Truth, loyalty and how your dog sees you.
Timothy O' Neil-Dunne ~ Managing Partner of T2Impact.
Saturday, 29th October 2005
I have a friend who also works in the travel industry and he called me last week wanting to know what the next "greatest" thing is.

During the course of our conversation he raised the same question that has been bugging me for some time: "How do you build loyalty in today's world?"

Consider the fact that the web has done little to engender loyalty. In fact it has been the ultimate commodity maker tool.

Consider air seats. Initially everyone was astounded that the early air websites could actually display a real availability rather than the tortuous process you had to go through via either an airline call centre or a travel agent. Mostly consumers didn't trust the answer because the sellers of the airline tickets and the actual suppliers all seem to be conspiring to keep information from you during the shopping process. Imagine the joy for the consumer when these views became available via the web. You could see what really was there and if it was available and you could purchase it. Rapture. We call this the first generation of the web travel market – i.e. Access.

The second generation was operational efficiency. When Orbitz and others came out with a matrix of front-end quick view – pricing driven. There were a lot of WOW, VERY COOL and SO USEFUL. You could cut to the chase very quickly.

After airline seats hotels soon followed. A radical transformation occurred with pricing. It was brought down to the lowest common denominator- the pure dollar cost of the product. Travel Click reported that the difference between a web based purchase of a hotel room and a travel agent based purchase had a whopping 20%+ differential. Suppliers, agencies and some consultants lauded this as showing that travel agents could drive higher yield. I am not so sure. Operational efficiency should bring those numbers closer together. Now with the Meta Search engines have we gone too far. Is this value real and long term or is it short term gain at someone else's expense?

The third generation of the travel web business to us means business and value efficiencies. However we are still a long way from there. A few years ago, T2Impact created a website infrastructure for a group of hotels in one of the largest US markets. When we saw the purchasing data we were quite taken aback. People were not buying the lowest priced product. They were in fact trading up. The subtle change from price conscious to value conscious was taking place. Long term I believe that this is going to happen. But not in isolation and not on its own. Woe betide ANYONE who thinks that price is not the lure, hook and bait to catch the fish. So what does this have to do with my friend's question?

There is no silver bullet answer.

There is no short cut for hard work and "real" as opposed to "perceived" value. You cannot create value from nothing without substance. There has to be substance behind your value proposition no matter what it is. Quoting from Kim Catrell's character in the HBO series, Sex in the City: "Fool me once shame on you; fool me twice shame on me?" Consumers need to see that real value proposition and be able to touch it and appreciate it.

Travel is not a frequent purchase in many cases. Not like food, chewing gum or cigarettes. So to build loyalty we believe the approach should not be the pursuit of the ultimate in loyalty (undying dog like devotion). Rather we believe that it is important to create affection and long-term consistency of value to me as the consumer. I will more likely chose you if I feel that affection for you rather than a forced affiliation.

I have a Labrador. She stays at home and I travel constantly When I return the welcome I get is unquestioned and unrestrained. That is the nature of how a dog behaves. The same cannot be said for humans. We cannot ask that same level of devotion from consumers. That is unrealistic. I recalled when the head of a frequent flyer programme told me he knew I was an Elite member of his airline's programme. I answered: "Yes but do you know that I am Elite on two of your competitors as well."

The travel market place is forever fragmented and constantly evolving. The consumer adopts many different personas, both in the trips they take and even behaves differently within trips. For example, he might fly coach but stay at a Ritz Carlton. Some of these characteristics are predictable; however most are not. Just remember this when you speak of "My customer". He or she is never that.

Timothy O'Neil-Dunne is Managing Partner of T2Impact. He would prefer to spend more time at home with his dog! He can be reached however at timothyo@t2impact.com / http://www.t2impact.com  

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