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How Financial Brands Can Drive Growth and Loyalty Through Travel Rewards

travel survey pandemic
Archives, Commentary, Education, Global Trade Daily

How Financial Brands Can Drive Growth and Loyalty Through Travel Rewards

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Like many consumers, my purchasing habits changed during COVID-19. I went from buying the occasional shirt online to purchasing everything from a website. I was not alone. According to Digital Commerce 360, U.S. consumers spent $870.78 billion (about $2,700 per person in the US) online in 2021, up 14% from 2020 and a
level we would not have reached until at least 2023. Despite a broad resumption of in-person experiences, this trend shows no sign of slowing down with online spending in the United States expected to hit a record $1 trillion in 2022.

That presents an incredible opportunity for banks and credit card issuers to capture more consumer spend. After digital and mobile wallets, credit is the most popular way to pay for online purchases. Yet as with any opportunity, there are threats. Credit card companies and banks face a slew of competition from fintech firms like buy now pay later unicorn Klarna, which has a pulse on how Gen-Z and millennials want to pay for their everyday purchases.
That’s why credit card issuers and banks must find ways to engage these up-and-coming generations, who are leerier of debt than their parents.

With most Gen Zers citing “travel and seeing the world” as the top way they want to spend their money, travel rewards can be one of the most effective ways to gain their loyalty. However, simply offering these rewards is not enough to grow this credit-skeptic market and retain existing customers. In a time of incredible choice, financial brands that want to leverage travel to increase their share of wallet and keep their cardholders active and spending need to rethink their travel loyalty game and seek partners like arrivia that will help them turn their programs into full-fledged, digital-first platforms.

Loyalty rewards and the value problem

The modern financial services industry has always been a competitive space, and customer retention is the key to
success; an often cited (but still true!) axiom is that a 5% increase in customer retention can result in 25%-95% revenue growth. Loyalty programs are meant to incentivize this behavior by providing customers with rewards like cashback bonuses and points that can be exchanged against goods when they spend using their cards.
Unfortunately, many programs aren’t generating the retention and engagement they could.

According to a recent arrivia survey on consumer attitudes and preferences around loyalty and travel, 81% of credit-card holders belong to five or more loyalty programs. In comparison, 56% belong to a loyalty program with travel benefits. Though adoption is high, points redemption, which is one of the most important KPIs loyalty
marketers must measure engagement, is comparatively low. That’s because the value of rewards often fails to meet customers’ expectations.

That isn’t a secret. In another arrivia survey around travel loyalty, we asked industry decision-makers about some of their biggest pain points regarding their loyalty programs. Almost 30% of respondents said they struggled to demonstrate the value of their rewards to customers, while another 19% admitted to not being able to offer
customers the variety of rewards that they want. These numbers are even higher when filtering the responses of decision-makers in the financial sector (26% and 23%, respectively).

Putting the value back into loyalty through travel

For a modern loyalty program to successfully attract and retain its members, it must:

1. Offer a variety of highly attractive rewards
2. Provide excellent customer service
3. Make it easy to accrue and redeem points
4. Provide an omnichannel, personalized experience

When it comes to rewards, our research shows that travel is one of the most attractive redemptions available, with nearly half of the consumers we surveyed in January 2022 saying it is “extremely” or “very” important that they can redeem rewards or points when booking travel. This number jumps to almost 60% for Millennials and Gen-Z.

That should come as no surprise as these younger generations are well-known to put a premium on experiences over goods.

In fact, Gen-Z travelers are much more likely than Baby Boomers to use travel points to book an exclusive trip or activity unavailable anywhere else. Though they might be wary of debt, they crave the perks of credit card programs.

Yet, according to our survey, many consumers (53%) say their financial institution offers no travel rewards at all. And when they do, they provide limited options instead of the ability to book their entire trip through their rewards program. Credit card companies and banks that go beyond the big three — air, car, and hotel — to include options like exclusive experiences, cruise and alternative accommodations are more likely to capture a bigger share of their customers’ travel spend and a sizable portion of their everyday spend. By setting up a dedicated booking platform that they fully control, they can generate more revenue on their travel products.

Personalizing the travel rewards experience

Offering the ability to book travel is one crucial aspect of successful travel rewards programs. The next step is incentivizing customers to redeem their loyalty points and maintain engagement with the program. That means doing away with the blanket, one-size-fits-all approach utilized by so many reward programs. With the right
technology partner like arrivia, financial brands can leverage the information members share through their profiles and online activity to craft attractive offers that speak directly to an individuals’ actual desires. According to our Q1 US travel loyalty survey, this is particularly important to digital natives who are more likely to seek trip inspiration from social media and their friends than older generations.

We also found that 23% of surveyed consumers incorporate their travel loyalty programs into the inspiration phase of their planning process, consulting those sites to discover high-value trip ideas. In this context, a dynamic travel booking platform that highlights relevant travel offers based on an individual’s profile is an influential sales tool to increase conversions and redemptions. However, a static platform with no personalization might do the opposite and erode users trust in the platform’s ability to deliver the value they are looking for.

Capitalizing on the travel rebound

After two years of starts and stops, travel is back. In our survey, 69% of respondents said they plan to travel in 2022, while 24% had already booked their trip. But just as they did before the pandemic, consumers prioritize value— an exclusive discount, a good deal on a vacation package or using reward points to defray the cost of a
luxury trip. Credit card companies and banks can satisfy this pent-up wanderlust by ensuring their travel rewards programs provide customers with the travel and booking options they want and savings they can’t find anywhere else. If consumers’ loyalty programs can’t or won’t meet these expectations, they will book – and spend –somewhere else.

Loyalty program technology is part of why companies aren’t meeting their members’ expectations. Our travel loyalty report found that 39% of surveyed business-decisions makers said their program members could not book travel directly through their platform, which is a missed opportunity to capture their travel spend. Companies are also in danger of missing out on the travel rebound because they haven’t adapted their travel rewards strategies
to customers and members changing priorities. They either haven’t expanded the variety of travel options available or taken steps to streamline their earning and redemptions processes or explored new ways to pass on value to their members or incentivize additional travel spending.

Consumers – particularly the younger generations – have clearly articulated their preferences when it comes to travel rewards: they want value, they want options, and they want a one-stop-shop. And as they prepare to travel freely again this year, they will be turning to their loyalty programs. With the right technology partner like arrivia, your rewards program can meet their expectations, capture a bigger share of travel rebound spending, and create more loyal, engaged members along the way.

About the author

Travis Markel is arrivia’s Chief Experience Officer. With more than two decades of experience in travel and loyalty, Travis helps financial service firms and other companies with travel reward programs build long-lasting relationships with their customers.

heavy equipment
Archives, Global Logistics, Global Trade Daily, Trucking

The Best Ways to Save Money Transporting Heavy Equipment

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Many fleet managers and owners eventually need to transport heavy equipment. Although that can be a costly endeavor, there are some practical ways to make the costs more manageable.

Understand Which Factors Affect the Overall Cost

Numerous aspects help determine the estimated costs for hauling your load. For starters, as the size of a piece of equipment goes up, so does the number of people getting the cargo ready for the journey and operating the trucks that bring it to the destination.

Additionally, some equipment needs a forklift or crane to move it onto a vehicle, such as a flatbed truck. In such cases, the costs would be higher than if there was no need for that extra equipment.

It may also be necessary to use packaging equipment so that the heavy loads stay secure while in motion. If a client can provide such supplies themselves, that’s a practical way to cut costs.

The distance traveled also impacts the cost, which is why it’s vital to take the time to explore various routes to reach the destination. Additionally, if a haulage client wants extra services, such as load tracking, those raise the costs.

Once a person becomes fully aware of all the potential cost drivers, they’re in a better position to explore how to keep those aspects more manageable.

Read Freight Company Reviews

All too often, the people who try to cut costs on essential services find they get what they paid for in all the undesirable ways. However, that’s not universally the case.

Online reviews are excellent resources for helping people locate equipment-hauling companies that offer great service and are also reasonably priced. Spending time looking at those helps eliminate the options that may be overpriced and subpar.

Checking out reviews is also a more efficient process when people search for keywords in batches of feedback. Phrases like “best rates in the area” or “reasonable prices, despite my heavy, oversized load” make it easier to determine that a company’s prices are among its most appreciated characteristics.

Choosing the first company that a person finds is not a practical way to save money because there’s a significant chance they’ll pay more than they should. However, looking for price-related feedback is a great way to get steered in the right direction when researching what’s available.

Think About Renting Locally to Reduce Transport Costs

Another way to potentially save money is to assess whether it’s essential to move heavy equipment to the site. For example, the people who plan construction site work often determine it’s more cost-effective to rent locally.

That’s especially true when contractors accept work outside their local areas. Sometimes, such jobs are even on the opposite side of the country. Considering the amount of heavy equipment that may be required for one job, it doesn’t always make good financial sense to transport everything to a site.

Another thing to keep in mind is that certain pieces of equipment may be harder to transport to a site than others and could only be needed for specific job requirements. For example, telehandlers are a type of construction equipment used to reach high places. Although they come in various arm lengths, transporting them could still bring higher costs than renting due to the overall size.

Consider How Owning Transportation Equipment Might Bring Costs Down

When people pay for heavy equipment transportation services often, they may lose sight of how the overall costs can rack up quickly. For example, once they break down the associated costs of each journey and the frequency of those trips, it may become clear that they could save money by owning an equipment trailer and taking care of the trips themselves rather than hiring an outside party.

Many dealers of used heavy equipment offer financing arrangements to make purchases more manageable. The associated repayment periods are usually from one to three years, and there are variable interest rates with these agreements. There are similar arrangements for used equipment trailers.

It’s not necessarily feasible for someone to handle all their own heavy equipment transportation needs. However, that’s why it’s useful to look for patterns associated with the times when they hired a heavy equipment transportation service over the past year. Were there certain types of trailers typically used to meet those needs? If so, that’s a strong indication that investing in such equipment could save money over the long run.

Look for Opportunities to Reduce the Equipment’s Size and Weight

Heavier and larger loads are typically more expensive to haul than those that are smaller and weigh less. Thus, cost-cutting measures could involve disassembling the equipment and transporting it in several loads versus only one.

States have different requirements about what constitutes large and heavy loads, so people should always learn the correct details before moving ahead with a decision. It may seem counterintuitive to ship equipment across more than one load. However, this approach could be a surprising way to cut costs.

People hiring freight specialists to move the equipment should strongly consider getting input from them about how to make the equipment size and weight more manageable. Once a load’s weight crosses a certain threshold, it’s under the jurisdiction of whatever states the trip involves. Thus, splitting the weight across multiple loads could also help a person save money by not paying for the permits required for heavier cargo.

Pack Trucks and Trailers Tightly

In cases where there is not a concern of a load being overweight, people can often end up saving money by ensuring there is no wasted space on a truck or a trailer. Failing to utilize all the available space could mean people pay more than necessary by making several trips to transport everything.

It’s sometimes possible to get everything moved in one or two loads, provided people take the time to figure out the best ways to take advantage of the space. Keep in mind that certain costs, such as fuel and route-related expenses, will be the same regardless of whether an equipment trailer only has one item in it or is packed to capacity.

Therefore, particularly in cases where a person needs to move a lot of equipment at once, they can often achieve better cost-related outcomes by figuring out which pieces to transport together. Paying attention to aspects like the size, weight, and shape makes it easier to figure out what fits where.

Minimizing Equipment Transportation Costs Is an Achievable Goal

It takes time and effort to determine the best ways to keep transportation costs down. However, people should remember that the ideal strategies differ depending on the equipment to move and the available budget.

financials
Archives, Global Logistics, Global Trade Daily, Special Reports

To Really Move the Needle, You Must Move the Financial Needle First

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Today’s supply chain management and manufacturing executives live in a finance-driven world, managing profit and loss sheets, dealing with working capital issues, and collaborating with CFOs. Furthermore, the ultimate measurement of a company’s performance is often the stock price or valuation, which is why you should start every day with the same mindset and look at your business’s financials.

When you examine financials, you should always have your specific goals in mind. The market is bursting with tools that promise to increase throughput, boost sales, and solve all kinds of issues, but it’s vital to focus on your own goals and objectives. What problem do you want to solve? How can your data help reorient the material flow to free up cash without jeopardizing the business?

Ultimately, most executives have three priorities: making more sales, managing variable costs to improve margins, and keeping customers happy. When I look at financial reports, I’m really interested in seeing the inventory and the cash flow statements, because the health of supply chain and manufacturing operations is often reflected in the cash positions and inventory of a company.


Measuring Financial Health in the Supply Chain

Instead of getting straight to the nitty-gritty and doing defect analysis on every production line in every factory, it’s critical to understand where the constraints are from a demand perspective. Look at historical data to determine best-case scenario demand and worst-case scenario demand, and apply data from the end-to-end supply chain to start mapping demand and identifying capacity constraints.

The farther upstream bottlenecks are, the more value they’ll create naturally because there’s always a bullwhip effect. By eliminating them, you can either sell more products or capture more market share.

If you want to increase your bottom line, that’s the process to use. Look at financials first to map out the value chain and see where inventory is most concentrated. Then, identify opportunities to free up cash and address immediate bottlenecks by investing in capital expenditures or reorienting the material flow. Both are quicker options than, say, getting injection molding machines installed on the production floor.

Supply chain management is a delicate balance of financial and operational processes, and business growth requires the right perspective. To move the needle at your organization, prioritize these strategies:

1. Remember that cost optimization doesn’t cause growth.

Anyone with a college degree can come in and cut costs. It’s not difficult, and engineers are constantly focused on making technologies that are cheaper and faster. The issue is that a lot of the people who generated growth before the cost-cutters arrived made a deliberate effort to create excess capacity that can support a certain environment.

Everything’s about pennies and dimes these days, but instead of trying to be as cost-centric and effective as possible, a growth mindset requires you to focus on what’s selling and find out how to make your supply chain faster. The more orders you can fulfill, the more money you can earn. If you want to grow, you can’t start by cutting costs. Instead, figure out what’s selling and reorient material flow to turn that product over faster and build up your cash reserves.

2. Step back and measure your efforts.

Supply chain and manufacturing executives are incredibly busy with day-to-day operations. However, it’s important to take a step back, look at your performance data for the last three to four years, and see if the effort you’re putting in is actually leading to sales.

We live in a world where IT is integral to everything, including connecting downstream sales data with operations. This data can help generate forecasts, mitigate risk, and even produce crisis management plans for all the different scenarios that could play out. When you can look at performance data on a global scale, it can build resilience, reduce the waste in your supply chain in the form of buffers, and ultimately preserve your cash flow for growth.

3. Work more closely with the C-suite.

Don’t position yourself as a cost-centric value add. Today’s procurement and supply chain executives are all about getting the best deal, but that doesn’t really matter. It’s great if you can get the best deal, but it’s far more important if you can get customers buying more and logistics providers and suppliers moving the next products into place with the fastest turnaround times.

Executives in supply chain and manufacturing need to have the ear of the CEO and CFO and have an idea of all the levers in the business. With a holistic, end-to-end view, supply chain manufacturing executives can come up with operational improvements and confidently tell sales, “This is what we can realistically make.”

Supply chain and manufacturing executives need to quit the penny-pinching and recognize that cost-cutting measures can’t achieve the groundbreaking growth they want. Once supply chains are accelerated and product is moving off the shelves, you can start looking at the challenges that emerge on a global scale and identify different resources that could help overcome those challenges and demonstrate proven ROI.

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Ali Hasan R. is co-founder and CEO of ThroughPut Inc., the AI supply chain pioneer enabling companies to detect, prioritize, and alleviate dynamic operational bottlenecks. Ali has unique experience in onshore and offshore supply chain management in the U.S., Russia, United Arab Emirates, Saudi Arabia, Pakistan, Bahrain, and Yemen.

business
Archives, Banking, Global Trade Daily

What is the New Normal for Businesses and AP?

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What do the oracles say about society’s return to normalcy? Bill Gates is pinning his hopes on a semi-normal return to life in the spring of 2021, provided we rapidly adopt the vaccine. Dr. Fauci’s more conservative estimate suggests that we’ll enjoy movie theater experiences, indoor dining, and regular school attendance by late fall.  But the experts’ jockeying of vaccine rollout timelines and predictions of how soon we can reschedule that twice-canceled family vacation leave one fundamental question unanswered:

What aspects of normalcy are actually worth returning to? 

The pandemic’s clarifying challenges to businesses were not thoroughly negative. Post-pandemic businesses have adapted by interfacing with technology to get the same tasks done with less redundancy and bulk. Daily operations have stripped down to bare essentials, some bearing costs to the customer, but many renewed in their devotion to make a more human connection with those they serve. Data security issues took a tremendous and necessary spotlight as a historic number of the U.S. workforce scrambled to telecommute.

Covid-19 shattered all illusions about how quickly any industry, company, or market can change. 

There’s no crystal ball to consult when it comes to making big changes with very little advance notice. Data by McKinsey indicates how businesses stayed lean and financially solvent through the initial shutdowns and subsequent quarantine measures. According to McKinsey & Company, businesses that transformed their processes in 2020 nodded to agility as the key ingredient of their success. In the business sense, “agility” is defined by smaller teams that are built to work with rapid efficiency in place of traditional business models with several tiers of leadership per business unit. McKinsey tracked 25 companies across 7 business sectors in their handling of the COVID-19 crisis.

Here is the resounding sentiment of what they found:

Through our research, one characteristic stood out for companies that outperformed their peers: companies that ranked higher on managing the impact of the COVID-19 crisis were also those with agile practices more deeply embedded in their enterprise operating models. That is, they were mature agile organizations that had implemented the most extensive changes to enterprise-wide processes before the pandemic.

The benefits of agility were measured in overall customer satisfaction, employee engagement, and operational performance. They found that swifter decision-making, less time determining priorities, and faster and more flexible response processes lent themselves to the business’ overall success. In other words, being agile made everything easier.

Nimble, clear-communicating teams enabled with good technology outpaced their slower, bureaucratic counterparts.

A clarion call from a pandemic-tested economy is this: the bustling office setting is becoming increasingly outdated. A small, remote team working closely is capable of outpacing any team that sits less than six feet apart–and with less overhead costs.  This is a matter of understanding the amazing flexibility of a business operations model. With technology, we now have the ability to decentralize while staying connected. Sounds paradoxical, but then again, so did social distancing.

While change is good, identifying the right kind of change is essential. Here are three guiding principles:

1. Keep Your Business Unit Nimble With an Agile Mindset

Examples of an agile mindset include giving up meeting-heavy schedules and manual workloads and renewing decision-making agency in small teams. Even if the organization at large is still insistent on doing things the old way, your business unit can lead to small changes with great effect.  What’s not working with your current accounting operations model in accounting, IT, or even on the executive level? Can you digitize any of your backlogged manual tasks to alleviate the stress on your team and improve supplier relations?

But don’t mistake agility for speed. Speed is fast but can be blind. Agility is about delighting both the customer and those who serve them in the delivery of a seamless and elevated process.

2. Add Collaboration Tools as a Lifeline Resource for Your Team

The 2021 workforce demands exceptional collaboration tools. As projections still hang in the air of remote work persisting into the better part of 2021, it is essential that good communication infrastructure is in place to sustain team morale. Longevity is about more than just crossing the finish line, but lifting burdens of redundancy and frustration. As willpower to stay connected wanes and team needs inevitably change, it is essential that touchpoints are added between managers and employees to prevent burnout and ensure team goals are attainable and appropriate. Ask your team what heaving lifting they need assistance with and keep an eye toward any solution that may bolster cross-functionality and productivity within your team.

3. Retrofit for the Employee of the Future

Whether or not we retain the same jobs we had at the outset of 2020, job demands will have changed. Safety and wellness concerns have skyrocketed in the eyes of the consumer while values like convenience or ease of access have diminished in proportion to the limitations imposed on our lives.  Product models will need adjustment. New verticals that businesses once sought to launch into may have dried up, leaving sales teams to pursue other avenues.

Providing the workforce with more analytical tools, businesses can add value to employee roles by grounding decision-making in data points and allowing for greater transparency to daily tasks. Through new technology, the elimination of legacy technology, needless redundant tasks, and paper touchpoints, the workforce can rest more securely in the face of unanticipated threats to their employability.

Our technology, operating models, and accepted biases of ‘how things are’ must all change when presented with the data on how things can be done differently.

Change is no longer a back-of-the-handbook contingency plan. Grit and ingenuity hold the silver lining to a resoundingly difficult year. Perhaps reversing to the way things were is a farce. The next normal will provide us gradations of clarity as waves of vaccinations roll out and restrictions ease in the late months of 2021. Yet what we do with the clear opportunities already here is a truer prediction of future business success.

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Lauren Ruef has collaborated with Nvoicepay, a FLEETCOR Company to write about financial technology since 2016. Nvoicepay optimizes each payment made, streamlines payment processes, and generates new sources of revenue, enabling customers to pay 100% of their invoices electronically, while realizing the financial benefits of payment optimization.