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Free can be Expensive: Freemium Vs Premium Apps for Travel Agencies

Major travel brands wouldn’t dream of hosting their company website on a free development platform. That’s not how they want to present their web business to the world. So why would the equivalent in the mobile space be acceptable?

Mobile has increased the number of interactions between traveler and agency - there are now dozens of end-user touchpoints along the journey. Each of these is an opportunity to position the brand as omnipresent and indispensable to the traveler.

Often Travel Management Companies (TMCs) make use of free apps to deliver mobile itinerary services to their clients. While there are advantages in terms of cost savings, they are missing out on vital opportunities to strengthen their brand, improve customer loyalty, and develop their reputation for excellent customer service.

While there are advantages in terms of cost savings, travel companies are missing out on vital opportunities to strengthen their brand

Premium v. Freemium  
While free apps have their uses and cost advantages, they repeatedly come up short when pitted against the rising complexity of services and features offered by a premium version. While free is fine, it’s important to remember that innovation doesn’t have a template or come as a one-size-fits-all solution. And when people talk about “premium”, remember they’re typically talking about premium products, not  premium prices. Let’s take a look at how freemium and premium compare:

  • Brand awareness
    Free apps are usually unbranded, have only a minor trace of the agency brand, or more often than not, prioritize the third-party provider’s badge. This dilutes the travel company’s impact and perpetuates a disconnect between them and their customers.

  • Brand perception
    An agency’s brand is reflected in the manner that they service their travelers via mobile. Being available during disruption and being seen to help ‘when the chips are down’ are crucial to developing a strong brand identity dedicated to customer service. With your own branded app, end-travellers typically have immediate access to the trip details and the relevant out-of-hours support contact number during an unforeseen emergency. This means the user has access to the relevant information, and has the ability to call an agent if required, which can transform how they perceive your brand. 
  • Brand control
    A free app does not allow an agency to reinforce brand awareness to the same extent as its premium counterpart. If an agency has no control over the environment where the brand is seen and the mobile space where customers are interacting with it, it can be damaging. Free can be expensive in this scenario since it undoes some of the work the company has done building up brand personality across other channels. Does the agency really want to be seen as the economy version of itself on its mobile channel? Without full brand control business travelers are not aware who their TMC is, since the app they download carries someone else’s icon. Even if they do know, they may form prejudiced opinions about the company and the quality of its service if the mobile experience is poor. 
  • Analytics
    All the stats point to the fact that travelers are increasingly relying on their mobile throughout the travel journey. A recent report by the Aberdeen Group found companies using mobile analytics saw an 11.6 % increase in brand awareness while those without a mobile-specific analytics strategy had a 12.9 % decrease. Without access to the key analytics data of their users, agencies are deprived of the insights that help them to better understand the traveler engagement. Since free tools don’t offer this level of insight, the usage, conversion rates and user satisfaction are difficult to measure. The absence of planning data leaves the travel brand wondering how to improve performance or where to invest next without ever really knowing where to start.
  • Customization and high-value features
    Unlike white label travel app providers that offer very limited changes to the basic app design (e.g. colors, logos or text), premium versions offer a configurable platform that enables the travel agency to fully modify colors, fonts, icons, images, user flows and messaging. If you are paying for your own app, you’ll also have the ability to turn on/off features that you want end-users to use, whereas free apps typically offer little or none of this flexibility.

    Often travel agencies can add bespoke features and have their very own-branded platform in iTunes and Google Play. This depth of reconfigurability means that the traveler is always aware of who is providing their service and keeps the travel agency brand front of mind throughout the traveler’s entire journey. Often when picking a developer for their customer portal, travel brands are lured by the draw of low-value features on free platforms like currency converter and weather predictor. Travelers often have many more pressing and fundamental needs, such as personal digital travel assistance, smart itinerary management, and push-notification reminders.

    Our own detailed research shows that certain features are valued more highly than others. It's the capabilities that best provide trusted and reliable trip information that are used far and above other lower value features. With your own app, the traveller sees this is important information is being provided by your brand; that positive reinforcement will keep them coming back to use your app, rather than the other abundant options they have access to.
  • Customer engagement across many touchpoints
    As soon as booking confirmation emails have been issued, agencies often lose the connection with the traveler. However, with a premium customer portal, there are many opportunities to engage travelers, and an exemplary User Experience (UX) reminds them who is supplying the unique experience. Every interaction from that point on - from push notification reminders and real time alerts - is about bringing the brand to the fore. You will have full control of the messaging platform to craft messages in your tone of voice and each push notification message will come with your app logo on top. Establishing and re-establishing these connections is a new take on the ‘effective frequency’ strategy that cites repetition as a precursor to success. The mobile channel can go a long way to supporting this and if it’s delivered with your brand front and center the agency’s value proposition is enhanced.
  • Marketing and consultancy advice
    By going the down the free or white label route you’ll be expected to own the mobile channel for your travel brand. That can be difficult without a marketing team that has experience launching and driving engagement in the app marketplace. Because you have invested in a mobile platform, premium app partners are typically motivated to ensure you are successful through subscription models that are based on usage. They have deep-seated interest in ensuring you launch successfully, continue to engage end-travellers and can offer the guidance and support to make sure this happens.

Leader or laggard?
Leaders in the travel agency space must innovate in order to be profitable and deliver great customer experience. Innovation is key to gaining competitive advantage. Attitudes such as ‘Free is good enough for now’ position companies behind the digital leaders in their industry. The odds of winning new business through technology differentiation and retaining business through brand awareness and customer engagement vastly improve when an agency has its own platform.

Depending on the scale of the agency business, having a branded mobile platform can cost several thousand dollars in initial costs which is often the focus in weighing up a decision to invest in your own travel app. However, when you take into account the opportunity to win more business with corporates and the ability to reduce the servicing cost of the end-traveler, having your own premium app can have a significantly lower Total Cost of Ownership (TCO) than going with a free option.

While free might seem sufficient - or even a stop gap for the time being - ultimately it isn’t the right choice for a travel brand committed to mobile and digital leadership. Mobile is hard, and a free solution won’t propel a travel brand forward with the same impulsion and sophistication as a premium version.

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Eric Booth - Product Marketing Manager

Eric has 13+ years experience as a digital & product marketing specialist within the online services, entertainment & travel sectors. With experience working in both B2B and B2C environments Eric’s key focus at Travelport Digital is to bring new products to market, articulate product value propositions and drive product demand by connecting customer the needs to product capabilities.

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