Anyone with even a rudimentary understanding of marketing knows that customer loyalty and loyalty programs are changing rapidly. The old spend and reward model is quickly being supplanted by programs that focus more on customer experience. Organizations in travel, sports, and entertainment are leading the way in taking customers beyond the simple points accumulation model by reinventing the concept of loyalty programs and making them more experienced-focused.
Phil Rubin, CEO and founder of rDialogue, a customer loyalty and relationship marketing firm, recently chaired a panel discussion at the 9th annual Loyalty Expo, presented by Loyalty360 – The Association for Customer Loyalty, titled, “CX Getaway: Building Loyalty in Travel and Entertainment.”
Joining Rubin were Kristi Gole, Director of Loyalty Marketing for Global Hotel Alliance (GHA); Norman Vossschulte, Director of Fan Experience for the Philadelphia Eagles; and Michael Marino, Senior Vice President of Loyalty and Digital for Caesars Entertainment.
Rubin opened the conversation by asking: “Loyalty marketing; chicken and egg or one in the same?” He then invited his panel to reflect on how loyalty marketing has changed in recent years.
“We launched a loyalty program a few years ago to have a product that was more business-to-business,” Gole explained.
GHA is the world’s largest alliance of independent hotel brands. It brings together various independently operated hotels in 76 countries and allows members to enjoy the benefits of associated properties.
“We wanted a program that gave customers a reason to travel to our other hotels,” Gole added. “This is the core product of our company. The more people stay at our member hotels, the more the hotels make and the more we make in fees. Rewarding customers is just part of the core of our business. We run a global organization.”
Instead of giving points that can be redeemed for, say, a free night, with an associated hotel, GHA’s loyalty program lets guests experience local cultures and unique attractions where each hotel is located.
Marino spoke about how his company’s program, Total Rewards, the oldest in the gaming industry, has evolved.
“Total Rewards was founded as Total Gold at Harrah’s,” he said.
That was back in 1998 and, a few years later, Harrah’s acquired Caesar’s Entertainment and took its name.
“Back then it was, ‘spend with us and we’ll reward you,’” Marino explained. It was relatively unsophisticated and based on math. A simple algorithm.”
Before the acquisition, Caesar’s had built a reputation for taking care of its so-called high rollers or those who spent a lot in the casino and elsewhere on the property. Not only did high rollers get free rooms, show tickets, and meals, but special considerations beyond simple discounts and free services.
“When Harrah’s bought Caesar’s,” Marino said, “it created a loyalty program for everyone. We merged those two and now you have a loyalty program that everyone values. It’s been a pretty good match. We’re going back to the original Caesar’s model a bit, to make the customers realize they are special to us.”
To fans of a sports franchise like the Philadelphia Eagles, points are not important.
“Well, on the scoreboard they are,” said Vossschulte. “As far as loyalty, no.”
Most sports teams, particularly those that have been around for a while, already have loyalty baked in.
“Our fans feel like they are part of a family,” Vossschulte said. “You can’t have a loyalty program that doesn’t feel authentic. Our fans would feel like you’re just trying to upsell them.”
The Eagles build authenticity by focusing on season ticket holders and rewarding them with unique fan experiences. Regular fans and out-of-market fans can also be rewarded, but your odds are greater as a season ticket-holder.
“Our CEO has said ‘I could spend $200,000 on a program that puts an RFID card in every fans hand, or I could give you that money to create experiences,” Vossschulte said.
The Eagles, of course, do the latter which they believe comes back and has a positive impact on the bottom line.
“Going back 30 years or so years, when loyalty marketing really started,” Rubin said, “the onus was always on the customer to prove their worth to the brand and the quid pro quo was ‘if I prove I’m loyal to you, you’re going to do something to make my life better with free stuff and discounts.’”
That is no longer the case of course.
“The model needs to flip,”Rubin added. “It’s incumbent upon brands to be loyal to customers and that’s where customer expectations are and that’s why millennials are totally willing to give up their data, but there’s got to be something in return. It’s not just about free stuff. You can get plenty of free stuff.”