I am currenly managing a hotel loyalty program. Like most loyalty programs, our members earn points for a certain amount of dollars spent in our establishments. Once they reach the minumum redemption, members can choose award vouchers of their choice. Earlier this year, we conducted a survey and asked our guests what benefits they valued the most. To our surprise, guaranteed upgrades and points redemptions were last. Now we are in the process of revamping our loyalty program and we will no longer offer redemption of points. Do you think a loyalty program will be unsuccessful without the point structure system that many organizations are using?

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I'm not at all surprised to learn that points redemption, as a feature of your program was last in preference, and that guaranteed upgrades was the most desired.

To be perfectly straightforward and honest, I have a very different perspective on loyalty programs than most in my profession. With few exceptions, the vast majority of loyalty programs are neither strategically differentiating for the sponsor nor are they effective at rewarding a supplier's best customers. Continuing my straightforward mode, they are usually me-too, cookie-cutter variations of the reward programs that have gone before them. Points programs were more effective years ago, when there were fewer of them and they had more individuality; but, these days, they tend to be complex and bothersome, where people want simplicity. Worse, as noted, they tend to look alike, creating little additional loyalty for the sponsor.

Loyalty programs, to really optimize share of wallet for a supplier, should embrace all desired benefits/solutions a customer receives, both tangible and intangible. In other words, loyalty can be drawn from everything that contributes to perceived value with the experience. Besides Ritz-Carlton in the lodging industry, the best industry 'loyalty' program I've seen is Wyndham ByRequest. It's clearly well researched. There are no points on this program, but it has:

- Room personalization, driven by a detailed customer profile
- Opportunity to earn miles at any rate on ten participating airlines
- Free 800 calls (I just stayed at a luxury hotel this past weekend while working with a client, and each of my 800 calls to my long distance provider cost $2.00. Wow!)
- Free high-speed Internet access (My laptop has Ethernet capabilities, so I really appreciate this)
- Best available room at check-in
- Express check-in
- Dedicated phone support
- ByRequest manager at each hotel
- Membership offers, such as low package rates at Wyndham resorts
- Review stay history on-line

Whenever I have a choice, I now prefer to stay at a Wyndham. My suggestion is to look, as well, outside the industry for innovation. One example is the Aloha Club of Chart House Restaurants. In addition to other benefits, Chart House has differentiated the program by offering an around the world trip for two for anyone who dines at all their restaurants. So far, several dozen patrons have done so, giving Chart House an incredible amount of free publicity, and attracting many new members for their club program.

This was first published in November 2001

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