The value of a loyalty programme plummets for its members if the reward range offered is limited to just flights, upgrades and hotel rooms, according to new research.
Programmes offering only “core” rewards are considered dated and old-fashioned, loyalty membership and marketing specialists Collinson Latitude say.
The research was carried out globally among 2,250 members of airline and hotel loyalty programmes in the United States, United Kingdom, Middle East and Asia. Some 61 per cent of travellers wanted a broad spectrum of rewards, while 71 per cent said the value of a loyalty programme decreased if it offered only a limited range.
Overall, half of airline loyalty members and a third of hotel loyalty members said they had redeemed non-core rewards.
In the shopping-friendly Middle East region, this increased to two-thirds of airline loyalty members and half of hotel loyalty members.
On the Emirates High Street, for example, your Skywards miles could buy a Radley bag, a Montblanc pen, a Roberto Paggio watch or a Macy’s gift card.
Etihad Guest members can swap miles at the Reward Shop for an Apple iPad or even Apple Watch, or a Beats headphones.
Jumeirah’s Sirius points can only be used within the hotel group, but still stretch to spa days, diving, a day at Wild Wadi water park and shopping or dining at Jumeirah restaurants.
The research also found that people who actually use their loyalty programme to buy themselves a small reward are more likely to keep on spending with that brand.
Guy Deslandes, the e-commerce sales director for the loyalty company, says that if travel brands can get the mix right, it becomes a “very compelling combination”.
“Members want more choice of rewards in their redemption programme,” he says. “When the breadth of rewards is expanded, we see that member loyalty and spending increases.”
The story changes somewhat for small to medium-sized businesses, which think short-term and want to book cheap fares at the eleventh hour.
British Airways’ new On Business programme has been tailored to suit their needs, by offering discounts upfront on flights as an alternative to collecting points for redemption flights.
Is there value for an airline or hotel programme in offering other stuff, though?
Yes, according to Collinson Latitude. After buying non-core rewards, their research showed, 57 per cent of both airline and hotel loyalty members went on to book another flight or room. Burning, it says, actually drives earning.
Tell me more about BA’s SME programme.
As BA began to realise the potential of SMEs (which represent 94 per cent of companies operating in the UAE) in fast-growing markets, they realised that such businesses were being penalised for shopping around and changing bookings by airlines which discourage change and encourage early bookings. They created On Business to reward companies for loyalty, providing points per booking rather than distance flown and allowing date and time changes to flights.
What other loyalty programmes are available to me as an SME?
Etihad has BusinessConnect, for small companies with two to 50 business travellers, while Emirates has Business Rewards for businesses with fewer than 80 travellers and Qatar Airways has QBiz. AirArabia launched the first Airewards, the first low-cost carrier rewards programme in the Mena region, last year, although this is for all flyers, not just businesses.