Hotels Can Do Better than Points Based Loyalty Programs
My 522 points with a well known car rental company have been unused for 24 months. During that time I’ve rented several cars with other providers and driven thousands of miles across Europe – why didn’t I use the points and what does that mean for hotels? Let me explain.
In the Beginning
Points based loyalty programs were created way back in the 80s because there was no data available about guests and their behaviours so this was the best chance at turning customers into repeat purchasers and ultimately brand advocates.
Over the decades, points based loyalty programs have evolved so much that for many major businesses like Starbucks, Accor and Hertz, they are an extension of the brand.
What Does Chasing Points Actually Get You?
In 2019 I decided I would try and move up to the ‘Silver tier’ of my car rental loyalty program. To do that I had to rent a car 6 times in 1 year. I decided to go for it, thinking that this could save me money or at least give me a better experience in the long run. It did neither.
After reaching the Silver tier and 522 points, I rented cars to travel to the South of France from Amsterdam twice for a total of about 75 days. I’ve taken day trips to visit the in-laws in The Netherlands several times and I’ve rented cars in the UK when visiting my family.
Each time I would check first to see if I could use my points. Unfortunately 522 points would get me about half a day with an economy class car. So of course, I would find a cheaper provider.
In fact, the only benefit I ever got from chasing points was not because of the 522 points, but because I went back to the same friendly, bearded guy at Schiphol Airport each time. After a few visits and some chatting he started voluntarily upgrading me if possible.
The fact that he knew my name, a little bit about me and could give me a personalized experience was better than any points I’ve ever earned.
During the last 24 months, I’ve received 24 monthly emails reminding me I have 522 points in my account. What a waste. Most people would’ve unsubscribed by now, losing them to any chance of becoming a repeat guest.
If they had the data they would know that I have frequently traveled domestically in The Netherlands and that I tend to go on holiday to France. With this information they could proactively reach out and say, “Hey Will, going to France this year? If so, click this link and we’ll give you a free upgrade”. It’s not that hard…
Guest Loyalty is Not Dead, Just Changed
The guest relationship cycle should be continuous. It’s the job of the provider to ensure they have the right data to personalise, appreciate and reward their guests to keep the cycle going and to build loyalty. The potential to build guest loyalty is massive, and can be done at every stage of the guest journey. The points based system is outdated, expensive to run and simply is a lazy attempt to build loyalty. It should not be up to the guest to figure out how to use points to be rewarded. It is up to the hotel to figure out how to use data to reward.
At the end of the day, knowing your guests and appreciating them goes much further than points. Every interaction is an opportunity to build that bond with your guests.
It’s time to collect better data to drive demand. Know your guests and communicate to them proactively. Learn more about Revinate CRM here.