understand their motivation. While this is probably not a light bulb idea for most people who read this blog - it has taken me quite some time to appreciate it and the depth of the sentiment. It must be that nostalgic streak in me.

http://www.npr.org/templates/story/story.php?storyId=105008712

Listening to the young ladies that were interviewed for the program it somewhat unnerved me to think that they had come to separate the essence of their relationships by splitting the concept of Love Making, Friendship and Intimacy. So too one can infer that these same people have the ability to separate their sentiments and desires when it comes to making purchases - especially for life-style products such as Travel. Please note I am not criticizing this behavior, merely trying to understand the impact of the core thinking by this class of people who are clearly very important to our market.

I put this down to the ability of the young to multi-task like never before and to compartmentalize their emotions and decision making skills. Both left and right sides of the brain. Would that I had that natural skill or that my own brain was rewired in this way. (Banishment of guilt!!!!)

The challenge of brand building in this environment must be enormous. It is probably more relevant today than at any time in the past when one appreciates how difficult it is to build a long lasting brand in this "noisy" environment and just how quickly it can evaporate.

Think about it... ponder the question. Can loyalty actually exist in today's Social Media?

Comments please at your convenience. And don't worry - I wont shout at you nor attempt a virtual Hook Up!

Cheers

Comprehending Traveler Disloyalty

I am an avid reader and inhale "stuff" about our business. It is perhaps the old researcher in me.

Yesterday I received a piece from PhocusWright inviting me to participate in their new study: "The Disloyal Traveler: Influencing the Undecided".

This did get me thinking why the Traveller (Traveler) has become "disloyal". At the recent conferences I have attended this was somewhat of a whispered issue. No one wants to admit that indeed the era of branding has radically changed if not died.

The demand for instant metrics, performance and more important delivery (aka bookings) has undermined the traditional notion of a brand. It has also finally exposed the fact that (and humour me here - I am addressing airlines in the main) that the product is a commodity.



Of course this is not a binary factor. But in times of economic disability (I am tired of using GFC) price becomes ascendant over quality even if quality was universally measurable and assured - which we know is not the case.

So PhocusWright is correct in looking at this subject. However will the answers be really truthful? Will we get data that will tell us what the consumer really things and is this applicable to the real world?

One thing is for certain - the destruction of brand value is not just a function of the economic environment, nor is it a result of consumer behavior - nor even the web and the fabric of social media. Rather it is a combination of factors not least of which has been the behavior of the brand owners themselves. When cash is king - then their behavior tends towards survivalist.

Understanding the core value of the brand proposition over the recent years seems to have been lost. For example in the recent past legacy airlines focused on yield rather than on value. The value proposition high ground was grabbed by the Low Cost Carrier segment. To differentiate from the commoditization value offered by the LCCs, the Legacy Airlines actually went further up market. Coming back to compete with the LCCs, has these airlines now fighting in the trenches. Unfortunately to do so has meant undermining the "goodwill" of their brands further commoditizing their products.

Sure if there is an apple to apple comparison then the player with a differentiated brand value wins. However this strikes at a core principal of airline products namely opaque pricing. I am sure by now there will be some readers hunting for the comment or flame button. But hear me out. True airline pricing is all about obfuscating the price in relation to the cost. It is as close to a pure buy and sell model as you can get. But it is only now becoming easier to make that true comparison. The operational inflexibility of an airline means the assets are not actually that flexible. It is not that easy to reposition your 777 from transatlantic to the San Diego/LAX market.

At this point in the evolution of the Travel Market, airlines are forgoing brand value for cash value. When people talk about the life time value of a customer - now is the time to really focus on that and mine that loyalty. Sadly but realistically - the lure of instant gratification of cash now vs brand future value has destroyed that image and the resulting value. Thus the customer is not really being disloyal. It is just the manifestation that never was that loyal to you in the first place. Anyone who made that assumption is seeing that in cold hard cash (or lack thereof). Its like the recent movie title - "He's just not that into you." An All Star cast doesn't guarantee success.

I remember once chatting with a SVP of Marketing for a large airline at a small gathering. He had done his homework on his audience and actually gone to the bother of checking up on who was a "loyal" customer to his brand. He was quite taken aback when he thanked me for my loyalty, I explained that it was not loyalty but other attributes such as schedule that made me come back. Returning visits do not mean someone is loyal. This is a new lesson. I also made him even more comfortable when I explained that I was also at Elite status on 2 other airlines. (Back when that meant something).

So food for thought. I look forward to seeing the results of the study. I hope that there are real lessons and pointers for the future.

Oh and one more thing - Big is not necessarily a positive brand value!

Cheers

Loyalty - Airlines have devalued their FFP currency

Steve Hay from ICLP in Hong Kong gave a short but very insightful presentation yesterday at WIT/2008/Singapore.

He demonstrated the difficult positions the legacy carriers are in with their FF programs and how they could address them.

Interestingly it is clear that the airlines have been slowly eroding the value of the currency. The impact has been yet more erosion of brand value amongst consumers. This has been a constant theme of the Professor - the big airlines have done a very bad job in maintaining their brand value.

Steve actually gave a couple of very good ideas about how the supplier community can continue to breathe life into their programs. These are no longer programs about incremental value and loyalty. FFPs are now a price of staying in business. Carriers who move to a la carte service models will be struggling to serve their "premium".

Unfortunately we didnt have time to delve into Steve's ideas but I believe that just ignoring what is going on elsewhere in the airline's marketing mix will come back to BITE them big time. Browsing through the FF sites - such as Flyertalk and Expert Flyer amongst others - it shows that things are definitely not good.

In the Asia-Pacific market - the profligate give-aways of the US carriers didnt happen. However some carriers because of their global alliances were forced to give away large amounts of miles. Qantas recently just destroyed the "Miles" accounts of almost all of its users. It now takes more than a million miles to have that "special" trip - say pair of long haul biz class tickets. Tim Hughes over at the BOOT has clearly vented his frustration at this bad behavior.

While I was writing this a PR release from Sabre crossed my mail. Have a quick peak:

http://phx.corporate-ir.net/phoenix.zhtml?c=73098&p=irol-newsArticle&ID=1215013&highlight=


Bottom line - WAKE UP AND SMELL THE COFFEE - you are further eroding the value of your brands.

Cheers