Loyalty schemes are a powerful tool for driving advocacy, but done badly and they mean your customers will amplify the wrong message about your business.

2. Travel loyalty programs are
a bubble. And it may be
about to pop…

3. “A new study of over 4,000 business and leisure
travellers showed hotel loyalty programmes have little or
no impact on their purchase decisions and could even be
driving consumers to switch brands.”

4. “Four-out-of-ten UK residents who collect air miles or
points have never tried to redeem them while six-out-of-
ten complain it takes too long to collect sufficient points to
gain anything of value.”

5. “On average, nearly half of hotel guests' annual spend is
not with their preferred brand and almost a third were"at
risk" of switching their preferred brand.”

7. The Sales Pitch
Avios/BA Amex
“Our fee–free Card lets you collect Avios on your
everyday spend and unlock a world of exciting
opportunities, from reward flights and upgrades to hotel
stays and car rental”

8. The Reality
You need to spend £15,000 on a BA Amex card just to
earn enough miles to take a BA return flight to Rome -
and even then, you‟d still be left paying for the
taxes, which can be up to half the regular fare.

9. The Sales Pitch
Hilton Honours
“We will be expanding to ten hotel reward categories to account
for all of the new hotels and resorts that have opened in the past
few years. With 3,900 hotels and resorts in 90 countries you are
sure to find the perfect place for your next reward stay.”

10. The Reality
Probably the worst single hotel loyalty program devaluation
we‟ve ever seen. The award price of some hotels and
resorts has risen by as much as 90 percent. As of March
28th 2013, your hard-earned points are worth next to
nothing.

11. The Sales Pitch
Emirates
Skywards
“Frequent flyer benefits get even better as you move up
tiers, so you can look forward to advantages such as lounge
access and dedicated check-in.”

12. The Reality
When a customer earns 25,000 tier miles in one year they
are able to go from Blue to Silver – this requires between 15
and 30 flights from Istanbul to Dubai to be taken in one
year, not an easy feat. If you are travelling to Dubai and
pack light & print the boarding pass, there is not a single
benefit for being a Silver Skywards member (minus the
couple hundred extra miles that is earned).

13. The Sales Pitch
IHG Priority Club Rewards
“Get the special recognition and benefits you so richly
deserve. As a Platinum Elite member, you‟ll enjoy exclusive
benefits available only to our most valued guests.”

14. The Reality
The most you seem to get is a drinks voucher at check in
with some properties and if you‟re lucky an upgrade to a
better room or corner view if available. Here in the UK it's as
if you've never been in their hotel before, rather than
upgrade you‟re given a token piece of fruit or worse than
that a 20% off voucher.

15. The Sales Pitch
Delta SkyMiles
“Did you know we‟re the only major U.S. airline without
mileage expiration? That means you have the freedom to fly
with us and redeem your miles on your timeframe.”

16. The Reality
It turns out your „expiration free‟ miles expire when you do.
As of the 20th March 2013, your miles can no longer be
inherited by your next of kin when you die. Charming.

18. Listen to their desires
“Find what is most meaningful to guests, such as free Wi-Fi, parking, breakfast or lower
rates.”
Offer mini-rewards as incentives
“62% of consumers said being able to use their points to purchase goods such as
electrical items or travel accessories would act as an incentives”
Make the rewards more accessible
“70% of scheme members said that making rewards more accessible would encourage
them to collect.”

19. Give members the ability to top up rewards with cash
“The ability to top up rewards with cash to buy goods was popular with 63% of those
who collected points”
Make top-tier members feel extra special
“Your loyalty program reward tiers must make sense to your guests and create
appropriate distinctions for the top tier members”
Be transparent
“Transparency and what points are really worth is going to be an increasing challenge.
Consumers will want to know if earning two points on one scheme is better than earning
one point on another”
Establish a two-way value proposition
“As you design your program, determine which rewards have the highest value for your
customers but also have the lowest internal cost for your company.”

20. http://forteconsultancy.wordpress.com/2011/02/28/loyalty-programs-gone-wrong-%E2%80%93-ten-common-mistakes-to-avoid/
http://www.emirates.com/english/Skywards/about/skywards.aspx?showinterim=true
http://milepoint.com/forums/threads/airline-loyalty-schemes-failing-to-take-flight-new-study-shows.62783/
http://boardingarea.com/blogs/onemileatatime/2013/02/21/what-the-past-few-weeks-have-taught-us-about-hotel-loyalty-programs/
http://www.travelmole.com/news_feature.php?news_id=2004769
http://www.guardian.co.uk/money/2009/sep/13/loyalty-schemes-value-for-money
http://articles.latimes.com/2013/jan/28/business/la-fi-travel-briefcase-20130128
http://www.delta.com/content/www/en_US/skymiles.html
http://www.travelandleisure.com/travel-blog/carry-on/2013/4/12/trip-doctor-deltas-expiration-free-skymiles-now-expire-with-you
http://www.deloitte.com/view/en_US/us/Industries/travel-hospitality-leisure/72ce4f52478ab310VgnVCM1000003256f70aRCRD.htm
http://www.europeanbusinessreview.com/?p=2845
http://www.ihg.com/priorityclub/hotels/us/en/global/offers/platinum
http://www.businesstraveller.com/discussion/topic/Priority-club-platinum,-worthless
Sources

21. If you are keen to move beyond loyalty
schemes fuelled on commoditised interactions and
you know that your audience deserves relationships
driven by value, and built from meaning, talk to us…
Pomegranate, where the journey is as exciting as the
destination.