Tag: loyalty

3 Missed Opportunities in Customer Loyalty

by Michael Greenberg

Customer loyalty is an incredibly lucrative opportunity for brands, yet marketers still struggle to maximize their relationships with existing customers even though recent research from Forrester shows that 93% of companies have placed customer experience on their list of strategic priorities, with 28% claiming it as their top priority.

Clearly brands understand the value of each customer, yet there is a disconnect between knowing what customers need and want and the ability to actually deliver in a way that creates an experience that builds long-term loyalty. Recent advances such as runtime modeling, location-based services and the increased use of smartphones as shopping devices have greatly improved marketer’s capabilities to deliver exceptional customer experiences by anticipating customers’ needs in near real time.

Lasting loyalty is built on three basic strategies: acquisition, retention and engagement. Here are three commonly missed opportunities and how brands can best address the needs of an increasingly mobile and connected customer to foster loyal and lucrative relationships.

  1. Acquisition: Connecting on a customer-by-customer basis

    The classic CRM approach of defining segments, setting up automation based on those segments, then watching for certain things to occur and responding is still the right mindset. However, marketers’ models and understanding of non-transactional behavior and the whole context of the customer interaction needs to come into play. It’s no longer good enough to know that someone has bought a particular product in the past. Marketers need to move beyond basic segmentation and start looking at: How do I construct models that I can calculate on the fly? How do I estimate lifetime value or potential? Marketers need to be able to do these things in very short periods of time—in milliseconds as opposed to minutes.

    Marketers have a very short window to change the experience for customers, get the right products in front of them, and show what offers might be relevant to that product. Armed with that knowledge, marketers can change the experience on a customer-by-customer basis, adjusting the product, pricing and offer and content that’s relevant to the individual. For example, if you know enough to predict a high lifetime potential for a customer, you should be much more willing to spend more aggressively to acquire that customer—whether through discounts, human follow-up or differentiated service.

  2. Retention: Nurturing a higher-value relationship

    What are the pathways to higher value relationships? Marketers may be able to identify and correct misallocations of capital around email, direct mail, website, SEM or elsewhere. Yet when a customer is in front of you, engaged right now, how do you best take advantage of that slice of attention you are getting?

    In many cases it’s smarter to think in terms of the longer-term customer relationship, instead of focusing on maximizing the immediate transaction to do a better job meeting your customers’ immediate needs. For example, by waiving shipping charges (which reduces revenue but increases customer satisfaction), extending a reward certificate past the cancel date, or sending your tier two support to handle a Twitter complaint (instead of tier one) for an elite customer. Treating elite customers as average is a missed opportunity. Treat these customers differently to gain their loyalty with an eye on the long term relationship.”

    While operating in this mindset may mean less revenue in the short term, the revenue brought in over the life of the customer relationship can more than make up for it.

  3. Immediate engagement

    Marketers need to think about the same things they’ve been thinking about in marketing for a long time, but frame them in a different way. Don’t miss the opportunity to learn more about your customer at interaction points.

    We know that 50% to 70% of purchasing decisions are made on the spot, while the customer is standing in a store. So how best can marketers tell when they are there and influence a purchase decision at that very point in time? Mobile applications are getting much better at using geofences to know when a customer is near or inside a location. It’s only a matter of time before customers expect real-time suggestions, coupons, or other notifications during their shopping experience. And when a customer raises their hand and interacts with your mobile app directly, they’re primed to share more information that will let you serve them better, now and down the road.

 
So if you aren’t actively engaging at these kinds of moments, they become a lost opportunity for cross-selling, upselling, targeted offers, surprise and delights, or any of the other small opportunities that may add up to large changes down the road.

The world is changing to a much more mobile and social-centric view; the way customers interact with brands has changed and very few companies are actually keeping up. The shift to mobile has taken a lot of companies by surprise; mobile has gone through early adopters—early majority and late majority—so fast that everyone, including your grandmother and your five-year old nephew, is interacting via mobile.

Learning to steer customers through all of the various small touch points, to guide them from their current value to their potential value as a customer, is an opportunity marketers can’t afford to miss.

Original document from Chief Marketer.

What People Really Want from a Loyalty Program

Brands, what does your loyalty program offer your customers? And customers, what are you looking for in a loyalty program? According to this study from BizReport, most customers are members of at least one loyalty program. What’s your favorite loyalty program? Does it offer these features? Is it missing something? Tell us in the comments below!

Loyalty programs continue to grow across the globe, especially with younger consumers. New data out from Club Carlson shows loyalty programs are more popular with those under age 65 than those over 65, with grocery stores have the biggest programs.
by Kristina KnightNew loyalty data out from Club Carlson shows exactly what consumers want more of – points and stays. . .and also WiFi. Many believe hotel loyalty programs should include free WiFi, allowing the consumer to skip the pricey daily connection costs.
“Seventy-eight percent of Americans are members of at least one brand loyalty program; and Americans ages 18-64 are much more likely to join compared to those older than 65,” was written in the report. “Grocery stores have the most members, with 50 percent acknowledging their participation in a grocer’s rewards program. This is followed by credit cards offering points, retail stores, and hotels.”
The report also shows:

  • 4 in 5 consumers say they’re interested in hotel loyalty programs but 66% also say it takes 3 or more stays to create a loyalty bond
  • 41% say they’ll cancel a loyalty program after a single disappointing experience
  • 60% say they have more than 1 hotel loyalty program and they ‘shop around’ to find the best deal for any stay

Most (78%) of Americans are members of at least one brand loyalty program. And one more interesting note: many loyalty program members are willing to buy additional points to reach those large rewards. For example, hotel reward program members say they would be willing to pony up some cash for a free night stay when they are close to the free-stay-threshold.

Club Carlson is a global hotel rewards program; their researchers polled more than 1,000 customers between April 24 and May 1, 2013 to come to their conclusions.

Consumers Want Loyalty (Rewards)

What kind of rewards does your loyalty program offer? Consumers are enrolled in an average of 7.4 loyalty or rewards programs, but according to Maritz, they actively participate in just 4.7% of them. How are you engaging your customers to make your program part of that 4.7%?

Instant rewards, such as digital downloads of music, eBooks, software, etc., are on the rise in consumer popularity and increase redemption by offering low-level rewards. Learn more about how we can help your loyalty program engage customers with our fully customizable digital rewards platform here.

Article below originally from Direct Marketing News.

U.S. consumers have a desire for more loyalty cards in their wallets—even though they use only half of the programs they’re enrolled in now, according to the newly released study: “Maritz Loyalty Report™: U.S. Edition,” which examines brand loyalty across six different industries.More than seven in 10 of the 6,000 surveyed consumers said they had room for additional loyalty programs, even though the currently participate in an average of only 4.7 percent of the 7.4 programs in which they are enrolled, according to Bob Macdonald, president and CEO of Maritz Loyalty Marketing.

Only 35 percent of respondents were active in all of the programs in which they were enrolled, while 47 percent stopped participating in one or more programs in the past year. This high percentage of drop offs illustrates the importance of keeping customers engaged in loyalty programs, says Scott Robinson, Maritz Loyalty Marketing senior director of loyalty consulting. “Sixty-seven percent will modify where and when they buy and half will change brands depending on a loyalty program’s benefits.”

So, it’s essential that marketers recognize what will engage customers in a program and what will cause them to actively leave the program or to passively quit using it, Robinson notes. “Marketers can’t afford to outspend each other,” he says. “They can’t rely on enrollment discounts to maintain engagement. They need to focus on creating an experience.”

For example, loyalty programs should offer special experiences such as free upgrades, preferred seating, and similar benefits designed to meet customers’ desires and go beyond simple discounting, according to Macdonald.

The report’s best programs in this regard, based on customer satisfaction scores, were:

  • Chase Ultimate Rewards, (84 percent) financial services
  • Kroger Rewards (83 percent), grocery
  • Carmike Cinemas Rewards (79 percent), entertainment
  • Kohl’s Rewards (73 percent), retail
  • IHG Priority Club Rewards (67 percent), hospitality
  • Southwest Airlines Rapid Rewards (58 percent), airlines

Beyond an engaging program, other essential elements of a successful loyalty program focus on communications and balancing those communications with the customers’ desire for privacy, Robinson notes. Ninety-four percent of those surveyed said they want to receive communications from loyalty programs, but only 53 percent said that the communications that they receive are relevant. A program’s delivery of relevant communications is closely tied to participant satisfaction, according to Robinson, citing the marketing axiom of the right message needing to be delivered to the right customer at the right time. Using the right channel and the right context are equally important.

Loyalty program participants are open to more frequent communications as long as they’re relevant, Robinson adds, pointing to the study’s findings that only 12 percent of loyalty program participants say they get too many messages. But one member’s communication frequency and channel preferences may be far different from another’s, so marketers need to pay close attention to those differences and recognize that preferences change. Consequently, marketers need to stay abreast of individual customers’ communication preferences.

Similarly, to be effective, loyalty marketers need to determine the amount of personal information that a customer is comfortable with sharing and with the company using. Some customers like the idea of a company using previous purchases to make offers, while other consumers find this “creepy and weird,” Robinson says, adding that Maritz has developed a “cool to creepy” index for loyalty program communications.

What do you think? Share and comment below!

7 Customer Loyalty Programs That Actually Add Value

by Kendal Peiguss.

According to Inc.it costs a business about 5-10 times more to acquire a new customer than it does to sell to an existing one — and on average those current customers of yours spend 67% more than a new one. So, what are you doing to keep your customers coming back to your business? If you’re like 65% of marketers, your company has implemented a loyalty program. But is it working? According to the 2011 Colloquy Customer Loyalty Census, of the $48 billion worth of perceived value in reward points and miles distributed by American businesses annually, one-third goes unredeemed by consumers. Companies lose money on time and effort, and customers get no more value from the businesses to which they are “loyal.”

So how do you keep your business out of that one-third segment? How do you convey enough additional value in your programs to keep your customers coming back? It’s time for marketers to look beyond convoluted rewards systems and offer actual value to customers using their loyalty program. To get you started, here are some ideas for customer loyalty programs that might work for your business.

7 Customer Loyalty Program Ideas for Your Business

1) Use a Simple Points System

This is the most common loyalty program methodology. Frequent customers earn points, which translate into some type of reward. Whether it’s a discount, a freebie, or special customer treatment, customers work toward a certain amount of points to redeem their reward. Where many companies falter in this method, however, is making the relationship between points and tangible rewards complex and confusing. Fourteen points equals one dollar, and twenty dollars earns 50% off your next purchase in April! That’s not rewarding, that’s a headache. If you opt for a points-based loyalty program, keep the conversions simple and intuitive.

One example of a company using a points-based loyalty program well is Boloco. They speak the language of their audience by measuring points in dollars, and rewards in food items. Customers swipe their stylish Boloco card at every purchase and the card tracks the amount of money spent. Every $50 spent earns the customer a free item. Doesn’t matter if they choose a super jumbo burrito or an extra small smoothie – it’s free after $50. This is an example of a company simplifying points with an accessible customer reward system.

Although a points system is perhaps the most common form of loyalty programs, it isn’t applicable to all business types — this type of loyalty program is most appropriate for businesses that encourage frequent, short-term purchases.

2) Use a Tier System to Reward Initial Loyalty and Encourage More Purchases

Finding a balance between attainable and desirable rewards is a challenge for most companies designing loyalty programs. One way to combat this is to implement a tiered system. Offer small rewards as a base offering for being a part of the program, and encourage repeat customers by increasing the value of the rewards as the customer moves up the loyalty ladder. This helps solve the problem of members forgetting about their points and never redeeming them because the time between purchase and gratification is too long.

Virgin Airlines’ Flying Club inducts members at the Club Red tier, then bumps them up through Club Silver and Club Gold. Club Red members earn miles on flights and get discounts on rental cars and hotels. Club Silver members earn 50% more points on flights, expedited check-in, and priority stand-by seating. Club Gold members get double miles, priority boarding, and access to exclusive clubhouses where they can grab a drink or get a massage before their flight. The key is to offer benefits in the early stages to hook the customer into coming back. Once they do, they’ll realize that “gold” status isn’t unattainable, and offers really cool benefits.

The difference between points and tiered systems is that customers extract short-term versus long-term value from the loyalty program. You may find tiered programs work better for high commitment, higher price-point businesses like airlines, hospitality businesses, or insurance companies.

3) Charge an Upfront Fee for VIP Benefits

Loyalty programs are meant to break down barriers between customers and your business — are we seriously telling you to charge them a fee? In some circumstances, a one-time (or annual) fee that lets customers bypass common purchase blockers is actually quite beneficial for business and customer alike. By identifying the factors that may cause customers to leave, you can customize a fee-based loyalty program to address those specific barriers.

In 2011, eCommerce shopping cart abandonment hit a record high of 72%, and is still rising. This abandonment is often caused by “sticker shock” after tax and shipping prices have been applied. ECommerce giant Amazon found a way to combat this issue in their loyalty program called Prime. For $79 annually, Prime users get free 2-day shipping on millions of products with no minimum purchase, among other benefits.

This program is innovative because it charges loyal customers while providing enough in return for those frequent shoppers to realize the benefits. Analysts estimate that Amazon actually loses about $11 annually for each Prime subscriber, but makes up for it in increased transaction frequency that would not have otherwise happened without their exclusive benefits.

Clearly this system is most applicable to businesses that thrive on frequent, repeat purchases. For an upfront fee, your customers are relieved of inconveniences that could impede future purchases. Amazon has mastered this for eCommerce, but this loyalty program model also has potential to work for B2B businesses who deliver products to businesses on a regular basis.

4) Structure Non-Monetary Programs Around Your Customer’s Values

Really understanding your customer means understanding their values and sense of worth. And depending on your industry, your customers may find more value in non-monetary or discounted rewards. Every company can offer promotional coupons and discount codes, but businesses that can provide value to the customer in ways other than dollars and cents have an opportunity to really connect with their audience.

Patagonia, an eco-friendly outdoor apparel company, realized that their customer needed more than just points and discounts from a loyalty program. Late last year, the company implemented its Common Threads Initiative. In it, they partnered with eBay to help customers to resell their highly-durable Patagonia clothing online through the company website.

This program builds on their brand of sustainability and creating a high-quality product, and it matches perfectly with the company’s customer persona by providing a value that they really care about. So before implementing a loyalty program of this nature, be sure you’ve researched and designed an in-depth customer persona!

5) Partner With Another Company to Provide All-Inclusive Offers

Strategic partnerships for customer loyalty, also known as coalition programs, can be extremely effective for customer retention and company growth. Again, fully understanding your customers every-day lives and their purchase process will help determine which company is a good fit as a partner.

American Express has a huge partner base with companies across the country. Their recentTwitter Sync campaign rewards customers for tweeting about them by syncing discounts and deals with Twitter #hashtags. According to Visibli.com, cardholders have redeemed over $2,000,000 in rewards. Participating companies that are benefitting from their coalition with Amex include Whole Foods, Staples, and Zappos.

For example, if you’re a dog food company, partner with a veterinary office or pet grooming facility to offer co-branded deals for mutual benefits for your company and your customer. The target audience obviously owns a dog, so any services that dog will require offer added value from your company. Providing customers with value beyond even what your company can offer will show that you understand them, and grows your network to reach your partners’ customers, as well.

6) Make a Game Out of It

Who doesn’t love a good game, right? Turning your loyalty program into a game is a fun way to encourage repeat customers and, depending on the type of game you choose, help solidify your brand’s image.

GrubHub, an online food ordering and delivery website, started Yummy Rummy late last year. Once customers place three unique orders through GrubHub, regardless of price, they get to play a game for a chance of winning free stuff. Players choose one of four cards and have a 25% chance of winning a free dessert, drink, gift card or other cool stuff.

It’s important that customers understand you’re not duping them out of rewards, though. The odds should be no lower than 25% and the purchase requirements to play should be attainable. This type of loyalty program has potential to backfire if customers feel like your company’s jerking them around to win business. Executed properly, however, this type of program could work for almost any type of company, even an off-the-beaten-path B2B company. If your audience enjoys having a little fun and purchases frequently, this type of program can make the buying process fun and engaging.

7) Scratch the ‘Program’ Completely

Considering how many marketers are offering loyalty programs (whether they are effective or not is another story), one innovative idea is to nix the idea all-together. Build loyalty by providing first-time users awesome benefits, hooking them, and offering those benefits with every purchase.

The concept sounds simple, but one of the most innovative companies on the planet implements this strategy: Apple. Even the most loyal Apple customers don’t get special rewards or discounts … because they don’t offer them to anybody. Apple “enchants” customers by delighting them with a product or service the first time. The loyalty is voluntary and long-lasting, according to Apple evangelist Guy Kawasaki. Apple has plenty of supporters, both online and off, ready and willing to rave about their product. For them, loyalty happen organically.

This minimalist approach works best for companies whose products or services are unlike any other. That doesn’t necessarily mean that you offer the lowest price, or the best quality, or most convenience — I’m talking about redefining a category. If, like Apple, your company is pioneering a new product or service, a loyalty program may not be necessary. Customers will be loyal because there are few other options as spectacular as you, and you have communicated that value from your first interaction.

Measuring the Effectiveness of Your Loyalty Program

As with any initiative you implement, there needs to be a way to measure your marketing success. Customer loyalty programs should increase customer happiness and retention; and there are ways to measure these things besides in rainbows and sunshine. A lot of ways, actually. Different companies and programs call for different analytics, but here are a few of the most common metrics companies watch when rolling out loyalty programs.

Customer Retention Rate: This metric is an indication of how long customers stay with you. With a successful loyalty program, this number should increase over time as the number of loyalty program members grows. Run an A/B test against program members and non-program customers to determine the overall effectiveness of the loyalty initiative. According to Fred Reichheld, author of the Loyalty Effecta 5% increase in customer retention can lead to a 25-100% increase in profit for your company.

Negative Churn: Churn is the rate at which customers leave your company; negative churn, therefore, is a measurement of customers who do the opposite — upgrade, or purchase additional services. These help to offset the natural churn that goes on in most businesses. Depending on the nature of your business and loyalty program, especially if you opt for a tiered loyalty program, this is an important metric to track.

Net Promoter Score: NPS is a customer satisfaction metric that measures, on a scale of 1-10, the degree to which people would recommend your company to others.

NPS is calculated by subtracting the percentage of detractors (customers who would not recommend your product) from percentage of promoters (customers who would recommend you). The fewer detractors, the better. Improving your net promoter score is one way to establish benchmarks, measure customer loyalty over time, and calculate the effects of your loyalty program. A great NPS score is over 70% — your loyalty program can help get you there!

Customer Effort Score: CES asks customers, “How much effort did you personally have to put forth to solve a problem with the company?” Some companies are vying for this metric over NPS because it measures actual experience rather than the emotional delight of the customer. A Harvard Business Review study found that 48% of customers who had negative experiences with a company told 10 or more people. In this way, customer service impacts both customer acquisition and customer retention. If your loyalty program addresses customer service issues, like expedited requests, personal contacts, or free shipping, this may be one way to measure its success.

Low-level redemption is certainly a great way to retain your initial customers! Learn more about how we can help with that by implementing our fully customizable digital rewards platform into your loyalty program.

What do you think? Does your loyalty program utilize any of these strategies? Leave us a comment below!

Original document from Hubspot.

IHG commits to free internet for all loyalty members worldwide; renaming Priority Club Rewards to IHG Rewards Club

IHG (InterContinental Hotels Group) has announced that it will be providing free internet to all its 71m loyalty program members, worldwide. The announcement comes as IHG reveals the results of a global online survey which show that nearly half of adults (43%) would choose not to stay in a hotel that charged for internet.

IHG will offer free internet in all hotels to all loyalty program members, globally – whether they stay the night or come in for a coffee or an impromptu meeting. It will benefit millions of guests globally as IHG has the most rooms and is in more countries than any one of the other four largest hotel companies in the world. This will start from July 2013 for Elite members and extend to all members during 2014.

The move comes as IHG announces that it will be enhancing and renaming its industry-leading loyalty program Priority Club Rewards as IHG Rewards Club in July and introducing a range of new benefits for members.

Internet access is increasingly important to hotel guests and a key consideration when planning their hotel stays. New research commissioned by IHG reveals that:

  • 43% of adults surveyed said that they would choose not to stay in a hotel that charged for internet.
  • 23% of respondents said that free internet in rooms and throughout the hotel is the most important amenity when staying in a hotel for business, compared to 7% who chose room service.
  • Travellers from China placed the most importance on online connectivity – with nearly half (47%) listing it as the most important thing to them when staying in a hotel for business, followed by those from Russia (26%), the US (23%) and India (22%).
  • Travellers from the UK (18%) and the US (14%) both listed paying for internet as the second most annoying thing when staying at a hotel after noisy guests (22% and 24% respectively).
  • Globally, more female respondents (14%) say free internet throughout the hotel is most important to them when staying for leisure, compared to 2% who listed having an in-room hairdryer.

From July, new benefits will include:

  • free internet to all Elite status members from July 2013 and extending to all members during 2014;
  • the ability to earn Elite status faster by staying in three or more of IHG’s hotel brands;
  • Reward Nights will count toward earning Elite status; and
  • Platinum Elite members’ “extra” nights will roll over toward maintaining their status in their next membership year

Original document from Colloquy.

Capital One Survey Reveals Rewards Redemption on Rise; also offering Purchase Eraser

This “Black Friday,” the traditional prime holiday shopping day, nearly half of rewards card holders are not planning to hit stores or online retailers according to the latest Capital One Rewards Barometer, a quarterly survey among American consumers that focuses on how they accumulate and redeem credit card rewards. However, that doesn’t necessarily mean holiday shopping budgets are down as more than half of rewards card holders’ (58 percent) budgets remain the same as last year and 14 percent are planning to spend more this year. Credit card rewards can help supplement these holiday budgets, yet only 18 percent are taking advantage of redeeming rewards for gifts.

More than one-third of respondents said the economy has changed how they use rewards, especially women with 23 percent reporting that they now use rewards to offset essential expenses like gas and groceries. Further, this holiday season, more women plan on spending less than the prior year in comparison to men (24 percent vs. 18 percent). Thinking ahead to post-holiday shopping bills, men and women are on the same page with one-quarter planning to use their cash rewards earned from holiday shopping as a credit on their statement to offset holiday expenses.

The hustle and bustle of holiday travel is the ideal time to take advantage of rewards, but more than a quarter of those who tried to redeem rewards for travel were unable to do so with blackout dates to blame. With 24 percent of respondents still undecided as to whether they’ll plan to travel this holiday season, these blackout dates as well as rewards restrictions may prevent their last minute travel. In fact, more than half would consider traveling during peak holiday periods (e.g. within 1-2 days of Thanksgiving, Christmas and New Years), if guaranteed to be able to use rewards for their trip. Interestingly, nearly 80 percent of respondents haven’t even tried to redeem for holiday travel this year, with many saying that they thought it was too much of a hassle (28 percent) or they didn’t have enough time to plan (29 percent).

Additional trends stemming from the Rewards Barometer this quarter include:

  • Since 2011, the top three credit card rewards have been cash, gift cards and domestic airline tickets.
  • Since the spring of 2012, 40 percent of rewards card holders consistently reported they prefer a simple rewards card offering the same rate across all purchases.
  • Approximately one-third of consumers remain unaware if they are charged a fee or additional expenses when using rewards to book travel.
  • Over the last year, approximately half of rewards card holders remain unaware that they may be charged foreign transaction fees for purchases made while traveling abroad.
  • Capital One is also reminding cardholders that they can Book Now, Redeem Later. Customers can retroactively redeem rewards online and on your Smartphone within 90 days of your travel purchase with Purchase Eraser.

More about Purchase Eraser here:

Original document from The Wise Marketer.

Priority Club Rewards adds Digital Rewards

InterContinental Hotels Group is to offer its 65 million Priority Club Rewards members a new way to redeem Priority Club points: Digital Rewards. From the first club™, a global provider of instant digital rewards, Digital Rewards is designed to provide members with the latest in downloadable content including music, games, and software. According to a Mintel survey, members are motivated by loyalty programmes that provide instant and easy ways to redeem.

The Digital Rewards offers have been integrated with Priority Club’s existing point redemption choices. Examples of the new offers include well known songs from popular artists across genres including pop, country, alternative rock, R&B, and oldies, starting at 300 points. Popular games such as sports, action/adventure and puzzles are available from 800 points. Software for members’ home offices, foreign language education and multimedia tools are also available, starting at some 1,100 points.

Original Document from The Wise Marketer.

IHG Adds Instant Rewards to Encourage “Light User” Loyalty

For the average consumer who travels a couple of times a year, at best, earning enough points as a hotel loyal member to redeem for a free night’s stay, car rental or another high-point reward can seem almost an impossible task. One hotel, IHG (InterContinental Hotels Group), has debuted a new redemption category that it hopes will encourage new members and light users to see value in its loyalty program and stay dedicated to the brand.

The category—digital, instant rewards—is a shift toward value during a time of economic uncertainty that has greatly affected hotel loyalty programs. With approximately $16 billion dollars in loyalty points that went unredeemed in 2011, hotels are focused on reaching low threshold members, with relevant rewards.

IHG is offering the rewards, developed by the first club™, a provider of digital rewards, to its 65 million Priority Club members. With as few as 300 points, members can download music; 800 points earns popular games themed in sports, action and adventure, magazines and puzzles, and once more than 1,200 points have been earned, software for the home office, foreign language education and multimedia tools are available.

“Our primary goal is to engage light users and new members who have not built up point balances and who don’t realize the value yet,” Don Berg, vice president, loyalty program, IHG, said. “Instead of waiting for three or four more stays, they can redeem quickly and be more engaged early on. They will realize this thing has value and continue to seek out our hotels. There’s a stickiness to the rewards program when you can get people to experience what the value proposition is, which is of course, redeeming points. If you can get your members to be engaged with what your product is they will naturally give you more business.”

IHG, which surveys its loyalty members on a regular basis, used surveys to determine what members liked or didn’t like about the program, what they wanted and how it could be improved. Instant rewards came out of that research and the concept was then tested with about 300 members.

“We wanted to have a full understanding of how it would perform before we put it out in the marketplace,” he said. “We know through the surveys that these programs are influential and impact member behavior.”

An extensive network of electronic communications delivers messaging about the new digital rewards category, including email, e-newsletters, bloggers and the Priority Club website.

IHG does in the range of $200 million in redemption value per year.

“That’s a lot of value being redeemed by our members and a lot of interest in the program,” Berg said. “It doesn’t take long for members to find out about these things, because there’s a pretty strong viral component to these announcements.”

He said IHG was the first hotel chain to offer a loyal program in 1983 and that it still has 50,000 original members actively earning points.

“Loyalty is exploding in the marketplace because customers are price conscious,” he said. “If you can build a relationship with a customer, especially one that is less price sensitive, you can avoid discounting and move yourself ahead of the competition.

Research by Colloquy has shown that 32% of respondents said the recession has influenced their participation in loyalty programs. IHG hopes instant rewards will encourage more frequent participation.

“The whole idea is to keep people engaged everyday,” Jill Goldworn, president and co-founder of the first club™, said.

Original Document from Chief Marketer.

the first club™ and IHG Partner to Offer Priority Club Digital Rewards Program

priority club rewards

First-in-kind program introduces instant point redemption for Internet and mobile downloads

LOS ANGELES and ATLANTA, May 30, 2012 – Starting this month, IHG (InterContinental Hotels Group), which manages the world’s largest hotel loyalty program, Priority Club® Rewards, will offer its 65 million members worldwide yet another fast and flexible way to redeem Priority Club points. Digital Rewards™ from the first club™, a global provider of instant digital rewards, is designed to engage consumers with the latest in downloadable content including music, games, and software.

The first hotel loyalty program to offer comprehensive digital rewards, IHG illustrates the industry’s move toward relevant rewards that keep guests engaged, regardless of their point accumulation. According to a Mintel survey, members were motivated by loyalty programs that provided instant and easy to redeem opportunities.

“We are a hotel loyalty program with many firsts and the new Digital Rewards offering continues this tradition,” said Don Berg, vice president, loyalty programs and partnerships, IHG. “Our innovation and partnerships are driven by recognizing what our members value most, and making it available through Priority Club Rewards before other loyalty programs.”

The Digital Rewards program has been designed by the first club™ to be readily accessible and visible through priorityclub.com, particularly to members whose past point redemption preferences indicate a likely interest in the new offering.

“We’re very excited to have developed IHG’s digital rewards redemption offering. They have embraced digital rewards as a new phase in loyalty and customer engagement, and we’re ready to help expand their existing successful rewards program to a new level,” said Jill Goldworn, President and co-founder of the first club™.

Leisure travelers, particularly families, want value from their hotel loyalty programs. Digital Rewards is a flexible option to help those with low point accumulations find an alternative point redemption option. And, all members will benefit from the fact that the Digital Rewards offers have been easily integrated with Priority Club’s existing point redemption choices.  Through the first club™’s global licensing agreements, members will have access to the most current and largest library of digital content available on the reward program market.

Some examples of the new Digital Rewards point redemption offerings include:

  • Well known songs from popular artists across genres including pop, country, alternative rock, R&B, and oldies – starting at 300 points
  • Popular games such as sports, action/adventure and puzzles – available from 800 points
  • Software for your home office, foreign language education and multimedia tools are available – starting at just over 1,100 points

By providing millions of titles of branded digital content such as eBooks, games, music and software, the first club™ creates  relevant rewards by satisfying consumers’ desire to get a product when, where and how they want it. Furthermore, research by Colloquy¹ has shown that 32 percent of respondents said the recession has influenced their participation in rewards programs.

Visit IHG’s Digital Rewards Page to browse the full catalog of music, games and more. If you are not yet a Priority Club Rewards member, the program is always free to join by calling 1-888-211-9874 or downloading our mobile app.  Start experiencing great benefits like No Point Expiration and No Blackout Dates for booking Reward Night stays, when you earn through easy, unique ways such as the Priority Club® Select VISA card.

the first club™ Expands Global Footprint and Digital Rewards Offering With New Partnerships in Russia, Mexico and Brazil

the first club™ Expands Digital Rewards Offering to Brands Through New Partnership Offices with Russia-based LMC Group, Mexico-based Digital Loyalty Rewards, and a Brazil-based partnership between Souza Aranha Marketing and Fernando L G Guimarães Publicidade 

Los Angeles, CA – 26, January 2012the first club™ (TFC), a global leader in digital rewards and loyalty solutions has announced a new partnership with three new local offices as part of the Company’s global growth strategy.  The first is Moscow-based licensing and promotions agency, LMC Group and this partnership will bring the first club™‘s digital rewards solution including its B2C site, to brands and loyalty programs in Russia while expanding the company’s presence further across Europe.

Based in Moscow, LMC Group was founded in 2004 by veterans of the loyalty marketing space and retail business industries. Fully aware of the continuing shift toward digital rewards and the mobile platform, the company offers licensing, promotional and loyalty solutions, and is the perfect partner for the first club™‘s digital rewards platform and licensing programs.

LMC Group will also represent the other services of the first club™ including licensing services, digital sales promotion campaigns, theatrical partnerships, and viral marketing campaigns.

Vladislav Us, founder of LMC Group adds: “The current economic climate demands inventive, cost effective promotions and rewards tools for businesses to draw, retain and reward customers. We want to deliver these solutions including the first club™ to Russia with the same effectiveness and creativity that the company has already brought to the European and U.S. markets.”

The Russian agency will be an especially powerful asset known as a thought leader in the loyalty sector, will aid in the  expansion ofthe first club™ in Europe while benefiting international travelers from the first club™‘s other competitive submarkets in the UK, Mexico, Continental Europe and Turkey. 

Mexico City-based Digital Loyalty Rewards was founded by veterans of the marketing and Mexican retail business industries. Taking advantage of the continuing shift toward digital rewards and the mobile platform, the company offers licensing, promotional and loyalty solutions, and is a perfect match to the first club™‘s related core services.

Digital Loyalty Rewards will also represent the other services of the first club™ including licensing services, digital sales promotion campaigns, theatrical partnerships, viral marketing campaigns and many more.

Daniel Suarez, founder of ­­­Digital Loyalty Rewards adds: “The current economic climate demands inventive, cost effective promotions and rewards tools for businesses to draw, retain and reward customers. We want to deliver these solutions including The first club™ to Mexico with the same effectiveness and creativity that TFC have brought to the European and U.S. markets.”

And our third partner office is Sao-Paulo based partnership between Souza Aranha Marketing, a consultancy firm, and Fernando L G Guimarães, a relationship marketing expert and author (Os Pilares do Relacionamento translated,”the Pillars of Relationship”), with a solid reputation throughout Brazil. Mr. Guimarães helped create and manage the Smiles Program, from Varig, currently Gol, a leading Brazilian airline, and experience managing loyalty programs with several manufacturing and FMCG companies, and serves as a board member of Abemd, Associação Brasileira de Marketing Direto (Brazilian Direct Marketing Association). Souza Aranha (www.souza-aranha.com.br) is a consultancy firm specialized in CRM representing in Brazil companies such as Salesforce.com, Miller Heiman and Direxions. Mr. Eduardo Souza Aranha, head of the consultancy firm, was also part of the team that structured the Smiles Program and is a board member of Abemd, as well. The result of this combined partnership will no doubt strengthen the first club™‘s relationships in Latin America.

Denis Huré, Co-founder and CEO of the first club™, believes these partnerships will bring tremendous value to all of the companies’ clients. “Their experience, knowledge and strong relationships with brand partners within their respective markets will be a tremendous benefit in expanding our loyalty and rewards solution across the world, and comes at a critical time when loyalty programs are looking to differentiate themselves.”

One of the biggest shifts taking place in the loyalty world today is the digitization of rewards and loyalty programs, as evidenced by a report released by the company earlier this year called Loyalty: Looking Forward.  Both the first club™ and ­­­­­­­Digital Loyalty Rewards believe that 2012 will see downloadable digital content increasingly being used by companies to promote brand loyalty and to incentivize customers to instantly redeem their rewards from any device, and any time.

the first club™ has developed a unique portal where consumers can access the very latest in digital content including over 60 million choices in apps, mp3s, PC games, mobile content, eBooks and Audio Books, and shortly movies, in return for redeeming rewards instantly.  The portal has been specifically designed to enhance loyalty reward programs, corporate incentives and sales promotions giving unique access to the entertainment world on a global scale.