Mr. Johnson

Sales & Marketing

Exploring Current Loyalty Programs From Industry Leaders

By Mark Johnson, President, Loyalty 360 - The Loyalty Marketer’s Association

While most hotels have loyalty programs, research is showing that many are not living up to their potential. Loyalty Lab reports that on average, only 20 to 40% of program members regularly accrue points toward award redemption. That means hotels are losing out on significant opportunities to encourage at least 60% of their customers to become repeat and loyal customers, and repeat customers can be the most profitable ones.

So what do customers look for today in a hotel loyalty program? Which rewards will be most popular in 2011? What should hotels do to make sure that their loyalty programs appeal to the widest segment of travelers?

According to a new survey from the Chief Marketing Officer (CMO) Council, customers are craving the notion that hotel operators understand them and their needs. More and more customers are expecting highly personalized content with offers that feel as if they were designed specifically for them. And this revelation means that the days of mass blasts with general offers are no longer acceptable.

Loylogic’s 2010 Frequent Traveler Survey echoes these findings. The survey of over nearly 40,000 people representing more than 140 loyalty programs worldwide was undertaken to better understand frequent travelers’ opinions towards their current loyalty programs and reward redemption. The research found that with almost 2 billion travel loyalty program memberships in the U.S. and more worldwide, the "one-size-fits- all" loyalty program will no longer suffice. Consumers have more options and more control than ever, and to keep customers (especially frequent travelers) engaged, excited and loyal, brands need to offer rewards they want. The next generation of reward programs should, according to the research, offer unique, desirable and, importantly, attainable reward options.

Programs should also offer more value and simpler reward redemption to remain attractive to today’s consumer. Ease of redemption is key; guests can become more excited and loyal to a hotel or chain after their first redemption, facilitating their transition from dipping their toe in the loyalty program waters to profitable, consistent members who keep coming back.

Taking a look at what some industry leaders are doing to engage their customers will also give great insights into how to drive ongoing participation in your loyalty programs.

InterContinental Hotels Group

With Forrester Research, Inc. reporting that 40 percent of U.S. frequent travelers play online games, InterContinental Hotel Group Priority Club Rewards’ new game, “Win It In a Minute,” appears destined for success. IHG is the first hotel rewards program to launch an online gaming platform where members can win loyalty points by competing against one another. In each round of "Win It in a Minute," players have a maximum of 12 seconds to answer each of their five daily questions.

There is a global trend toward businesses integrating games into marketing initiatives. And, according to IHG’s press release, Priority Club Rewards sees the strategic potential in adopting and advancing this trend in a meaningful way. "Our research has consistently confirmed that Priority Club members appreciate new and unique ways to engage with the program and earn more points," said Don Berg, vice president, Loyalty Programs, IHG. "'Win It in a Minute' gives them a great opportunity to do both and compete with other members in a fast-paced and fun, online game. We are confident that as we continue to build our gaming platform, it will make Priority Club Rewards more valuable and engaging for our members."

Once logged in, Priority Club members are asked five questions related to travel destinations and given 12 seconds to answer each one. The top 50 scores each weekday — determined by both the correctness and speed of the answers — win 5,000 Priority Club points. The top 100 scores each week, calculated from each player’s daily performance, earn 15,000 Priority reward points. According to Berg, in just the first two weeks of the “Win It in a Minute” promotion IHG saw 100,000 games played and handed out more than 100 million Priority Club points.

GHA Discovery program

For the first time in the hotel world, the newly created GHA (Global Hotel Alliance) Discovery loyalty program unites 12 luxury chains and their nearly 300 hotels --- Omni, Kempinski, Leela, Doyle Collection and eight other small and mid-sized regional luxury chains. Five years in the making, the GHA Discovery is not a points-based program, but rather an innovative one that rewards travelers with "Local Experiences" that have been designed by local experts offering members access to a large selection of adventures, exclusive experiences and off-the-beaten path activities that are not easily available or accessible to the general public. Members can earn a chance to play traditional "Boduberu" drums in the Maldives or take a sunset drive through a nature reserve in Namibia. They can go shopping with a personal shopper at the most exclusive multi-brand boutique in São Paulo, enjoy a night of fishing with local fisherman in Vilamoura, Portugal, have a private lesson with a certified Tai Chi Master in Suzhou, China, or get a behind-the-scenes tour at CNN in Atlanta.

Marriott Rewards Insiders

Guests showed Marriott Rewards plenty of loyalty this year. Frequent travelers gave the program top honors at the first annual Frequent Traveler Awards, sponsored by the Frequent Travel Educational Association. Marriott Rewards won 11 of the 15 hotel loyalty program awards, including Program Of The Year for the Americas, Europe and Africa. The program was also voted Best Hotel Loyalty Program at the 2011 Readers' Choice Awards on About.com. Perks such as free Internet access, guaranteed room types and room upgrades are available at the second level of membership, and even new members enjoy late check out times. Adding in redemption opportunities at Ritz-Carlton Hotels resonated with members.

Now it seems as though members of Marriott Rewards have something else to rave about. Still in Beta, Marriott Rewards Insiders is a members-only online community devoted to exploring the experience of travel. “Our members told us they wanted a place where they could talk to each other without interference from sponsors trying to sell them something," said Ed French, senior vice president, Marriott Rewards in a company press release. "We designed an innovative digital lobby to give them a place to share their stories and get authentic, honest information from other frequent travelers just like them." Insiders are invited to share what they've seen, felt and learned on the road and during their stays at destinations around the world. They can also sign up for alerts, which are sent when a post is created in a forum the member wants to follow.

MGM M Life

MGM Resorts International recently launched its M Life rewards program. Benefiting from a vast array of amenities, members will enjoy one-of-a-kind experiences exclusive to MGM Resorts, insider privileges, personalized rewards and an aspirational tiered approach with escalating earning potential. M Life is launching as a casino rewards club; later this year it will expand to recognize guest spend on hotel stays, shopping, dining and more.

The M Life card has four different tier levels with benefits such as hotel offers, pre-sale ticket access, priority reservations at restaurants and room upgrades. The program also features a service that MGM Resorts is calling Express Comps, which it says enables guests to comp themselves with their points at restaurants and entertainment venues. The rewards are also more personalized, the company said. For example, if a guest attends a Madonna concert, he or she might receive an offer for an upcoming Lady Gaga show. A concertgoer attending a Trace Atkins show could receive an offer for the Country Music Awards.

Members are also be to accrue M Life Moments, including a menu of memorable experiences such as selecting The Fountains of Bellagio songs for a day, enjoying a cameo role in a Cirque du Soleil show, becoming a dolphin trainer for a day at The Mirage, cooking lessons with celebrity chef Rick Moonen at Mandalay Bay, and more.

As Jim Murren, Chairman and CEO of MGM Resorts, tells VegasNews.com, “M Life represents a major shift for MGM Resorts in the way we are engaging our guests. We’ve listened to our customers and designed M Life to deliver on their preferences, leveraging a caliber of assets no other resort group can offer. In terms of business impact, M life will enable us to retain a larger share of existing customer spend, activate new customers, increase customer frequency and provide better return on investment for promotional expenditure.”

Starwood Hotels & Resorts

Starwood Hotels & Resorts recently launched its first mobile application: a tool for travelers to manage rewards through the company's Starwood Preferred Guest program. The application allows travelers to book stays at 1,000 Starwood properties worldwide, manage reservations and check on recent activities in their Starwood Preferred Guest account. Members can also map directions to a traveler's hotel from their current location. "Mobile access is increasingly important for the fast-paced lifestyles of our members, and we are committed to providing solutions that enhance their experience while on the go," Starwood vice president of global web services David Godsman said in a statement.

As these best practice examples show, today’s industry leaders are finding innovative ways to personalize their loyalty programs offerings in order to engage their guests and earn their loyalty. Whether it’s incorporating mobile, experiential rewards, private online communities, etc., hotels that strive to understand the needs and wants of their loyalty program members and move from “one size fits all” to personalized offers are leading the way in delivering loyalty programs that truly engage their guests.

Mark Johnson is President and CEO of Loyalty 360 - The Loyalty Marketer’s Association. Loyalty 360 is the only organization that addresses the full spectrum of both customer and employee loyalty issues. An unbiased, market driven clearinghouse and think-tank for loyalty and engagement opportunities, insights, and responses, Loyalty 360 is the source business leaders trust for industry metrics, market driven research, case studies, and networking opportunities. A sought-after speaker and writer, Mr. Johnson is frequently called upon by media worldwide to share his expert insights into customer and employee loyalty issues. Mr. Johnson can be contacted at 513-290-5147 or markjohnson@loyalty360.org Extended Bio...

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