Loyalty Marketing in Turbulent Times

The good news is that the affluent are still spending, but they’re being more prudent in how they spend. So how best to attract this clientele? Loyalty programs can be a key differentiator among competition, because individuals are taking a closer look at these programs for added value and benefits.  The airlines were the first success stories with their frequent flier miles programs – allowing loyal customers to save a bundle with free flights, upgrades, etc. But recently, travelers are giving these programs a bad rap, because of the lack of award seats on flights, escalating fees and taxes for “free tickets” and quicker expiration dates for miles. Giving benefits, and then taking them away is a sure fire way to lose the confidence of your customer base.

 Hotels have also had these programs for years and are relaxing restrictions to tantalize members. For example Marriott Rewards recently announced they are scrapping blackout dates, platinum bonus goes from 30%-50%, and they’ll give a fifth-night free when redeem four nights. Destinations have been slow to get on the bandwagon. And now we have Jamaica, which created the first destination loyalty card to boost travel, its ‘OneLove’ membership card. Available in 2009, the membership can buy $1,000 worth of accommodations, transportation and entry to attractions and special events. The travel industry should take note and start looking for creative ways to differentiate. Focusing marketing efforts on to the two core groups of customers who can most directly influence revenue – high-value customers you want to retain (give them special benefits and access unavailable to the general population to keep them spending at their current level) and high-potential customers you want to grow (give them offers to shop more often and spend more during each visit using targeted discounts and bonuses).

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