Being an entrepreneur in the competitive travel market is always going to be challenging. After all, revenues in this market tend to fall during times of economic hardship and austerity, which in turn squeezes margins and can cause long-term damage to smaller brand.
As a startup trying to differentiate from the amount of competitors who regularly enter the sector. one of the best ways to negate this influx is through a progressive marketing strategy, which helps to drive customer retention and enables companies to capitalise on the opportunities that do remain during difficult times.
The retention of existing customers is an important consideration when looking to increase margins, as it is approximately five-times cheaper to maintain an ongoing consumer relationship than it is to build a new one.
Two marketing methods that enable travel brands to increase their margins
With this in mind, let’s take a look at two marketing techniques that travel brands can use to increase and ultimately optimise their margins. These include:
1. Deliver consistent rewards such as affordable business class flights
We start with a relatively obvious and extremely effective technique, which is built on the premise of experience marketing. The delivery of a rewarding customer experience will not only turn casual customers into loyal patrons, but it also offers opportunities to increase margins and in some instances build brand new revenue streams.
A good example of this would be to offer affordable, business class flights to your customers as part of your marketing drive. This has become a seminal trend in recent times, with established airlines (such as the Emirates) and travel providers like Justflybusiness.co.uk who specialise in business class flights that are competitively priced and enjoyable.
Such flights boast a naturally high margin for airlines, so by discounting the bottom line cost they can reward their customers without damaging their bottom line.
This will both win new customers and improve your relationship with existing patrons, driving brand loyalty and ultimately increasing your long-term margins and growth potential.
2. Invest in affiliate and partner marketing-orientated
The concept of affiliate and partner market has existed for more than a decade, but it has experienced a noticeable surge in popularity in recent times.
This is also part of a wider trend in marketing, which has seen an estimated 61% of brands declare their preference to evaluate the performance of their campaigns with the assistance of a third-party business or platform.
In terms of affiliate marketing, this offers incredible opportunities for brands within the travel sector, particularly when it comes to acquiring new customers.
40% of brands use affiliate marketing for this purpose, primarily because it reduces their initial cost-base through a commercial partnership and increases their potential ROI as a result.
The key, of course, is to select relevant and mutually beneficial partners, who can add value to your proposition and engage your audience.
The bottom line
These techniques are extremely effective, and an enable travel brands to increase their profit margins both in the short and longer-term.
We would always recommend maintaining an emphasis on customer experience and retention, however, as this holds the key to sustainable growth and helps with the process of reducing costs (which often eat into the margins of even premium products).