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Loyal to Loyalty: Reward Programs Prosper Despite Mild Consumer Frustration – Why ThinkInk’s Loyalty Clients Have Nothing to Fear

Jan 16, 2013

 

loyalty_butlerFor clarification, “Loyal to Loyalty” is not some ‘80s hair band. But it is the state of current traveler loyalty programs whether we’re talking about hotels or airlines – despite some curmudgeonly detractors. Even so, ThinkInk’s loyalty/rewards program clients have nothing to fear.

That was the conclusion reached in a recent Smarter Travel article that examined whether or not travel loyalty frustration was truly undermining actual loyalty success and membership signup. Data usually helps make strong arguments and this was exactly the case here.

Frequent Business Traveler also reported that:

–          99% of business travelers are members of an airline loyalty program.

–          75% of those surveyed are members of two to five programs

–          72% of respondents said they have strong brand preference for particular hotels.

While not specific to loyalty programs in the hotel example and admittedly taking a snapshot of a narrow subset, the survey suggests that whatever their shortcomings, consumers remain loyal to loyalty programs.

But the reasoning behind this apparent loyalty is where the Smarter Travel article fell short. Forgive me for sounding too much like one of our clients, but part of the answer lies in customer engagement. Whether it’s in the airline, hospitality, retail or entertainment industry, new technology – e.g., augmented reality, NFC, QR codes— and new channels including smartphones, tablets, digital signage and kiosks  are delivering genuine experiences that move beyond traditional points-for-cash or points-for-rewards loyalty models.

Armed with these technologies, the above industries are learning more and more about their customers, the types of transactions they make, how often they use their services and what they’re saying about the brand on social media.

Considering the wealth of loyalty programs that are out there and the industry-wide recognition that a  repeat customer is many times more valuable and less costly to maintain than a new one, you can be sure marketers are well aware of their loyalty programs’ shortcomings and are working to correct them.

There’s also been a recent move to better converge the management styles of customer relationship management (CRM) and the roughly decade-old term, customer experience management (CEM) to help improve and streamline corporate customer response and data tracking processes. But more on that in another post.

For now, the bottom line is this: Smarter Travel is right when it argues that customer loyalty programs aren’t going anywhere – except onward and upward.

As always, the devil is in the details.

Gathering customer metrics and turning that data into actionable results that improve a loyalty programs’ efficiency while promoting genuine customer experiences are what in-house and third-party loyalty program designers live for.

Are loyalty programs perfect? Far from it.

But the current health of travel loyalty programs is much better than a few detractors would have you believe. I’m on the road for the next week, earning miles and points wherever I go, so earn and burn those points, baby, and remain loyal to loyalty!

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