Karen Wheeler, Vice President and Country Manager UK, at Affinion
According to research by Visit Orlando, the average British family begins planning their holiday more than six months in advance, so that they have something to look forward to.Holidays are highly-evocative and often much anticipated. It is therefore not surprising that many banks have sought to enhance their value-added services with travel products.
For example, the HSBC Premier credit card offers free Wi-Fi access worldwide through Boingo, airport lounge access and £20 of Uber vouchers when flights worth more than £500 are booked. Similarly, challenger bank Revolut launched its Metal Card in the summer, with a number of benefits aimed at the business-travelling millennial.These include a dedicated concierge service and overseas travel insurance. It also offers cashback on transactions made outside of Europe – 1 per cent in either normal or cryptocurrency – as well as unlimited foreign exchanges and free international money transfers.
Many banks view travel as a lucrative area to piggyback and the data supports this view. Last year, UK residents spent £44.8 billion on visits abroad and booked 1.7 holidays overseas, compared to 1.2 per person in 2013.
The Brexit effect?
The big question at the moment is how Brexit is going to affect overseas holiday bookings. Some experts are fearful that Brexit could drastically affect consumer confidence and the number of outbound holidays booked over the next three years, whilst others wonder whether travellers will simply delay making holiday decisions until the middle of next year.One in 10 UK adults have already booked their summer getaway for 2019, suggesting that while Brexit is creating huge uncertainty, there will always be a significant number of people who are not willing to give up their annual summer holiday.
If the decline in the value of the pound does limit British consumers’ spending, one potential outcome could be that travellers focus on quality rather than quantity, meaning the pressure to make the right choices when booking their annual holiday is even more prevalent.As a result, any bank or financial institution that can support a customer and provide them with insight and assurance when making these key travel decisions will be richly rewarded.
The holy grail
Research shows that customers who interact more frequently with a company, via multiple channels and products, show higher levels of engagement (which is of course the holy grail for all marketers).There are many obvious reasons why this is desirable for banks. According to Alan Zorfas and Daniel Leemon in the Harvard Business Review, “emotionally connected customers are more than twice as valuable as highly satisfied customers.” This is because theybuy more products and services,visit more often,are less sensitive to price,pay more attention to communications,follow advice, and are more likely to recommend to others.
The emphasis is not on offering more products that generate this sort of engagement and emotional connection, but on having the right types of products available.According to KPMG research, 82 per cent of CEOs are concerned they won’t be offering the right products next year. This shows the hunger amongst senior leadership to get the perfect mix of products and channels,and also the need for clarity on what to prioritise.
One of the key findings of The Connected Customer research,is that people are more engaged when they take up products and services that tangibly improve their daily lives. The best way for a company to obtain engagement is to integrate into the lives of customers and add touch-points where they matter most, which is why travel and lifestyle services are such a great proposition for banks to pursue. The research also found that products which provide customers with peace of mind or offer them assistance and protection are particularly well received.
With this in mind, if a customer is able to turn to their bank, get access toa full-service travel agency with expertise and suppliers that can be trusted to deliver superior service,they will become engaged. If a bank can simplify the process, removing stress and providing premium insight during the holiday booking phase (one of the most highly charged administrative tasks of the year),then a customer is likely to respond with brand loyalty and advocacy.
Providing a premium travel service
Partnering with travel companies can help banks build this pivotal relationship with their customers. Established travel companies understand exactly what a customer is looking for and usually focus on quality and service, rather than a budget, one-size-fits-all approach. Knowing that the finer details will be taken care of, and that a specialist at the other end of a phone can answer any questions or offer support should an issue arise, is invaluable. It ultimately saves the customer time and effort and builds an emotional connection between a bank and its customer.
Holidays and travel resonate deeply with consumers of all ages and backgrounds, and the positive association that comes from linking a bank’s core offerings with a travel service is immeasurable. Providing value-added travel services helps to establish a brand at the heart of a customer’s life and strengthen customer loyalty –something that all banks are striving to achieve in the current competitive environment.