A Different Type of Value
Business Traveller Africa|March 2017

The speed of technological development in the modern age and the rise of millennials in the workplace have resulted in many industries having to change the way they’ve traditionally done business. The loyalty space is no different, as Kate Kennedy discovered.

Kate Kennedy

The days of a one-dimensional loyalty programme that sees the customer earning points with a particular airline or hotel and redeeming them for a free flight or bed night are over.

Customers are no longer interested in an apples-for apple programme - they want to exchange strawberries and mangoes and oranges for apples. Thankfully, apple vendors – airlines, hotels and car rental companies – are open to this exchange.

That’s a good thing, because it ’s what is going to keep them relevant and in touch with the needs of their customers. Fortunately for the brands, customers still want to belong to loyalty programmes, but those brands on the receiving end are having to work even harder than ever before to show those customers real value.

It ’s about value and meaning, driven by a younger generation of loyalty customers that see things differently from their older counterparts.

“Both consumers and businesses recognise the value of loyalty programmes,” says Sharon De Leur, Emperors Palace Marketing Manager for the Peermont Hotels, Resorts & Casinos group. “Businesses and brands are strategically teaming up to offer more unique value-adds and lifestyle benefits to enhance the consumer’s perceived value of the loyalty programme.”

The problem is, in most cases, regardless of the sector, there are so many different brands to choose from. So, what’s going to be the deciding factor?

”Travellers are no longer swayed to stay at a hotel that does not meet their expectations just for the opportunity to earn points,” says Saurabh Rai, Executive Vice-President for Preferred Hotels & Resorts. ”Our goal is to always serve as that trusted source, offering a hotel experience that meets individual needs and a loyalty programme that helps members to quickly identify whether a property can offer a combination of quality assurances with the appeal of points, recognition, and rewards.”

So, it ’s also about quality then.

What it isn’t about now days, is rewarding only the big spenders at the top end of the market.

The traditional, and somewhat out-dated, model of frequent flyer programmes rewarded only the top 10% of customers, lavishing priority handling, free business or first class seats and airport lounge access on the people who were more often than not f lying on the company dime. For the economy class leisure traveller footing his own bill, it was extremely difficult to earn enough miles to exchange them for anything worth while.

This left a huge bank of potentially loyal – and untapped – customers for an airline to tap into. But figuring out how to lure them in seems to have taken a while.

”The customer loyalty landscape has changed significantly over the past decade or so, and many businesses are struggling to keep up,” says aha Real Rewards Manager Linda Naidoo. ”Traditional loyalty programmes aren’t delivering the results brands need in an increasingly competitive and consumer-led environment.”

As a result, brands have had to think out of the box.

“Members have come to expect perks such as discounted rates and the points-for-stay model, so to stand out a programme needs to have a unique value proposition supported by brands customers love in the places they want to go,” says Mark Weinstein, Senior Vice-President & Global Head of Customer Engagement, Loyalty and Partnerships at Hilton.

“Today’s guest is searching for a personalised, relevant experience.”

So, how does one get ‘up close and personal’ with the customer, in order to deliver the personalised, relevant experience that Weinstein speaks of?

The answer? Data.

We’ve all heard about the value of ‘Big Data’, but it ’s how you use that data that is key. Loyalty programmes are no different from many other sectors now looking at the data on offer to help deliver that ultimate brand experience.

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