Guy Deslandes, E-Commerce Sales Director at Collinson Latitude, part of Collinson Group
Hilton’s recent shake up of its loyalty programme is a bold move for the company and will impact the whole travel and hospitality sectors. Rebranded as “Hilton Honors”, members are now able to choose how they are rewarded for their loyalty.
Individuals can choose what proportion they would like to take as loyalty points and as cash, as well as redeeming them via Amazon’s Shop With Points initiative.
Our recent research amongst 2,500 loyalty programme members found that only 38% of respondents believe their loyalty programme rewards reflect their lifestyle and interests, and 75% of members look for programmes with more choice of rewards, including non-core inventory when choosing a travel loyalty programme.
Hilton’s change in approach, like many other loyalty programmes, is reflective of a desire to offer more choice and better integrate with its member’s lifestyles. Forward-thinking organisations are exploring ways of making it easier for members to earn and redeem more points in more places; to part-pay with points when shopping online and offline as well as offering rewards beyond their own immediate sector.
What they are creating is a wider loyalty commerce ecosystem, that helps programme providers make loyalty a more significant part of their members’ everyday lives. There are a number of trends that will drive these changes:
The increasingly intelligent use of data
Most of us are already aware of the importance of contextualised personalisation when it comes to loyalty programmes. For rewards to truly appeal to members, they need to be reflective of the members’ lifestyles, and having insight into personal preferences is anchored in the more thorough use of data and technology.
With our recent global member research finding that only 38% of travel and financial services members believe their loyalty programme rewards are fully reflective of their lifestyle and hobbies, there is clearly a lot more work to be done.
Consumers will only continue to expect a higher level of personalisation – something which is a growing trend across industries. This is why the utilisation of data for greater insights remains so key, whether it’s used to improve the customer journey when accessing a programme, drive the way in which it is marketed, or tailor the reward or retail promotion on offer.
Something that we will begin to see more of is brands utilising data to tactically place offers and rewards in front of customers so that their behaviour is influenced at specific time slots.
For example, just as Uber practices surge pricing, there’s logic to suggest that loyalty programmes will soon start to introduce variable pricing, in order to be savvier and capitalise on the peak times members are engaging with their programmes.
The more touch-points the better
Increased member engagement will only arise when loyalty programmes continue to find ways of naturally integrating new touch-points into the day-to-day lives of their members, allowing them to earn and redeem in a way that’s easy for them.
There are already many examples of excellent earn and redemption online loyalty platforms, such as those from FlyingBlue, Avios, Accor and Virgin Atlantic, but the real winners will be the brands that can effectively replicate this approach in an offline, in-store environment.
Our global member research supports this, with 61% stating that the ability to earn and redeem loyalty currency both in-store and online as important and or very important, so finding new touch-points within the customer journey and tapping into them at the right point in time will be crucial.
Demand visionary thinking
One thing that is clear is that technology needs to be built around the member. While this may sound logical, in the past this hasn’t always happened – often due to out-dated legacy IT systems or loyalty programmes not being at the front of IT development queue.
A true loyalty ecosystem gives brands the capability to grow around the members of their programme and, consequently, providers should look for suppliers who think beyond just the next six months.
One technology that has seen its star rise in the last year is virtual reality (VR) and while it may not be conquerable for all companies, it does give a beacon of light into how we could all evolve.
Expedia, for instance, recently created its third VR based tool, which allows consumers to explore the famous Flam Railway, billed as one of the most beautiful train rides in the world, before they get there.
The consumer demand for emerging technologies such as VR shows no sign of abating. In fact, when we asked members about the importance of brands being seen as early adopters of technology, 71% of members agreed that they favour these innovative companies.
Travel and hospitality industry brands need to be at the forefront of technology developments – if they don’t keep up, they can be sure that there will be those born out of the digital age capable of swooping in and stealing market share.
Hilton’s announcement is a step in the right direction and one that other brands should follow to not only keep up with the pace of changing consumer demand, but retain and grow their member base and importantly, grow their revenues.