S6 | 531: Customer engagement and loyalty in travel with Jeff Zotara, arrivia

Digital StrategyTechnologyConversational AI

Jun 3

About the Episode

Today, we’re diving into some crucial aspects of customer engagement and loyalty programs in the travel industry. We'll explore how leading brands are bridging consumer preferences with their brand offerings, enhancing customer lifetime value in today's market, and effectively communicating the value of their loyalty programs to customers.

To help me discuss this topic, I’d like to welcome Jeff Zotara, Chief Marketing Officer at arrivia.

About Jeff Zotara

Jeff Zotara is the Chief Marketing Officer of arrivia, a travel technology company providing travel loyalty, booking, and marketing solutions to consumer-facing companies that want to deliver exceptional value to customers, uncover new revenue streams, and drive growth through exciting travel rewards and member benefits. With more than two decades as a strategic and operational marketing leader, Jeff is focused on driving growth and marketing technology across brands and providing the best member experience at the intersection of travel and tech.

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Transcript
Please note this was generated by AI and only lightly edited. There are likely some errors.
Greg Kihlstrom:
Today we're going to dive into some crucial aspects of customer engagement and loyalty programs in the travel industry. We're going to explore how leading brands are bridging consumer preferences with their brand offerings, enhancing customer lifetime value in today's market, and effectively communicating the value of their loyalty programs to customers. To help me discuss these topics, I'd like to welcome Jeff Zotara, Chief Marketing Officer at Arrivia. Jeff, welcome to the show. Thanks, Greg. Thanks for having me on the podcast. Yeah, looking forward to talking about these topics with you. Why don't we get started, though, with you giving a little background on yourself and what you're currently doing at Arrivia.
Jeff Zotara: Yes, thanks. I'm in my 10th year here as Chief Marketing Officer at Arrivia. And Arrivia is a travel technology company. And what we do is we provide travel loyalty, booking, marketing solutions to mostly consumer-facing companies. At the bottom line, we are one of the largest distributors of hotels, cruises, car rentals, resorts, and tours. And we were founded about 25 years ago. And we currently have more than 2,500 team members across the world. And we service 400 brands in 9 different countries. And the primary purpose of our organization is fueling our company's travel loyalty program. So I'm really excited to talk about what we've been discovering over the last year. And our clients include American Express, USAA, Marriott, and others. And we also have many direct-to-consumer travel brands, including iCruise and Red Week and Vacation Rewards. And if you were to ask my two younger daughters, who are 9 and 11, they would say, Daddy helps make people take better vacations. So I always find that to be the most simplistic way of describing it.
Greg Kihlstrom: Nice, nice, that's great. Well, yeah, and based on those names, I'm sure I've used your services over the years. So that's great. Well, yeah, so let's dive in. We're gonna talk about a few things as I mentioned, but I wanna start with this idea of bridging consumer preferences with brand offerings. And so we're seeing a significant shift in how consumers approach travel with evolving expectations, directly influencing brand strategies. So I wanna talk about How is Arrivia responding to these changes, especially in tailoring loyalty programs to meet these changing consumer preferences? So first, could you provide some insights on when we say there's a shift, what exactly does this shift entail and what does it mean for brands?
Jeff Zotara: Well, I think it really started with the pandemic and the acceleration of personalization as we now enter into a whole new world of AI. Consumers are becoming a lot more prudent and judicious with where they travel and how they travel and the platform in which they book their travel. And what we're seeing today is that consumers overall are really prioritizing flexibility. I mean, think back before the pandemic, we would never have thought about changing our flight without a change fee. And now there's so much flexibility around changing your flights or your hotel reservation, car reservation. And as we think about delivering the right products to our consumers, it's very important that flexibility is incorporated into that product offering. Secondly, I think value is of critical importance now with the economic conditions that we always experience in some way, shape, or form. The value of what someone gets when they travel is important, not necessarily to save money, but really to save money and enhance the experience at the same time. Then when we think about the mobile economy that we live in today, where we're all connected to our mobile phones and we can get anything we want with a touch of a button, convenience and user experience is incredibly important. As we build travel platforms from a UX perspective, we're always keeping that member in mind and providing a good, convenient, frictionless user experience. to ensure that they are moving at the pace that they currently are used to moving when they purchase something online with a one-click buy. And so there's a lot of change happening, especially around those particularly three areas. And what we're seeing, though, is we're seeing a little bit of a disconnect. what the consumers are finding most valuable versus what the brands that are servicing those users are seeing as the most important on their priority list. We recently released our 2024 Travel Loyalty Outlook report, and this is a It's a survey of many thousands of consumers who, of course, travel every year. And then we also surveyed those companies that have travel loyalty programs. And when we think and look at the data, we're seeing that there's a disparity where value is the most critical component of a consumer's journey. Yet, when you look at the brand side and what they're focused on, they're focused more on perhaps user experience, where only 5% of consumers feel that's the biggest pain point. So those are a couple different things that we see as being very different from what the consumer wants and what the brand is providing ahead of them.
Greg Kihlstrom: Yeah. So then what do you, I mean, a few interesting things in there that, you know, one is definitely the concept of value and how value is calculated, you know, because it's not it's not always purely financial, right? It's also the experience provided and stuff like that, but also that that disconnect exists between kind of brand perception and consumer perception. How are you adapting loyalty programs to, first of all, there's a gap there and there's, you know, there's a disconnect between, you know, both sides of that equation. But, you know, what does that mean as far as how you adapt your programs and, you know, to kind of match those and, and matching market demands, whether it's, again, consumer, brand, or some combination of both?
Jeff Zotara: Yeah, I think adapting to consumer demand and being agile is, in my opinion, the most critical factor of success. And when I think about agility and the ability to change on the fly, I think about what we're entering into this world of AI and what we've done in the last five years at Arrivia specifically, and all of our consumer brands that we work for and with, is personalization, I think, is probably the distinguishment that I feel is one of the most powerful tools to gain more market share, increase customer lifetime value. And when you think about it, we are sitting on more information available than we ever have in the history of our society. yet we still find it difficult to feel comfortable that we're getting a good deal and justify our purchase. And what we're focused on in helping our clients is how do we take our technology and connect all the different data from different sources and use that data to provide a better user experience and to reinforce that the consumer is getting a good deal. This could be in form of, say, live price comparisons on the front end, curated offers that are being displayed in real time on the websites. Predictive analytics is a powerful tool that we and all of our companies use to help predict where someone might go. As an example, largest seller of cruises in the world, we have a lot of data on if someone went to Alaska last year and they went to Europe the second time, where are they likely to go for the third time on their third cruise? And providing that omni-channel experience and that personalization to the end user, helps them find vacations that they're gonna be really satisfied with and have great value in and overall be super happy with their loyalty program and do it again and again and again because travel is the universal currency where almost everybody travels. And that's where we put a lot of our focus on is how do we personalize that traveling experience for our consumers and our customers.
Greg Kihlstrom: Yeah, yeah. And so you mentioned early on, one of the metrics, you know, customer lifetime value is certainly something that I'm seeing in my work, as well as more and more organizations are, it's not that they weren't taking this into consideration, but it's becoming a more and more pivotal metric for brands in general, but also for loyalty programs. And so, you know, I wanted to talk a little bit about this, you know, how you look at maximizing customer lifetime value while doing everything else as well, right, you know, ensuring long term engagement, profitability, all those things. So, you know, how should brands think about this need to balance engagement and enhancing and lifetime value through their loyalty programs?
Jeff Zotara: I think what our report is showing most recently is the fact that the consumer is really not getting the value out of their loyalty programs that they feel they should be getting. And some of that comes from the lack of education of the benefits that they do have. there's a lot of consumers that we deal with each and every day across our 400 different brands that just weren't aware of the diversity of offerings within the travel platform. Or if you just look at loyalty overall, they simply didn't have a good concept of what they could use their points on or where they could go using their points. And as we think about customer lifetime value, Education, we feel, is probably the biggest thing that's currently missing. I think a lot of companies are really good at promoting a sale or whatever it might be, but how do you develop that one-to-one relationship, and how do you use education as a tool to extend that relationship with the consumer? We can do it a lot of different ways with all the different marketing techniques and branding ideas that are out there. But I think doing it on a very consistent level and listening to the consumer and finding out where the gaps in education for their loyalty program might be is a critical part of making sure that they're happy. And then another thing is as we think about redemption on loyalty programs or different earning opportunities, members need and users need to be able to earn and burn across a wide range of different categories. Travel simply happens to be one of the biggest categories that loyalty programs use, and it's a growing category too. What's interesting to see is just in the last two years, those companies that have a loyalty program, more than 85% now have travel as being a big part of their loyalty program, whereas just two years ago, it used to be down in the 60s, 60%. I think companies and brands are realizing that, to my earlier point, travel is very universal. It creates great memories, and you usually are traveling to do something fun and celebratory and relaxing, and so it leaves yourself and you're a member with a really good sense of just a good feeling overall. And as we think about boosting this redemption and earning opportunities, using travel to do so is very important, doing it in a very personalized way. And then to my earlier point, making it very convenient is just a win-win for everyone involved.
Greg Kihlstrom: And so you mentioned something early on there that, you know, sometimes consumers aren't as educated about the potential offerings or the breadth of offerings available. And so you know, while some of that, a lot of that is going to fall on the brands to do, you know, just curious how, how you work and how you, you know, consult with with your customers on, you know, anything from marketing strategies to communication and all that, you know, in other words, it's a win win if customers know about the breadth of offerings and all that. So you know, how do you how do you work to make sure that brands have you know, the best marketing strategies to support that relationship.
Jeff Zotara: Well, and I started marketing many decades ago where it was a lot easier. You would buy some radio and television and print and you knew you'd be wasting half of your money, but you didn't know what half you were wasting. And it was a pretty simplistic job back then. But now we truly are technologists. Any marketer who's not a technologist, is, I think, at a big disadvantage. And I lean toward technology. And whether it's the use of AI or big data or more insight into the user journey, we now have the ability to measure everything from the first click all the way through the end of the experience through so many different technological advances today. And we're able to easily, as marketers, connect the offline journey and the online journey together. And travel, for the most part, on cruise is an example where we do a lot of good business. And 80% of that is done on the phone. It's still not an online experience, a lot of online discovery. But as you look at Cruise being an offline portal, it's important for our companies and the companies that we work with to set up that technology to stitch that user journey online, offline, to ensure we know what's happening, when it's happening, and what we can do to improve upon it. And travel too has dramatically changed in the last, just in the last 10 years or so. As you look at cruise or long trips, it used to be maybe back 10, 15 years ago, you'd go to a travel agent, you'd sit in their office and you would hammer out what you want to do over the course of two hours and you'd leave with your plans and it'd all be mapped out. That's just not the case. What we're seeing today is a lot of micro conversations that are happening. Someone might visit a website, peruse, think about it, come back, think about it again, come back, forward an email, forward links here, they'll see it on social, they'll share it with their friends, they'll get feedback from the family. And what we're seeing is that the average, it's taken about eight to 10 different interactions for someone to make that final decision and move forward. Therefore, what we're focused on is how do we make those interactions really powerful? How do we keep track of what's happening during those interactions? So when they call in, for example, or they come back to a website, that their experience is different than just say an anonymous user or someone we've just seen for the first time. And that's where our focus is on, is how do we empower the technology to communicate in all those channels across all those micro conversations and make it feel to the consumer as if they never had any interruptions on that journey. They felt that they can connect and reconnect with us whenever it was convenient for them. And that's where we've seen the biggest change, especially in the last three years, is how do we bring technology closer to the user in ways that had never been seen 10, 15 years ago.
Greg Kihlstrom: Yeah, yeah, definitely. And, you know, there's, I think there's another component as well, which is, you know, you talked about making it personalized to the end customer and, and making sure that that we're focused on value there. There's also the component of how does one provider, you know, how are they able to tailor not, not only their, their communication strategy and their brand, but, you know, how do they make their offerings feel unique and different and focus on their own unique value propositions to that end customer, while still using, you know, it's, it's, maybe it's a similar challenges in the e commerce world of, you know, there's similar platforms, and yet you can have vastly different shopping experiences. So could you talk a little bit about a little bit to that of just, you know, how how's a Rivia enabling your, you know, your direct customers to still feel like, you know, they have their own unique programs and stuff like that?
Jeff Zotara: Yeah, as we look at the our 2020 for travel loyalty outlook report again, and there's such a wealth of information we've uncovered with this, the disparity between the consumer and the brand again, as we discussed earlier, is prevalent in this case, meaning that What we are seeing out there is that the consumers want discounts on everyday purchases, as an example, but brands don't necessarily have enough of diversity around those types of discounts. And as we think about how we tailor our communication strategy or the overall awareness, we do this through personalization. It is a big one because I mean, I love travel because travel really is an endless inventory of many experiences, whether it's how you get there or where you stay or what you do when you stay. It has so many different possibilities. But the downside is there are so many different possibilities. And I think consumers get get a bit lost in the overwhelming amount of information they can or the over mounting places that they can go. So I believe that how we really differentiate ourselves and our brands differentiate themselves is in the way that we are showcasing the different opportunities and the different offerings. We really personalize different rewards, we personalize promotions, we personalize the recommendations to really cater to each of the members' unique interests. And collecting hundreds of data points and creating hundreds of different personalized audiences help us communicate more effectively to ensure that, going back to the education piece, that they're really aware of what offerings are out there. Because what I might be looking for is definitely very different than what another person is looking for. And I think if we maintain just a static presence of a website, we're absolutely losing out on a tremendous amount of opportunity. The other thing I'd like to touch on too is when we think about data and we think about zero party data, that data that consumers give to us willingly, overwhelmingly consumers want to give us more information. And I know that sounds contrary to most privacy conversations that I'm sure has been had. But this is this is data and information that the consumer is giving willingly and knowingly because they believe that if they can provide more information to the brands that they trust, that they are realizing the benefit of providing that. In return, they're getting more personalized offers and they're seeing the results of that zero party data. And I think as you take the zero party data, combine it with first party data, meaning where are they booking? What are they searching for? We're really crafting a phenomenal member persona for them. And in the end, delivering them exactly what they want. They want personalization, They want value. They want convenience. And at the end, they want a brand that they can trust and a platform that they feel comfortable using versus anything else that they might have considered in the past.
Greg Kihlstrom: Yeah, yeah, definitely. Yeah. And, you know, one simple example of that, you know, giving giving more information, you know, I'm a Marriott Rewards member. I like to stay on floors that are, you know, higher, you know, higher level floors or whatever, like giving that information. means that I never have to ask when I check in, I don't worry about it. I just I get what I want. All right. Again, that's a fairly innocuous piece of information. But to your point, it's like, some of that stuff, like I'm definitely willing to give because it just makes my life easier and actually improves my experience. So yeah, totally, totally agree. Well, Jeff, thanks so much for joining here. I've got one last question before we wrap up. Looking forward, what should brands be doing to continue some of the things that you mentioned here, enhancing value, enhancing appeal of loyalty programs? What do you see in your radar?
Jeff Zotara: I think most importantly is ask more questions. listen more intently, and most importantly, take immediate action. Asking the right questions of customers, listening to their responses, and innovating new product offerings that not only meet those customer expectations, but really go to exceed them. I stress again, there is still a very big disparity between what consumers are preferencing and what the industry is focused on. And this disparity results from brands, in my opinion, not actively listening to their members enough. It's not that they're not listening, they're just not listening enough or taking more immediate action. And overall, listening is a 360-degree strategy that includes both the online and offline channels. Good news, though, is that with AI, the data that we have access to, it's becoming easier than ever to be more agile and to change for our members. And overall, it's a really exciting future for all of us in loyalty and travel, and especially for marketers out there So I have a very optimistic view of the future with everything that's transforming before our eyes today. And Greg, thanks so much for having me as a guest here. It's been a really big pleasure.