Two Sides of Loyalty: Customization & Configurability

Brand loyalty is in a tenuous position. Today, it’s estimated that one in three U.S. consumers aren’t loyal to one brand. Younger generations, especially, have demonstrated a willingness to switch products or services, regardless of how long they’ve been loyal to a particular brand.  

But that hasn’t dampened the proliferation of loyalty programs nor diminished their importance to businesses. In fact, brands in every sector have reacted to the perceived fading of consumer loyalty by revamping their loyalty programs to make them more attractive and improve customer retention. Case in point:   

With this level of loyalty program participation – and with more than 90% of companies offering some form of loyalty program -  brands must think outside the box to make their programs stand out. 

This is where the two sides of the personalization coin come into play: the ability to offer tailored rewards to members and configure the program to the brand's unique needs. In this article, we examine the role of personalization, travel rewards, and technology and explore how companies can create flexible programs that reflect their brand identity. 

Personalization from the Consumer Perspective 

Travel rewards are viewed as extremely attractive by consumers. Millennials – the largest part of the active workforce – are especially open to travel rewards. It is why 38% of Millennial respondents to iSeatz’s recent survey of U.S. consumers belong to a loyalty program that offers travel rewards. 

However, travel is a vast industry with countless travel styles, locations, and experiences. Offering the travel experiences customers want is one of the leading challenges businesses face; data from PWC reveals that 80% of executives admitted their loyalty programs are similar to others within the same industry rather than unique to their brands.   

Consumers want personalized rewards from their travel loyalty programs--here are some interesting data points to support that:   

  • Today, 91% of consumers said they were more likely to shop with brands that provide relevant offers . 
  • Nearly 80% of consumers liked buying from a brand offering personalized experiences. 
  • Loyalty program members who experienced personalization executed well saw a 6.4x increase in overall satisfaction rates. 
  • 75% of U.S. consumers in our recent Tipping Point for Travel Loyalty survey think receiving more personalized offers would help them save more on travel. 
  • And 50% of U.S. consumers are more than willing to share their travel wish list with their travel loyalty program to get personalized offers, coupons, or discounts, according to our survey. 

It is clear that consumers have a strong preference for personalization. The question is, how do companies capitalize on this demand? Our research shows three key personalization areas are critical to successful travel loyalty programs. 

Customized Experiences 

Travel rewards are attractive, but brands must provide the experiences customers want. Personalized experiences lead to more redemptions, conversions, and greater retention: approximately 69% of travelers were more loyal to travel companies when their experiences were personalized online and offline.   

Within the framework of loyalty programs, brands have a unique opportunity to provide personalized options at every stage of the booking journey. It can also facilitate upselling and cross-selling, which can increase revenue.  

But with thousands of potential combinations of travel options modified by a variety of member-specific parameters, companies must leverage their data within an intelligent booking platform that utilizes next-generation technology, such as AI and machine learning.  

Some examples of how this level of personalization might play out in practice include: 

  1. Company A sends an email blast to all members with a certain number of points accrued to encourage them to redeem their points. They use previous travel history to send targeted emails asking whether they want to return to that destination. 
  2. Company B launches a campaign that matches each member’s points balance to hotels where those points could get them free/heavily discounted nights. Using browsing history, travel history, and other metrics, this campaign can be further personalized to highlight destinations and experiences specific customers may respond to. 
  3. Company C targets members who may have looked at specific destinations/experiences but abandoned their purchase. These may be combined with time-sensitive offers to encourage them to revisit their unconverted bookings. 

Countless options exist for leveraging data to deliver true personalization. Whether pre-booking, post-booking, or in the middle of booking, companies have a unique opportunity to deliver offers for travel rewards as and when the customer is likely to need them. 

Personalization from the Brand Perspective 

Personalization benefits everybody, but significant challenges exist in creating a loyalty program that resonates with members and faithfully reflects brand identity and values. Let’s examine what it takes for a loyalty program to achieve its potential from the brand’s perspective. 

Rewards Portfolio 

Mass-marketing loyalty programs usually focus on broader rewards to entice as many customers as possible. For example, a rental car company may amplify its brand identity with discounts on items like gas or groceries because it can assume (reasonably) that most of its customers would be interested in those rewards. 

Contrast this to a luxury hotel brand looking to reinforce its image. The hotel brand may offer more targeted rewards, such as spa deals, breakfast in bed, or limousine-style airport transfers. Brands that want to take advantage of personalization must go further in their portfolios.   

Brands also need the right reward portfolio to give customers the desired choices. Many brands, including those with a tiered loyalty program (in which they target different customer segments in each tier), need a portfolio broad enough to offer each member segment the appropriate type of reward. But rather than actively force customers to search for relevant rewards from a vast catalog, the loyalty platform itself must deliver what a particular customer or member may be interested in using the data they have about them. 

Brand Values 

Personalization also offers the chance to project a brand’s values via its reward system. For example, green travel companies may want to offer personalized rewards that concentrate on sustainable travel.   

And this is important as part of the broader market. Consumers demand that brands align with their values. According to a study, 82% of shoppers want a brand’s values to align with theirs, and three out of four shoppers said they would part ways with a brand due to a conflict in values. The right loyalty platform enables brands to fill their portfolio accordingly. Enabling personalized offers to align with your brand’s values is a form of branding that can aid in retention and loyalty. 

Technical Complications 

Vast reward portfolios and travel rewards aligning with the brand's and its customers' values present immense technical challenges and require platforms with the flexibility to adapt accordingly. 

If a company wants to focus on high-margin rewards over a certain period, support a rapidly changing portfolio, add and subtract rewards on the fly, or launch tailored content quickly on a mass scale, they will need a platform with the flexibility to meet those requirements.  

Fully customizable loyalty platforms enable businesses to protect their brands and tweak their offerings to maximize personalization potential in the loyalty sector. Core to achieving these things is a loyalty platform’s architecture that enables customization without the high-time, high-cost approach that comes with the traditional custom build process. It’s precisely this that iSeatz offers as part of its flexible, one-stop loyalty platform. 

Meeting the Loyalty Challenges of the Future 

Loyalty is a battleground; companies failing to perform well in this area face losing customers and brand equity and declining brand value. In other words, brands are leaving money on the table. Deloitte reveals that 70% of consumers spend more and engage more with brands when signing up for a loyalty program. But having a program alone is not enough. 

Customers demand personalization in their travel rewards. Likewise, brands must overcome the technical and logistical challenges of implementing reliable hyper-personalization into their loyalty campaigns. 

Understandably, many companies lack the in-house resources and expertise to manage the process. Instead, thereis a blue-water opportunity for third-party loyalty platform partnerships. Ultimately, the brands that can put their loyalty efforts on autopilot via platforms that can offer sufficient personalization at scale, real-time configuration, and flexibility will be the ones that succeed. 

New loyalty challenges also represent opportunities for brands to differentiate their programs and increase their market standing. By offering more personalization within loyalty programs at the micro-level, companies can boost lifetime value, improve engagement, and expand their brand footprints to grow their bottom lines. Will your brand rise to the challenge?  


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