Incentive travel hits the hot spot in the race for customer loyalty,
Cathy Bond examines its allure
There’s a competition prize that never fails to pull in the punters
because everyone lusts after sun, sea and a palm-fringed beach. The
luxury holiday sells escapism and works as a consumer incentive every
It’s one of the cliches of the quick-fire tactical promotion. We can all
dream. Travel is second only to cash as an incentive and it’s a classic
common denominator, scoring with ABs and DEs alike. A mature market
maybe, but the chief suppliers - travel agencies - are on the scent of
new business in customer loyalty schemes.
This market barely existed until a few years ago, and the potential is
huge. Retailers which do not have a loyalty scheme on the go are running
scared, with one eye fixed on the competition and the other on
opportunities to lure and lock-in customers. New markets are also
getting in on the act. Emap recently announced plans to reward
subscribers to a number of its titles with carefully targeted travel
offers. It is the first major publisher to do so.
‘It is definitely a changing market,’ says Claire Harrold, account
director at Page & Moy, the direct-sell travel agent which, with Thomas
Cook and Thomson’s Going Places, dominates the incentive travel market.
‘Clients are looking for third parties, strategic links on a longer
term. In that sort of relationship it’s in everyone’s interests to
achieve lasting customer satisfaction.’
Page & Moy pioneered the Holiday Club a decade ago and now runs schemes
for Barclaycard and Bupa, trading on the strength of its direct-sell
network to provide the capability for mass redemptions.
Other companies flying the loyalty flag, including Tesco, Asda and
Safeway, are enthusiastic users of travel promotions, but their regular
offers tend to mix and match suppliers. Loyalty schemes need to generate
unique and attractive rewards. If they do not, customers quickly lose
The loyalty credo promises one-to-one marketing incentives irresistible
to targeted customers. Unfortunately this clashes with travel’s key
selling point of being all things to all men.
‘Travel agents are not as creative as we’d like, although some are more
switched on than others,’ says Stephen Taylor, head of electronic
relationship marketing at Safeway, which regularly features travel
rewards in its ABC loyalty scheme. ‘Few are database-marketing literate,
so they will always come up with the lowest common denominator stuff.’
Capital Shopping Centres, the company behind retail mega-centres such as
Thurrock’s Lakeside and the Gateshead Metrocentre, last month launched a
Visa card alongside an existing loyalty card, both of which include
‘We did a lot of shopper research and travel always scored well,’ says
Capital’s Heather Hudson-Oldnall. ‘People especially like the products
that seem most ‘free’ - short breaks or free flights - rather than
straight holiday discounts.’
‘Travel agents just bash out the same old holiday discounts,’ complains
Matthew Howes, advertising and promotions controller at The Daily
Telegraph, which has a rolling programme of travel promotions. ‘We need
fresh ideas. They don’t have them.’
Howes points to a recent Daily Telegraph package offering big discounts
on short breaks in UK hotels. The magazine negotiated terms with each
one of 700 hoteliers taking part and devised an editorial-rich
supplement launching the promotion.
‘It was a logistical nightmare, but it was different,’ he says, ‘and the
way it was presented added value. That’s important because travel has
become a commodity. It rewards readers who are already loyal.’
According to the travel trade, this will change. Currently the majority
of incentive business is in tactical promotions, but companies will be
working together with third parties to produce more creative solutions.
‘There are more sophisticated database marketing programmes,’ says
Harrold. ‘Companies want cost-efficient offers that are appropriate to
Sainsbury’s opted for a ready-made solution by linking with Air Miles in
July this year. Members of its Reward club can opt for either cash
savings on their grocery bills or Air Miles points redeemable against
free flights and various other leisure offers.
‘Lots of companies are considering launching loyalty schemes but the
start-up cost is daunting. Then there is the problem of making rewards
worthwhile,’ says Judith Thorne, head of marketing for Air Miles. ‘The
Air Miles bonus is its collectability. Sainsbury’s Reward card holders
can also get points through a growing number of outlets.’
Tesco, meanwhile, has dabbled with travel in an idiosyncratic fashion,
turning the conventional offer on its head by offering Clubcard points
for Thomson holidays booked via subsidiary travel agents, chiefly Lunn
Apart from retailers, newly-privatised utilities are a prime target for
incentive back-up. Suppliers of travel-related employee incentives are
keen to translate their strategic programmes to the consumer sector. ‘A
lot of loyalty schemes are moving into phase two and are looking to
spice up the offer,’ says Michael Crompton, chairman of Landround
Marketing, which set up the Emap deal.
He adds that the big brands can’t ignore the sheer clout that travel has
in terms of perceived value, which is helped by the fact that travel
operators supply the promotional sector with their excess capacity.
‘For example, we supply P&O mini-cruises to Asda’s loyalty club
members,’ he says. ‘P&O are filling empty cabins and they get a captive
audience buying meals, drinks and duty-free.’
Meanwhile, Asda shoppers get a holiday for the same number of points it
takes to qualify for an electric kettle.
‘However the constant struggle in sales promotion is whether to buy
short-term sales gains or longer-term loyalty. Travel suits both options
and the most efficient organisations have feet in both camps.’
This article was first published on Marketing