By Ritesh GuptaHotels and airlines have been re-working on their loyalty programmes and related marketing campaigns focused on driving membership and raising awareness of the benefits and enhancements of their revamped initiatives.

Published: 15 Feb 2011

By Ritesh Gupta

Hotels and airlines have been re-working on their loyalty programmes and related marketing campaigns focused on driving membership and raising awareness of the benefits and enhancements of their revamped initiatives.

Engaging frequent customers and acknowledging their preferences via a loyalty programme provides travel companies the necessary information to enhance their experience and thereby drive greater loyalty.

“The key advantage of any travel and leisure loyalty programme is the lure of free or discounted travel; it always has been and always will be,” says Iain Pringle, Head of Customer Insight & Loyalty, The Mileage Company.

The key challenge, especially in today’s market, is to acquire collectors/members that are prepared to take the time to collect rewards for a longer period to get a more valuable overall reward.

Pringle said, “What works best to achieve this is focus on four key messages – sell the dream, illustrate the proposition, show members how it is attainable and give them an easy first step. Keeping to these simple rules ensures that the customers you acquire are more likely stay with you and build their advocacy as they approach their goal.”

New ways

Interestingly, the travel sector has witnessed several new, exciting ways to engage customers.

For instance, InterContinental Hotels Group has highlighted that there is a global trend toward businesses integrating games into marketing and advertising initiatives.

IHG recently stated its Priority Club Rewards has become the first hotel rewards programme to launch an online gaming platform where members can win loyalty points by competing against one another. Members are being given an option to gain loyalty points for simply answering travel trivia questions in a new online game, Win It in a Minute. Priority Club Rewards sees the strategic potential in adopting and advancing this trend in a meaningful way.

Other than gaming, travel companies are increasingly rewarding customers for their affiliation towards social networks and location-based services (LBS).

JetBlue Airways has unveiled a new application on Facebook that offers incremental airline reward points to customers for check-ins exclusively through Facebook Places. Called Go Places on Facebook, the airline says this app is the first location-based social media application to come up with such offer. This application rewards customers with TrueBlue points and special discounts so they can earn free trips faster. Customers will be able to rack up points and deals up to March 1, 2011. This is the first of many customer-driven promotions that JetBlue has planned for 2011 on Facebook Places.

Go Places will allow JetBlue customers to earn real rewards because it is directly tied to the TrueBlue loyalty programme. Additionally, users can also check-in with their mobile phone using the Facebook mobile application and Go Places will automatically deliver virtual badges and credit their TrueBlue points. There is no need to download a separate mobile application.

The aviation industry is offering frequent flyer points for location-based virtual ‘check-ins’. Some of the travel companies have already acknowledged that their consumers tend to be tech-forward and more plugged in to social networks and location-based services. Specialists in this arena believe that a virtual check-in is an expression of loyalty and there is some value in that. At the same time, in order for the industry to move en masse toward offering LBS rewards, clear and measurable RoI is a must.

“Presence within a customer’s own social media space is a great opportunity for businesses to build loyalty with their most influential customers. The measure of getting this right is primarily finding the optimum mix of location, channel and timing. When done well this can create the perfect mix of right product, at the right time, in the right place. The result is highly relevant communications at a low cost that will maximise customer satisfaction and grow loyalty,” says Pringle.

Approach

The whole approach towards such programmes is changing as the travel sector tries to understand the preferences.

The airlines intend to make its rewards programme open, honest and real.

Southwest Airlines has reworked on its frequent flyer programme, which will officially launch on March 1, 2011. The airline says its All-New Rapid Rewards programme will enable members to redeem their points for every seat, every day, on every flight with absolutely no blackout dates or seat restrictions, and points won't expire with any earning activity in a 24-month time period. The amount of points earned is based on the fare and fare product purchased, and the same is true for redeeming points.

“Airlines and loyalty programmes must understand what customers want and constantly seek to adjust the proposition to meet customer demands and expectations. A good example of this from the British Airways frequent flyer programme perspective is the part miles part cash proposition for reward flights where new combinations and variations are continuously tested to ensure the strongest value offer,” Pringle said.

An OTA of Expedia’ stature, too, recently, came up with a new initiative.

Expedia has announced that all members of its Expedia Elite Plus Program will earn free room upgrades and VIP perks at VIP Access hotels in select markets nationwide.

Expedia customers automatically earn membership in Expedia Elite Plus when they book more than 15 room nights, or spend more than $10,000 on hotels and airfare, in a calendar year.

“Expedia is always trying to create a great travel experience for our customers. One limitation we have is that we do not provide the actual service – we count on our supplier partners to treat our customers well when they are on site or in transit. We select VIP hotels from the hotels we know will consistently give every Expedia customer a great experience. They agree to give even better treatment to Expedia’s top customers. We think it’s win-win-win for everyone,” said Edward Nevraumont, senior director customer loyalty, Expedia.com.

On how Expedia, as an online travel company, is setting a new benchmark as far as rewarding its customers in concerned, Nevraumont said, “As far as I know, no other OTA has a points-based loyalty programme (that doesn’t involve a credit card) or offers hotel upgrades for their top customers.”

The industry has been trying to redesign their loyalty programmes to make travel as rewarding and hassle-free as possible.

“I think hassle-free it great. Expedia Rewards will let customers earn points on all of their travel spend – no need to split it between multiple airlines, hotels and destination services. Then they will be able to use those points on just about any product we sell – with no blackout dates or limited inventory,” said Nevraumont.

Opportunity

Brands simply need to work harder to offer compelling programmes to keep existing members and attract new ones. Specialists recommend that speaking to customers in the way they want to be communicated with is going to be the key.

Persistence of your brand in a customer’s daily life is growing at a fast rate as companies work out how to create commercial opportunity from the growing social platforms.

“We believe that this will be a continuing trend as it is cost effective, relevant and customers are choosing this as their channel of choice,” said Pringle.

Also, there are lots of mobile applications that are all about digital loyalty.

Commenting on such applications from an OTA perspective, Nevraumont said, “I love the idea of giving customers more ways to earn points. One of the top priorities of my team is to find new ways where customers can earn points. You will see new opportunities roll out over the course of the year as the programme gains traction.”