Frequent business travelers occupy nearly fifty percent of all U.S. hotel rooms on any given night. I once pulled my weight in that crazy laptop-toting, jet-set world of management consultants by staying over four hundred nights in hotels.
My first day on the job included a slide deck outlining the top hotel and airline rewards programs and credit cards (and an urging for one hotel rewards program in particular that will remain unnamed). After that, sleep, weekends, and social life were scarce. Why did I do it? Pay was good, yeah. Work was interesting, mostly. But the real boon was the promise of turning those hundreds of thousands of accumulated loyalty points into a beach week for mom or a sweet city break with friends.
And I’m not alone. Why do you think everyone from Starbucks and Red Robin to your regional grocery store has implemented rewards programs? People love points. Which is why I’m a little confused by recent claims that points don’t matter or have little value. To make sure I’m not an outlier, I turned to data.
Loyalty programs continually evolve… for the better.
Here’s a staggering statistic: the average American household belongs to 29 loyalty programs. And according to Hospitality Technology Magazine’s 2014 Global Traveler Study, eighty percent of global consumers participate in a hotel loyalty program. One might think this ubiquity waters down the importance and effectiveness of rewards programs—everyone is doing it, so it’s lost its allure. But that’s not true for all hotel loyalty programs. The programs that have the most value do the following:
Differentiate. Hotels see long-term benefits and profitability from adding value to the overall guest experience and deepening their understanding of their guests.
Personalize. Hotels offer personalized and customized experiences (e.g., welcome notes in foreign guests’ native language) for loyalty program members to build long-term relationship-focused loyalty. This approach makes members feel more identified, recognized, and awaited-for.
Keep it simple. Hotel loyalty programs that make it extremely easy to sign up, acquire points, and redeem points are the most loved. Blackout dates and points expiring are major no-nos.
Points are still the most important aspect of loyalty programs.
According to Hospitality Technology Magazine’s 2014 Global Traveler Study, over eighty percent of global consumers identified the following as top aspects of a loyalty program:
- Points with high redemption value
- Diverse options for accruing points
- Points that retain their value for a long time
- Easy redemption with few restrictions
Notice a trend? Each aspect centers on points.
On the other hand, fifty-five percent indicated “special treatment based on loyalty influences their purchase.”
Offering points not only provides what consumers value most, but also opens the door to building a deeper relationship with guests and providing that special, personalized treatment.
But points don’t matter to affluent travelers, right?
Surely they don’t care about value for money. The famously frugal Warren Buffett, and today’s affluent travelers, would disagree. According to Google’s Affluent Insights, ninety-six percent of affluent travelers belong to a loyalty program. And eighty-one percent of them sign up so they can earn free flights, hotel rooms, rental cars, etc. in the future.
Are you ready to step up your game to attract and reward frequent, affluent travelers? Let’s talk.