The future of travel loyalty programs

The future of travel loyalty programs

Loylogic published a study regarding loyalty programs. It resulted that nowadays, there is a shift in customer’s satisfaction:

• ·         58% of the travelers prefer earning points on the web: being connected any time, any where is a habit today, and being available on the web is a crucial issue for companies.
• ·         43% indicated that travel was their preferred non-core reward category (Merchandise (26%) and experiences (10%)). This figure demonstrates that consumers want a wide range of options when comes the time to convert their points into rewards.
• ·         75% of travelers are satisfied they can use their points or miles on what they want and when they want

• ·         22% would like more redemption options
• ·         3% indicate they can never use their points or miles on appealing rewards.

Loyalty programs are structured marketing efforts that reward, and therefore encourage, loyal buying behavior - behavior which is potentially of benefit to the firm.

Their aim is to influence the behavior of consumers in order to make them repeat purchase. More, an efficient loyalty programs is able to change normal repeat-purchase patterns into ‘Excess loyalty’ for brands in the program.

Concretely, loyalty programs are used through free cards / paying cards, adapted to your spending potential. The more you spend, the more you can earn points that you can later converts into rewards.

Loyalty programs are experiencing an increasing popularity around the world. Nearly 75 percent of shoppers in the U.S. now belong to at least one loyalty program.

With almost 2 billion loyalty program memberships in the U.S. and more worldwide, the “one-size-fits- all” loyalty program will no longer suffice. It is vital to practice individual marketing level.

The study revealed that 22% would like more redemption options, that is to say nearly 1 out of 4 people. The more personalized, the more attractive are the programs. What is the point of collecting points, or miles, if there is nothing interesting for you in the ends?

Rewards must be targeted and personalized. According to Loylogic, key features of futures travel loyalty programs are:

• o   Higher miles value at unchanged costs
• o   More rewards including non-air travel
• o   Personalized reward experience
• o   Worldwide reward delivery
• o   One electronic interface

Regarding Hospitality pursue a very different business model compared to frequent flyer programs. Leading hotel chains offer attractive reward solutions to their worldwide member bases. The key challenges and opportunities the industry is facing vary among regions but include:

• o   Deliver packaged travel for points
• o   Setting up and managing global reward solutions
• o   New accounting standard

With the increasing number of cunsumers being members of a loyalty programs, hotels and travel companies will have to compete in order to elaborate the more attractive, personalized, and efficient programs!