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Good Points Blog


'Gratisfaction' - the holy grail of customer loyalty

I’d like to introduce a theme I’ll touch on throughout the year: gratisfaction—the place where gratification meets satisfaction. It’s the holy grail of customer loyalty. If we consistently deliver it, our customers will remain faithful for life. So, how best to create gratisfaction?

And, for loyalty travel specifically, what is most important: the Transaction, i.e., paying for a customer reward; or the Emotion, i.e. creating a memorable experience? Two of the popular models of travel rewards disagree on the answer to this question. Let’s look at those rewards models through the lens of credit card companies.

Pay-off model. Some credit card issuers use a model that gives customers the flexibility to buy travel through any provider or online travel agency. The issuer then pays off the charge using the customers’ points or other rewards currency. The experience and payment are inherently separate; it’s a non-curated experience for the consumer. In this model, the issuer serves as an underwriter. They simply facilitate a transaction, albeit often in creative ways.

Full-service model. Customers plan and book travel through an issuer-provided, dedicated rewards portal, either online or via a conversation with a travel specialist.  This provides a curated experience. Customers have access to an actual person to advise them. Desires and concerns are discussed. Questions are answered. The customer is served. An experience is enabled in partnership with the customer.

The real question is: what creates loyalty?

The loyalty travel industry is big business. According to the U.S. Travel Insurance Association, 61 percent of Americans say they will travel in 2014, taking an average of 2.4 vacations. According to an American Express Travel Spend survey from 2012, 54 percent of consumers with leisure travel plans will redeem reward points to help pay for that experience.

But let’s face it; booking travel can be difficult for both customers and the companies that provide it. From the company perspective it’s expensive and resource intensive. Even if you build a functional booking engine, it’s important to have robust and reliable customer service and relevant content in place to help customers navigate the details of their trip. And, in an industry fraught with inevitable delays and problems often out of their control, there is a lot of pressure, on all ends, to help ensure a trip goes smoothly.

Our research shows that customers who redeem for loyalty travel are much more likely to engage a call center agent as compared to those who redeem for gift cards or merchandise. In fact, more than 41 percent of airline ticket redemptions are facilitated in the contact center. This confirms that travel is complex, but also offers the opportunity to create lasting memories for your customer.

From the customer perspective, the trip becomes a journey that takes on a life of its own. It’s a holiday celebrated with aging parents. It’s an adventure crossed off a bucket list. It’s a scrapbook full of pictures that your granddaughter cherishes as much as you do. It’s no wonder that customers feel pressure to work through the time consuming details and get things right.

There are benefits for both the customer and the company for a closely curated experience. For the customer, it‘s about making the process easier and more convenient. A travel agent provides ideas and assistance; they have access to relevant content like activities and dining options. The ease of this process itself can make the customer’s trip more memorable. The opportunity to pay for their trip with a combination of points and cash also allows ultimate flexibility.

For companies, creating a travel experience can be costly, but the benefits of a more engaging customer interaction can outweigh the costs. Think of the ancillary products that are needed when a customer books an airline ticket. Offering additional travel products such as car rentals, hotel stays and trip insurance can be profitable. Programs that enable sharing experiences through social media and websites create a culture that encourages even more reward activity. Ask yourself, do you want your customers to equate your brand with their celebrated journeys?

Though loyalty travel can be complex to navigate, it’s on the rise and offers great opportunities for building customer advocacy. Whether you follow the pay-off model or more of a full-service model, your ultimate goal should be about delivering… gratisfaction.

This article first appeared in Loyalty360.org

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