Travel Reference
In-Depth Information
By personalizing the product via recognition of the target market and micro-segmentation,
organizations have the opportunity to increase brand recognition on a one-to-one basis, thereby
building loyalty (Heldal, Sjovold and Heldal 2004). Customers often attribute anthropomorphic
characteristics to brands and identify with them, self-justifying their investment by displaying
attachment, telling others of their positive experiences and becoming resistant to change
(Reichheld
et al
. 2000). The relationship develops through an investment of resources from both
sides, and organizations must freely share information and make evident the special position of
loyal customers (Reichheld
et al
. 2000). They must also commit to customer expectations
of a high level of overall interaction and service (Hamid 2005). Where service fails to meet
expectations, the results can have a negative effect, such as displayed by a disgruntled airline
passenger who broadcast a YouTube posting 'United Broke My Guitar', which has had over
12 million views (Kietzmann
et al
. 2011).
Customer loyalty schemes
There is a growing body of literature that suggests while loyalty schemes may promote repeat
sales they are not particularly successful in retaining customers. The cost of a loyalty scheme
in some cases has been found to exceed the revenues from increased sales. Morais
et al
. (2004)
found that the tourism market was 'rushing to establish loyalty programmes' while empirical
evidence suggests that such programmes are ineffective. They argue that customers are infl uenced
by more intangible elements such as an environment of trust, status and information. In contrast,
Verhoef (2003) found that loyalty programmes using customer incentives increase retention of
customers. His fi ndings contradict the literature, but Verhoef suggests that this shows that loyalty
schemes have to work in addition to other customer relationship initiatives. Indeed, loyalty
programmes such as frequent fl yer accounts have become as ubiquitous as the ATM and they
are no longer a competitive advantage or CRM tool but a necessity in the eyes of the customer
(Gamble
et al
. 2000). The advantage of loyalty programmes will therefore lie in their use as a data
collection tool and as an incentive to reward certain consumer actions, such as promoting certain
purchases or encouraging SST use. However, with the advent of smart cards fi ner levels of
information gathering on customers, including searches and purchases, will be possible and
potentially increase the value of loyalty schemes to organizations (Vogt 2011).
Community sites
A business model that has connotations for building loyalty is that of the business sponsored
online community, which is fi nding favour with more organizations (Preece and Maloney-
Krichmar 2003). Although creating an effective community is slow in terms of revenue returns,
the contribution to the development of customer relationships can be considerable (Stockdale
and Borovicka 2006). Communities allow for businesses to communicate with their customers,
but also for participants to exchange ideas with each other (Vatanasombut
et al
. 2004). The
tourism industry is well suited to the business community model as the social elements
inherent in leisure travel encourage peer-to-peer interaction, the industry is highly information
dependent, and it has a diverse customer base (Werthner and Klein 1999). The high level of
interaction encourages the sharing of travel information and mutual support between customers
and introduces a hedonic element that is often overlooked in the travel industry (Stockdale and
Borovicka 2006). More recently, community has become a central element of social media use
although Hvass and Munar (2012) found airlines tend towards formality on their social media
platforms, using a traditional command and control approach that does not sit well with the
