By Sara O’Brien
Traditional points-based loyalty programs have been around since 1983, emerging as a unique way for major brands to build stronger relationships with their most valued customers. At the time consumers found them appealing and interesting, allowing hotel brands to generate buzz and additional revenue.
But much has changed in the last 40 years. Technology and A.I. (Artificial Intelligence) have evolved to be able to deliver things people want when they want them. Netflix recommends which movie you’d like to watch next and Amazon can tell you what you should buy for your child’s birthday this year. Yet, so many hospitality loyalty programs offer a generic, transactional “loyalty” experience that is no longer relevant for today’s consumer.
More and more, consumers are telling us that what has worked in the 80s just won’t work for them today. The average U.S. household belongs to 21 different loyalty programs, 78 percent of Americans abandon them, and 44 percent complain about the lack of reward relevance, flexibility, and value. In short, loyalty programs are failing to effectively reward today’s consumers.
Imagine a loyalty program in which a guest receives immediate benefits rather than waiting weeks, months, years, and sometimes never accumulating enough points for a reward or reaching the next tier. Instead, imagine a program that gives the guest an instant, desired and personalized reward. That is loyalty done right! These types of rewards make the customer feel valued, appreciated, and recognized.
Below are 3 ways to award loyalty the right way for today’s consumers.
1. Get personal
It may be a simple concept, but we feel it bears repeating: What works for one customer will not work for all. Only 22 percent of guests believe today’s hotel offers are relevant, even though the majority (54 percent) of hotels believe they are. The disconnect is real, but there is a way to close the gap.
Hotel brands can continue pushing rewards that they believe will appeal to their customers, or they can actually learn what each individual wants through A.I. The way brands like Amazon, Netflix, and Spotify offer personalized experiences and recommendations has forever changed how consumers expect to be treated by brands, and it’s time for the hospitality industry to catch up.
A.I. allows brands to elevate relationships with their customers by personalizing the rewards based on their preferences and transactions, by learning and predicting what they want in real time. Let’s say a guest chooses a flight credit from Delta Airlines and a VIP shopping pass at Bloomingdales as their rewards, a next-generation loyalty program will remember that selection and offer similar rewards in the future, improving their experience and satisfaction with the brand.
2. Give choices and immediate benefits
New data confirms that consumers are dissatisfied with waiting to accumulate points and unattainable tiers. Seventy-eight percent of guests prefer immediate benefits and 61 percent want to choose their own rewards.
Loyalty programs in which you earn points to redeem something in the unforeseeable future will not move the needle for your brand. Consumers will either be frustrated that they need to wait or they will forget about and even abandon the program altogether.
Next-generation loyalty feels more like a relationship and less like a sales tactic by making guests feel valued immediately and frequently with personalized and instant rewards.
3. Offer experiences
With over 65 percent of U.S. travelers looking to experience something new while traveling, travel brands have an opportunity to enrich their guests’ travel journeys beyond the hotel property by offering unique and relevant rewards they can use before, during, and after their stay.
One way to elevate loyalty with experiences is to incorporate 3rd-party products and services. A concept that is coined as the “Amazonification” of travel, hotel brands can extend their offers beyond generic on-property perks, giving the guest control to select the incentives that will enhance their stay or provide additional opportunities to explore.
For example, with geo-targeting, we would know that a guest located in New York is looking to travel to Miami. In that case, her reward offering may include a complimentary 1-hour paddleboarding session in Miami as well as New York Yankees tickets to enjoy after her trip when she’s back in New York.
Wrapping it up
The brands that are truly disrupting loyalty understand the need to shift from a transactional experience to a personal and dynamic relationship with the customer. It’s up to hospitality leaders to see the writing on the wall, take note from other brands paving the way, and listen to their customers who are more vocal than ever about what they truly want.