DATABERG
Customer loyalty cards are becoming very popular, particularly in the travel industry. Many companies are moving from a proprietary scheme to including more partnerships.
Now, coalition loyalty programs are becoming increasingly common. Due to fierce competition in the sector, these programs serve to initiate a dialogue with lucrative clients, creating an important product differentiator. Airlines and hotels are constantly improving the perks offered through customer loyalty cards to encourage consumers to continually return. Furthermore, the loyalty game in the hotel sector is becoming particularly competitive. Hotels are now offering increasingly attractive offers to encourage consumers to make their properties their brand of choice. In this article, we discuss how major brands are leveraging loyalty to drive customer retention.
How hotels are leveraging loyalty
Increasing numbers of hoteliers are creating innovative loyalty programs to entice customers. The perks and special offers are more and more creative, with chains like Hilton partnering with Amazon to offer guests exclusive discounts. Further to their inspired collaboration with Amazon, the Hilton’s Honors program now offers frequent guests ‘Milestone Bonuses’. Basically, this scheme rewards customers who exceed a certain number of stays per calendar year. For example, if a member stays 40 nights of the year, they will receive 10,000 bonus points for every additional 10th night. What’s more, there’s no limit to the number of bonus point you can earn. This scheme is particularly appealing to high-yield corporate clients who’ll look to book in bulk.
Airlines that are transforming the loyalty game
Airlines have understood the value of customer loyalty cards for decades. However, as the market becomes increasingly turbulent, airlines realize they have to do more to stand out. For example, Southwest Airlines have improved their Rapid Rewards scheme to place even greater emphasis on customer service. This loyalty program distributes rewards based on profitability and value, so A-list members can enjoy the highest quality of service. However, Southwest’s Rapid Rewards do not only focus on high-spend clients: the program offers different types of reward depending on the customer's points. Therefore, even though a customer might not have accrued enough points to buy a flight, they can still enjoy special offers on other products.
Why personalization is transforming customer loyalty cards
However, programs should not only drive loyalty through discounts; a recent study on customer engagement reported that 80% of consumers are more likely to spend with a brand that personalizes their communications. Customers feel valued when a company interacts with them directly, catering to their preferences, habits, and aspirations. This approach means that customers feel a meaningful connection with the brand, which is the key to loyalty. For instance, research conducted by American market research agency J.D. Power discovered that customer satisfaction was 31 time higher when points could be redeemed with retail partners.
As such, it is crucial that the travel industry works towards building loyalty schemes that are flexible and personalized. Through partnerships and collaboration, airlines and hotels can reward customers in a way that suits them. With a personalized loyalty program, travel companies can ensure their scheme caters to every customer segment, from business clients to vacationers. This makes customers feel valued, satisfied, and more inclined to return.
