A new research report from Forrester Research shows that an increasing number of people are cashing in their airline and hotel rewards points for other types of merchandise. The report indicates that due to the struggling economy, people aren’t interested in flying away or staying at a nice hotel, but they will certainly take the points to get a discount on a magazine subscription, for example.
This is somewhat counterproductive to what a loyalty program is all about. To be fair, the customer probably appreciates the “free money” from their loyalty program provider. But will that necessarily drive brand loyalty the next time the same person does need to book a flight or stay in a hotel? I’m not convinced it will. And neither should you as you begin to think about structuring your loyalty and rewards program.
If you operate an airline, your goal is to get people to fly with you, not purchase a magazine subscription. The same goes for hotels.
Loyalty programs are a way for you to build even more excitement for your business with your customers. But in order to truly have an effective loyalty program, you must bring value to your customer AND your business. You want to give rewards that entice customers into elevating their commitment to your company. Rewards programs should ultimately prompt your customers to spend more money on what you sell, not on what someone else sells.
