Study: To Secure Loyalty, Give Members More Choices

SAN FRANCISCO—With the U.S. travel industry fearing a sales slump, amid potential for travel restrictions, airport detentions and stringent vetting of travel visas, the onus is on brands to step up their game.

“During quieter times, these revenue streams can act as a cushion for a hotel,” said Guy Deslandes, e-commerce sales director, Collinson Group.

Well, not anymore. Those days are now over as savvy travelers demand more personalization, and world and economic events have a significant impact on the experience of travel.

For the second year, the company’s “Value of Redemption” survey seeks to better understand loyalty program member behavior and preferences globally. It’s a member-focused survey, which specifically examines the redemption of loyalty currency. The research was conducted from December 2016 to January 2017 and included a sample size of 1,000 loyalty program members in the U.S.

Among the findings, the standout takeaway was that members are demanding more options. Specifically, they want a wider choice of rewards and methods to redeem their points—whether it’s in-store or online on a mobile device or laptop. Giving members what they want in terms of choice can help to strengthen a customer’s devotion to a brand, and, in turn, increase engagement.

“Importantly, it confirmed the value that providing more choice of rewards can bring to hotel loyalty programs through creating greater member engagement. For example, the research showed that members are looking for broader redemption offerings beyond traditional hotel room booking rewards. In fact, a staggering 69% of hotel loyalty program members in the U.S. said that they look for a program with more choice of rewards, including non-core inventory rewards such as electrical goods or day experiences,” said Deslandes. “Moreover, it showed that loyalty programs that offer these non-core inventory rewards actually drive a positive commercial impact. Over half (53%) of global hotel members who said they redeemed on non-core rewards then went on to book a core inventory product such as a hotel room, suggesting that ‘burning, does drive earning’ for hospitality brands.”

Rewards can also bring lost members back into the fold. The report revealed that for customers in the U.S. who hadn’t engaged with their program in over three months, nearly half of these members reported redemption had driven a re-engagement with their program.

“What was interesting was that 57% of these re-engaged members had made the redemption on non-core inventory in comparison to 42% who had redeemed on core-inventory rewards,” he said. “Finally, the research revealed that hotel loyalty members are demanding more choice on where they redeem their points. Fifty-seven percent of U.S. hotel loyalty program members admitted that they want to redeem their points in retail outlets with 37% agreeing that the value of their loyalty program actually decreases if they cannot redeem in-store.”

Hoteliers will always prioritize enhancing the on-property guest experience, noted Deslandes. However a loyalty program can help to bridge the gap in between stays and help create more everyday member engagement. He offers these tips for hoteliers:

Provide more choice: Explore ways to offer a wider choice of reward inventory alongside the traditional room and stay-related items. As indicated above, the survey results show clearly that there are benefits to offering non-traditional rewards, including increased engagement, driving value and engaging lapsed members.

Extend the engagement opportunity: Many hotel loyalty program members stated an interest in being able to redeem their points in retail outlets. This will make a significant impact on increasing members’ everyday engagement with a loyalty program, long after they’ve checked out of their room.

“The ability to redeem rewards in a way that suits the member’s individual lifestyles and personal needs has become increasingly important, particularly when a hotel brand may not have a property in the member’s desired location, or where availability may be limited,” he said. “The opportunity is there for loyalty programs to greatly increase their integration into the lives of their members whether that is online or offline (in-store). Creating more personalized one-to-one experiences with members by allowing them to engage—how and when they want—could see a dramatic shift away from the apathy toward some loyalty programs and greatly help to drive more value and more engagement. With 75% of global hotel loyalty program members favoring brands that are early adopters of new technology, maybe it’s time for hospitality brands to look to become the industry innovators and match these more everyday member requirements.”