Four ways loyalty programs are boosting member engagement right now
As the journey toward recovery continues and customer behaviors evolve, our industry has shifted its focus from “getting back to normal” to charting a new course. Amidst global restrictions on travel, loyalty programs quickly identified the biggest risk to their member base: with fewer opportunities to earn and limited ability to burn, could members lose sight of the value of their loyalty programs as a whole?
With the right mix of innovative program features, timely communications, and relevant offers, loyalty programs can mitigate risks of disengagement and grow meaningful connections with new and existing members for years to come. Here are four key opportunities for loyalty programs right now as we navigate recovery.
1. The earnings booster: Accelerate Anything
With members less able to earn points/miles together with restrictions on travel at the onset of the pandemic, it was important to introduce new ways to keep them engaged and demonstrate the value of their loyalty currency. In response to this new and rapidly changing environment, Points leveraged their existing technology to quickly develop Accelerate Anything; a loyalty solution that lets members build their balance without the need for travel.
With Accelerate Anything, members can multiply their points/miles balance, getting them to their reward goals faster. Loyalty programs can choose which earn categories a member can boost (almost anything from credit card spending to online retail purchases) and set the multipliers for how much they can be boosted by.
Data from a campaign we ran on behalf of a North American airline illustrates members’ appetite for this new way to keep earning: offered the choice of 1x, 2x, and 3x multipliers, 84% of members chose the highest rate of 3x. The campaign also converted a slew of members into buyers: 61% had never purchased points or miles before.1 Acquiring these new buyers will be a long-term benefit to our partners, as currency purchasers are more likely to have a higher lifetime value than non-purchasers.
2. The buddy system: partnerships with non-travel brands
Accrual from non-air sources now accounts for more than half of the miles earned in major airline loyalty programs.2 As members look beyond flights and lodging to build their balances, loyalty programs have an unprecedented opportunity to find other partners to sell their currency to and reach two goals at once: adding an additional revenue stream while giving members the opportunity to engage with your program day-to-day.
Through our Loyalty Commerce Network, Points helps our loyalty partners add ways for members to earn points and miles in their daily lives, taking ride-shares with Lyft,3 preparing meals at home with Home Chef, or even paying their monthly rent through the first-ever loyalty program for renters, Bilt Rewards. We can launch these scalable partnerships quickly and easily for programs, even if they have limited internal resources, offering a friction-free integration experience.
Allowing members more ways to earn points and miles is a winning proposition. Recent data from the partnership between Hilton and a Loyalty Commerce Network partner shows positive effects for Hilton Honors. Members who earned Hilton Honors Points by using the services of this third-party partner also completed 17% more hotel stays, and 33% more Buy/Gift currency transactions with Hilton Honors.
3. The reward goal, guaranteed: points/miles subscriptions
After a prolonged hiatus from travel, bucket-list trips are moving from “I’ll get there someday” to the top of leisure travelers’ minds. Coupled with the rise in popularity of digital subscriptions and the subscription business model as a whole—from streaming content, to grocery staples, to clothing and personal care boxes—even before the pandemic, we’re seeing strong interest from our partners to implement this model in loyalty programs.
A loyalty currency subscription guarantees members their chosen balance of points or miles in their account (for example, 50,000), to redeem at their leisure. Subscriptions appeal to goal-oriented leisure travelers, and can function as a paid loyalty program to help elite members who are accustomed to the perks of status maintain those benefits until their travel frequency resumes. In action, the subscription model is also showing signs that it attracts both valuable first-time buyers.
Recent data from one of our North American airline partners shows particular interest from non-U.S. members, and 75% of these international subscribers were buying miles for the first time. With long-haul flying still in recovery, the subscription model can engage these members until international travel picks up again. Subscriptions are also over-indexing among members aged 30 to 39, a desirable demographic for whom the monthly payment model is second nature.
4. The fast track to rewards: Top-Up
The thrill of getting a reward is a member’s ultimate goal. But when they’re not flying, staying, or earning like they used to, it takes more time to get to those cherished rewards. To keep attrition at bay, loyalty programs have to reinforce the utility of their points and miles by giving members ways to keep getting rewarded as quickly as before.
People are also thinking more about financial flexibility, having had to adjust their spending habits over the course of the pandemic, and points and miles that are seen as a flexible way to save money on travel will be even more appealing to members. Points’ Top-Up solution adds flexibility to a currency by enabling members who come up short on the points/miles they need for an award to buy them within the award-booking flow, and complete their flight, hotel, upgrade, or activity redemption right away, no matter their current balance.
Data from a North American airline’s Top-Up solution shows that members are now making larger mileage purchases, as they look for ways to successfully get rewards with lower balances. Prior to the pandemic, only 12% of members were topping up their accounts with up to half the points/miles they needed for their desired reward. In the pandemic period, that number rose to 20.5%.4
Right now, loyalty programs have a unique opportunity to create value and revenue by embracing new products and solutions designed to be there for members throughout recovery and beyond. By innovating on behalf of and in collaboration with our partners, Points can help tailor loyalty programs’ offerings to meet the needs of the new normal as they evolve.
1. Data from a campaign we ran on behalf of a North American airline from August to September of 2020.
4. Data from a North American airline’s Top-Up solution from March 2020 to today.