HONG KONG, 8 June 2016: Sharing business models such as AirBnB and low-cost airlines are challenging the value of loyalty programmes and raising new questions about what customers truly value according to Prophet a global brand and marketing consultancy.
In its latest evaluation of loyalty programmes it cautions companies to revisit what is offered in their loyalty programmes to “ensure they maintain a strong brand connection with customers”.
“To truly inspire greater share of wallet, companies need to break free from current thinking, where loyalty programmes equate to a kick-back for reaching certain thresholds of activity,” said, Prophet’s Hong Kong office associate partner Alan Casey. “They need to offer meaningful benefits that enhance the overall experience”
Companies first need to know what their customers value, and understand that they probably don’t all value the same things, he said.
Prophet recently worked with Cathay Pacific to update its Marco Polo Club loyalty programme through analysis that helped redefine customer tiers. The revamped scheme uses club points to replace club miles and sectors, providing benefits and a customer experience more accurately aligned with customer profiles and needs. New rewards for mid-tier customers were also introduced to create more reasons to continue to use the brand.
Hotel brands like Marriott and Starwood have also developed highly rated loyalty programmes by listening to customer needs. They have innovated ways to offer greater flexibility, additional services and even curated experiences that could not be accessed elsewhere, such as SPG Moments which enables top tier members VIP access to key events.
The recently announced merger of Marriott and Starwood has sparked speculation about the future of the merged group’s loyalty scheme and what role it will play in future.
Casey noted: “It remains to be seen if they further invest in a combined loyalty programme or decide to scale back current benefits as the two chains are integrated.”