You know who you are. You found that round-trip to San Francisco from LaGuardia on Orbitz for $322 and bought it on United.com for $315. This kind of thing occurs online all day, every day. It's just the way many people use such sites. Of course, it's a real problem for the travel sites themselves.
This being the summer travel season, and me being the same kind of cheapo flier that most of you probably are, I've used these and many other Web resources to book travel in the past few months. I've been intrigued with the ways some airlines have tried to keep users loyal to their sites in these trying times for the industry. One firm in our space has taken a close look at this phenomenon through some rigorous means and what they found makes me think that such sites have it harder than I would have anticipated.
eVOC Insights is a customer experience consulting firm that focuses on Web strategy, usability, and the "voice of the customer" research. They are a market research firm that leverages technology to analyze situations like the one described above, providing insights from this analysis to clients. eVOC has offices in San Francisco and in Denver, and is run by two alums from Vividence Corporation, which was one of the real leaders in this space prior to their acquisition by Keynote Systems in September 2004.
Since online travel is one of the largest segments for consumer spending on the Web, and choices for where to research and purchase travel online continue to multiply, the conditions described above will likely make this segment even more volatile for its participants and backers.
Expedia, Travelocity, and Orbitz have long led the industry with competitive prices and convenient travel packages. However, travel suppliers and airlines with major brand recognition such as Southwest, Delta, American Airlines, and United pose a formidable threat to the online travel agencies. Some of those same airlines helped found the discount agencies - such as United's relationship with Orbitz. Airlines can drive their incoming phone traffic to their online assets and sell direct to consumers online as much as possible. Many airlines have created sizable rewards programs to drive online loyalty - like adding 1,000 miles to users' accounts for every online purchase.
As top brands strive to differentiate, eVOC has tried to answer the following questions: What are consumers looking for in an online travel experience? Do consumers remember and do they recognize a unique brand identity? Does loyalty exist among online travel agencies, or are consumers simply shopping for the best price? Where and how should online travel agencies invest in building a brand versus new features versus competitive pricing strategies?
eVOC produced a Competitive Research Report in this regard with a partner company RelevantView. Some of the report's highlights include:
Online travel agencies and travel search engines dominate the online travel market, securing 10 out of the top 15 travel sites visited on the Web.
Ninety-four percent of users expect competitive prices from online travel agencies, followed by ease of use (86%) and good customer service (82%) Interestingly, the customer service of these sites is almost invariably better than that of the airlines, especially when purchasing online.
Consumers are twice as likely to prefer Expedia or Travelocity compared to Orbitz for purchasing leisure travel online.
The previous bullet notwithstanding, between Expedia and Travelocity "loyalists," 40 percent are likely to switch to another site to make a purchase.
So, what can online retailers in commodity industries like online travel do to keep users more loyal to their brand from initial search through the actual transaction?
"Providing competitive pricing is a primary concern for online travel agencies," according to Claudette Levine, cofounder and partner of eVOC Insights. "Providing users with enhanced, flexible search capabilities has become paramount to success in this congested online marketplace. Knowing when to solicit relevant information and when to offer meaningful cross-selling options can be the difference between a consumer purchasing on your site or defecting to a competitor's site."
The aforementioned Claria research complements the eVOC research. As major air carriers continue to see their fortunes flounder - Delta Airlines is the latest to publicly discuss Chapter 11 - the companies that direct a growing amount of revenue to these carriers seem to be getting it right, despite the dearth of meaningful user loyalty that makes almost half of them shop in one place and buy in another. Look for more programs to keep users loyal to individual sites, as more airlines struggle to make their numbers and margins throughout the industry continue to sag.