According to a study released by The Chief Marketing Officer Council, “The Leaders in Loyalty: Feeling the Love from the Loyalty Club“, 54 percent of the consumers surveyed let it be known that thanks to the barrage of irrelevant messages, low value rewards, and impersonal engagements, they aren’t feeling the love. In fact, they are thinking of asking for a divorce.
The study suggests “The reality of today’s loyalty landscape is that too many rewards, points or perk programs out there are still only as sophisticated as those early trading stamp programs. They dish discounts and free stuff to repeat buyers and gather about as much insight from the customer as those first shopkeepers exchanging place settings for swollen stamp books.”
Here are some key takeaways that customers didn’t like about loyalty programs.
- Too much spam and junk email topped the list of negatives at 44 percent
- Too many conditions and restrictions at 38 percent
- Rewards that lacked real value at 37 percent
Other prevalent complaints included members having a hard time redeeming points or rewards, program membership lacking value, and communications and services not being personalized or target specifically for members.
So how does your hotel loyalty program stack up against some of the other major hotel brands?
Starwood Preferred Guest - The chain now offers the chance to earn lifetime elite status. Also, road warriors who log more than 75 nights a year can use their own 24-hour check-in/check-out window.
Hyatt Gold Passport - Hyatt is rolling out new benefits that allow members to earn or spend points even when they’re not staying overnight. Just stopping in for a massage at the spa or a dinner in the restaurant at certain properties can help boost your points balance.
Hilton HHonors - Members can now spend points at an online marketplace that sells everything from sporting and kitchen equipment to restaurant vouchers and admission to shows.
GHA Discovery - The two-year-old program, whose members include Kempinski and Omni Hotels, rewards loyal guests not with free room nights but with a range of cultural encounters
Marriott Rewards - Buy airline tickets, pay for car rentals, or purchase travel insurance with a combination of Marriott points and cash. A new auction program lets members bid for special experiences.
Now let’s change direction and say you’re dissatisfied with the perks of your current loyalty program and you decide to jump ship.
What’s the affect on the brand for your defection?
In a new study released by cg42, “Hotel Group and Loyalty Program Brand Vulnerability Study“, the study measures the frustrations of existing US frequent travelers who are also primary users of these hotel loyalty programs and their properties, and quantifies their potential impact in financial terms.
The major hotels that were included in the study are Carlson (Club Carlson), Best Western (Best Western Rewards), Wyndham (Wyndham Rewards), Marriott (Marriott Rewards), Hyatt (Hyatt Gold Passport), Choice (Choice Privileges), Hilton (Hilton HHonors), Starwood (SPG), and IHG (Priority Club).
The fundamental question the Brand Vulnerability study seeks to answer is “How vulnerable are each of the top hotel groups to loyalty program member and associated spend loss, and what are their specific areas of vulnerability?”.
The answer?
According to the study, “An in-depth analysis of the frustrations experienced by primary, frequent-traveler members of the top hotel groups and loyalty programs in the US reveals that there are real consequences to being a “vulnerable” brand: combined, these 9 hotel groups are projected to lose over $10B in traveler spend in the next 12 months. The top 3 most vulnerable players ranked by Brand Vulnerability Score (BVS) – Carlson, Best Western, and Wyndham – are in fact projected to lose nearly $2B in traveler spend out of the $10B overall figure, in the next 12 months – with Carlson projected to lose $423M, Best Western, $443M, and Wyndham, $901M”.
Tell me about your experience, good, bad or indifferent, with your hotel loyalty program.
Tom Costello is the CEO and Managing Director of iGroupAdvisors, a performance improvement consulting firm that specializes in the hospitality and travel verticals.
The truth is that most hotel chains add only cost effective perks to the programs and may remove-restrict further what has proven to be too expensive to manage or cross charge.
In many cases, it is not what the guest needs or is asking for (and they know it).
A cost-effective program does not seem like big picture thinking to me and it is no suprise that guests are looking to switch. I think the loyalty program is where most of the cash should be spent, unless your chain offers such a unique experience that prevents guests from looking elsewhere. Tiziana
Tiziana, I am surprised that this piece hasn’t gotten more reaction, especially since the nine hotel brands mentioned in the cg42 study may loose up to $10 billion in 2012 from loyalty program defectors.
I am certain that readers are as shocked at as I am at the numbers.
Sharing why we think the study is correct require a specific background, so one may decide to silently acknowledge and just share in the office.
And to add to my previous comment:
It’s funny how too much spam and junk email was at the top. I personally get very frustrated if I can’t opt-out without logging in on the website. The promotion should be targeted to where the next trip is going to be (link to trip-it?). I don’t care about a promotion in Dubai, if I will be going to California. With a good IT group, it should be easy to do.
And yes, again value isn’t there. Getting room nights is like pulling teeth, the expiration of points is the worst. (it is like telling the guest, – “if you don’t come often I don’t want you”)
Clients are like anyone else they want to feel appreciated & a thank you on check inn for coming back goes a long way.
A free upgrade on check-in or late checkout goes a long way to getting another return & at end of the day it cost nothing because that suite would have probably sat empty and you have freed up an entry level room for walk in any way.
It is about having well trained front desk staff that can think.
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