When was the last time you heard someone gushing about a loyalty program – outside of an annual report or an investors’ conference? Customers today are more demanding than ever before as loyalty programs become part of the nondifferentiated status quo.
Flo Lugi, non-executive chairman of the Global Hotel Alliance, sums it up here:
“Most consumers initially join a loyalty program as a way to save money (thus the huge increases in membership by the hotel brands), but they also want something extra.”
According to Forrester, 59% of U.S. adults who are online and belong to a customer loyalty program say that getting special offers or treatment that isn’t available to other customers is important to them. For highly active members, that number rises to 69%.
Customers want more out of their loyalty programs, with 56% of U.S. adults who are online seeking enhanced customer services, such as member-only events or services. This is a growing trend that clearly demonstrates the importance of experiential rewards.
This is especially true for millennials, for whom the ability to capture “in-the-moment” cachet experiences and share them with their social network is extremely important.
Going from transactional to emotional connections
One of the biggest motivators of true loyalty is the emotional connection a customer has with a brand – yet most rewards in loyalty programs are based on transactions. How frequently that guest visits and how much she spends, versus why. Having these elements is only the beginning, as consumers evolve to expect “customized” offers and experiences, based on their actions, behaviors, and activities that go beyond a booking or stay.
To drive true value, loyalty programs need to be considered as only one part of an overall customer engagement and relationship management strategy, designed to evoke highly emotional responses in customers. Are intrinsic or extrinsic drivers guiding your guests to become repeat customers?
For this to work, profiles must be enriched with real-time data on customer interactions across offline and online touchpoints. Only by marrying transaction data with social, behavioral and activity-related data can companies provide highly personalized and contextually relevant experiences and drive customer engagement and, thus, true loyalty – and the rewards that come from it.
Customer experience is the sum of all interactions – whether that occurs in the digital or the physical world – and it’s healthy for business that we keep raising the bar on customer expectations.