The Ugly Truth About Travel Loyalty Schemes
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The Ugly Truth About Travel Loyalty Schemes

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Loyalty schemes are a powerful tool for driving advocacy, but done badly and they mean your customers will amplify the wrong message about your business.

Loyalty schemes are a powerful tool for driving advocacy, but done badly and they mean your customers will amplify the wrong message about your business.

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  • Loyalty Schemes Exposed: The Ugly Truth
  • Travel loyalty programs are a bubble. And it may be about to pop…
  • If you want loyal customers: Listen to their desires “Find what is most meaningful to guests, such as free Wi-Fi, parking, breakfast or lower rates.” Offer mini-rewards as incentives“62% of consumers said being able to use their points to purchase goods such as electrical items or travel accessories would act as an incentives” Make the rewards more accessible“70% of scheme members said that making rewards more accessible would encourage them to collect.”
  • If you want loyal customers: Listen to their desires “Find what is most meaningful to guests, such as free Wi-Fi, parking, breakfast or lower rates.” Offer mini-rewards as incentives“62% of consumers said being able to use their points to purchase goods such as electrical items or travel accessories would act as an incentives” Make the rewards more accessible“70% of scheme members said that making rewards more accessible would encourage them to collect.”
  • Give members the ability to top up rewards with cash “The ability to top up rewards with cash to buy goods was popular with 63% of those who collected points” Make top-tier members feel extra special“Your loyalty program reward tiers must make sense to your guests and create appropriate distinctions for the top tier members” Be transparent“Transparency and what points are really worth is going to be an increasing challenge. Consumers will want to know if earning two points on one scheme is better than earning one point on another” Establish a two-way value proposition “As you design your program, determine which rewards have the highest value for your customers but also have the lowest internal cost for your company.”

The Ugly Truth About Travel Loyalty Schemes The Ugly Truth About Travel Loyalty Schemes Presentation Transcript

  • Travel loyalty programs area bubble. And it may beabout to pop…
  • “A new study of over 4,000 business and leisuretravellers showed hotel loyalty programmes have little orno impact on their purchase decisions and could even bedriving consumers to switch brands.”
  • “Four-out-of-ten UK residents who collect air miles orpoints have never tried to redeem them while six-out-of-ten complain it takes too long to collect sufficient points togain anything of value.”
  • “On average, nearly half of hotel guests annual spend isnot with their preferred brand and almost a third were"atrisk" of switching their preferred brand.”
  • The Sales PitchAvios/BA Amex“Our fee–free Card lets you collect Avios on youreveryday spend and unlock a world of excitingopportunities, from reward flights and upgrades to hotelstays and car rental”
  • The RealityYou need to spend £15,000 on a BA Amex card just toearn enough miles to take a BA return flight to Rome -and even then, you‟d still be left paying for thetaxes, which can be up to half the regular fare.
  • The Sales PitchHilton Honours“We will be expanding to ten hotel reward categories to accountfor all of the new hotels and resorts that have opened in the pastfew years. With 3,900 hotels and resorts in 90 countries you aresure to find the perfect place for your next reward stay.”
  • The RealityProbably the worst single hotel loyalty program devaluationwe‟ve ever seen. The award price of some hotels andresorts has risen by as much as 90 percent. As of March28th 2013, your hard-earned points are worth next tonothing.
  • The Sales PitchEmiratesSkywards“Frequent flyer benefits get even better as you move uptiers, so you can look forward to advantages such as loungeaccess and dedicated check-in.”
  • The RealityWhen a customer earns 25,000 tier miles in one year theyare able to go from Blue to Silver – this requires between 15and 30 flights from Istanbul to Dubai to be taken in oneyear, not an easy feat. If you are travelling to Dubai andpack light & print the boarding pass, there is not a singlebenefit for being a Silver Skywards member (minus thecouple hundred extra miles that is earned).
  • The Sales PitchIHG Priority Club Rewards“Get the special recognition and benefits you so richlydeserve. As a Platinum Elite member, you‟ll enjoy exclusivebenefits available only to our most valued guests.”
  • The RealityThe most you seem to get is a drinks voucher at check inwith some properties and if you‟re lucky an upgrade to abetter room or corner view if available. Here in the UK its asif youve never been in their hotel before, rather thanupgrade you‟re given a token piece of fruit or worse thanthat a 20% off voucher.
  • The Sales PitchDelta SkyMiles“Did you know we‟re the only major U.S. airline withoutmileage expiration? That means you have the freedom to flywith us and redeem your miles on your timeframe.”
  • The RealityIt turns out your „expiration free‟ miles expire when you do.As of the 20th March 2013, your miles can no longer beinherited by your next of kin when you die. Charming.
  • Listen to their desires“Find what is most meaningful to guests, such as free Wi-Fi, parking, breakfast or lowerrates.”Offer mini-rewards as incentives“62% of consumers said being able to use their points to purchase goods such aselectrical items or travel accessories would act as an incentives”Make the rewards more accessible“70% of scheme members said that making rewards more accessible would encouragethem to collect.”
  • Give members the ability to top up rewards with cash“The ability to top up rewards with cash to buy goods was popular with 63% of thosewho collected points”Make top-tier members feel extra special“Your loyalty program reward tiers must make sense to your guests and createappropriate distinctions for the top tier members”Be transparent“Transparency and what points are really worth is going to be an increasing challenge.Consumers will want to know if earning two points on one scheme is better than earningone point on another”Establish a two-way value proposition“As you design your program, determine which rewards have the highest value for yourcustomers but also have the lowest internal cost for your company.”
  • http://forteconsultancy.wordpress.com/2011/02/28/loyalty-programs-gone-wrong-%E2%80%93-ten-common-mistakes-to-avoid/http://www.emirates.com/english/Skywards/about/skywards.aspx?showinterim=truehttp://milepoint.com/forums/threads/airline-loyalty-schemes-failing-to-take-flight-new-study-shows.62783/http://boardingarea.com/blogs/onemileatatime/2013/02/21/what-the-past-few-weeks-have-taught-us-about-hotel-loyalty-programs/http://www.travelmole.com/news_feature.php?news_id=2004769http://www.guardian.co.uk/money/2009/sep/13/loyalty-schemes-value-for-moneyhttp://articles.latimes.com/2013/jan/28/business/la-fi-travel-briefcase-20130128http://www.delta.com/content/www/en_US/skymiles.htmlhttp://www.travelandleisure.com/travel-blog/carry-on/2013/4/12/trip-doctor-deltas-expiration-free-skymiles-now-expire-with-youhttp://www.deloitte.com/view/en_US/us/Industries/travel-hospitality-leisure/72ce4f52478ab310VgnVCM1000003256f70aRCRD.htmhttp://www.europeanbusinessreview.com/?p=2845http://www.ihg.com/priorityclub/hotels/us/en/global/offers/platinumhttp://www.businesstraveller.com/discussion/topic/Priority-club-platinum,-worthlessSources
  • If you are keen to move beyond loyaltyschemes fuelled on commoditised interactions andyou know that your audience deserves relationshipsdriven by value, and built from meaning, talk to us…Pomegranate, where the journey is as exciting as thedestination.