As the end of the school holiday beckons, now is the time to be taking stock, planning, and capitalising on your customer’s post summer holiday goodwill, and working towards ways to retain, develop and invest in those customer relationships.

As many as 76% of people chose to book their holiday online in 2016, according to an ABTA report released in June. That’s a huge amount of potential revenue from existing and new customers, but, how do you take advantage of this and maximise your marketing spend to ensure these customers don’t remain transient but go on to buy from you in the future?

You need to be offering more than the lowest price and great customer service to build a loyal customer base. The internet is flooded with providers, and so how do you cut through this noise to reach and retain customers?

A referral programme can offer the travel sector an obvious and straightforward solution to retain and secure qualified new customers.

It’s recognised that happy customers can be a brand’s best advocates and that word of mouth is one of the most effective ways to share good experience. The right ‘refer a friend’ scheme, delivered with the right partner, can reward a loyal customer and encourage them to share your brand with friends or family. This has a dual benefit; not only assisting you to hold on to existing customers, but providing an introduction to new ones - who by virtue of their relationship are likely to be within your target demographic.

When a friend shares a brand they act as a filter for relevance, creating a path of credibility and trust. Not only this, but the friend will be predisposed already to positive brand sentiment before making a purchase, as their friends have been eulogising about you already.

Few travel providers are taking full advantage of this and systematically driving referral through a dedicated channel. The biggest barrier can often be a lack of awareness of the mechanics of setting up and running the scheme, and of its simplicity and effectiveness. Here are a few pointers for anybody in the travel sector looking to introduce a referral campaign.

Psychology of Referral: Knowing your Customers

To make the most out of referral, think first about what would motivate your customers to refer a friend.

We refer to the main driver as ‘Social capital and social risk’. The customer will ask themselves questions such as: ‘Will this make me look good?’, and ‘How concerned am I that this will be received negatively?’ Your customer won’t want to be seen as self serving, and so using the design, and the specifics of the offer metrics to demonstrate feelings of generosity rather than self interest can be a good driver.

Testing and Optimising referral

This is critical for referral success, and has another benefit - understanding your customers:

- Learn about how customers react to referral offers and what they think about your brand.

- Witness how customers talk about you as a brand in referral emails and messages.

- Discover who your most valuable customers are. They may not be the ones spending the most money with you but be the ones who introduce the most customers.

- Referrer incentive, ‘Do I really want this?’. In order to act as an incentive, a reward has to hit the customer’s sweet spot. The incentive possibilities are endless, from discounts, to third party gift vouchers to loyalty points. Start with a hypothesis about what works for your audience, then test, test and AB test some more to refine and optimise that offer for conversion.

Barriers to Referral

An offer or process appearing too complicated or requiring too much time on the part of the referrer or friend can be an instant blocker. Consider the effort required:

- The most effective time to promote referral is at the point of delight which can often be post purchase. Making it easy for your customers to then tell their friends is imperative

- How easy will it be to retain the reward? How many steps, or pieces of data are you asking from your customer in order to sign up? Offering your customers all the sharing options possible (email, Facebook, WhatsApp) is the fastest route to success

And so with circa 76% of holidaymakers booking their holiday online, and heralded by the oft quoted fact that consumers start thinking about booking their next holiday as soon as they arrive home from their last, can you afford not to be experimenting with a referral programme? This could be the most effective marketing and customer nurture move you make all year.

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