Can airports do 'loyalty' and what does it actually mean?
19% of travellers still have to 'endure' the airport experience. That's nearly 1-in-5 who are less engaged, spending less, and providing airports with less revenue. "Hey, where are you going on holiday this summer?" "Oh, down to Marseille but mainly so I can spend some time in Heathrow…"
…said no-one ever (probably).
Airports are, therefore, a slightly problematic part of the travel journey and experience. Increasingly, though, they’re a growing cornucopia of designer fashion outlets, entertainment, gourmet restaurants and lounges, and this has started to bring about new opportunities to engage customers.
No matter what’s in this cornucopia though, it’s functionality that can restrict the question of true 'loyalty'. In short, you only really use an airport if you've already bought a flight going somewhere else - you can’t usually buy airport 'stuff' without first having bought a plane ticket. Some airports, such as Changi Airport in Singapore, have rewards programmes that also apply to landside retail (and therefore publicly available), but for the majority, this isn’t going to be possible. Does this dependence on existing travel plans negate the option for loyalty in and to an airport?
If you define loyalty as merely a preference to a specific product or brand, then of course not. Price-allowing, I’ll always try to fly from Heathrow (over Gatwick, Stansted or Luton) if I can, because of proximity to home and the general airport experience.
But as the opening exchange suggests (and I’m making a fairly confident assumption here), even if you have a loyal preference for an airport, the majority of people won’t buy a plane ticket solely to visit it. What this ‘loyalty’ does do though is increase the potential to use that airport when you choose to travel, and have a choice between specific airports somewhere in the journey. New York, for example, has three major international airports to choose from, and London, at a stretch, has five. To this point, and considering the rise of transit hubs in Istanbul, the Gulf, and to South-East Asia, a recent study shows that 70% of travellers transit via a particular airport because they prefer it over alternatives.
Loyalty behaves differently when you're actually 'in' an airport however. A number of studies have logically shown that the more time you spend in the airport, the more money you spend. SITA have estimated that for every 10 minutes extra in security, customers spent roughly 30% less in the airport, showing that in-airport concessions are relatively reliant on the airport experience – something they’re powerless over, regardless of whether a customer is loyal to the store brand or not. As aspects like security affect every airport traveller, the vital insight here is the optimisation potential of the airport experience to drive even more revenue through the concessions, which translates to increased non-aeronautical revenue for the airport itself.
Recent Collinson (formally ICLP) research shows 19% of travellers still feel they have to ‘endure’ airports, suggesting there’s enough wrong with the average airport experience to make 1-in-5 travellers discontent and likely to keep their wallets closed. While you may not be able to affect frequency, rewarding ‘loyalty’ with a better customer experience, such as fast-track security, or VIP services such as meet-and-greet, guaranteed support in a delay situation, or lounge access, is a key way to drive in-airport satisfaction and consequently in-airport spend.
The same Collinson research further reveals that only 32% of airport communications are personalised, and where these airports have a loyalty programme, around 40% of offers require too many points to redeem anyway. I came across a good example in question just last month – a colleague was sent an email by an airport in Asia, offering free airport parking for this week only. Nice offer, but he happens to live in Brighton, UK.
Considering only a handful of airports globally have loyalty programmes and can offer initiatives like the ones mentioned above, many of them are apparently not sending out the right messages, at the right time, to the right customers - and those customers have started to notice. A well-managed ‘loyalty’ or reward programme is a great opportunity for airports to better identify and engage their travellers, and want to drive incremental revenue. This opportunity is even greater for larger airports as there’s added potential for greater aeronautical revenues. If passengers have a choice of airport either as an origin, destination or as a transit stop, then better customer experience (as a result of programme rewards and benefits) could be the key deciding factor in which airport to use.
Across every industry, customers ultimately have a simple choice: to spend money with you or not. If you make them feel valued, make them feel looked after, you’re more likely to get a share of their wallet, and many brands claim that as loyal behaviour. Because of its unique position within the travel journey, airports have never claimed that ‘loyalty’ really exists in the same way, and that’s not changed. But given the fact that flyers have no choice but to spend time in the airport, why not maximise your chances of adding to your revenue stream?
Drop me a line to have a chat about engaging customers in airports, or in travel and retail more widely, or to find out more about Collinson’s recent proprietary research.
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