With the proliferation of new and disruptive travel and hospitality options (Airbnb, Uber, Lyft, etc.) and the common traveler focused on price to make stay decisions, travel brands are experiencing losses in market share and loyalty from their customers. Customers want more, such as diverse ways to redeem points, deeper engagement, quicker gratification, flexibility, relevance and easier processes. The traveler is empowered and in control. They want to earn points and “reap the benefits” of their travel stays. However, many legacy loyalty programs require members to consolidate all travel activities within their program to experience impactful rewards.
Travelers, our customers, want more flexibility and fluidity with loyalty programs – more places to earn points and more opportunities to redeem them instead of saving them for one big purchase. When redemption options are limited, brand loyalty is at risk. Today, we’re seeing a growing trend in the “retailization of loyalty,” where brands can reward travelers with “point moments” during their stay.
For example, upon check-in, many hotel brands will offer members a welcome VIP gift or points. Points can also be awarded in place of breakfast vouchers. It’s about understanding what’s important to each and every member and creating point moments that are meaningful to them. These travel loyalty members want points and rewards available to use as their “retail purchase preference”. And, they view points as a currency. The ‘value’ extends beyond the brand itself. So what does this mean for marketers?
Clearly competing hotel brands do not have plans to merge loyalty programs to offer the travel loyalty member a choice as to where they’d like to book their stay or cash in points. In other countries, coalition loyalty programs are formed when two or more brands partner together offering multiple loyalty program benefits and redemption options for members. If only we had coalition loyalty programs in the United States, life would be “loyalty perfect”.
Let’s focus on what we can do to create this retailization of loyalty desire and learn from existing programs who are leading the charge. American Express, for example, is one brand that’s done a great job with the retailization of loyalty. The brand’s “rewards built for you” focus allows members to redeem points for a variety of options, like booking a vacation, making a donation to your preferred charity, taking a taxi in NYC and dining at restaurants all through the American Express Travel center.
No matter how small or big your loyalty program is, remember one thing: Focus on the customers’ interests and preferred ways of interacting. As part of their experience, include multiple point redemption offers so your members’ retailization needs are fulfilled. If you’re a hotel brand, form partnerships with excursion vendors (like zip lining and scuba diving) so members can redeem points for these activities. Or, create a parents’ night out option so they can use points to pay for evening childcare. And get to know all the interests of your customers so you can personalize offers and redemption opportunities for each member. For instance, allow health and fitness enthusiast members to redeem points for a beach yoga experience followed by breakfast overlooking the ocean.
Think of ways you can create personalized experiences for members to optimize engagement and get retail ready, and make sure your marketing infrastructure can support your goals. Take time to evaluate your marketing infrastructure, which includes the technology and tools you leverage to deploy programs, data, strategy and analytics that guide decisioning along with your people.
Retailization of loyalty is achievable. To embrace this disruptive trend, make sure you’re set up for success with your loyalty program infrastructure. And ‘future proof’ your infrastructural components, because the need for sophisticated platforms and integrated touch points (such as cell center and web) continues as customer increasingly expect real-time engagement and personalized, experiential rewards. Be consistent and always stay focused on what’s most important – the customer.
This post first appeared on Loyalty360.