Whether shopping online, reserving a hotel room or even booking a flight, today’s consumers and travelers have unlimited payment options when it comes to making a purchase. But there’s one common question most customers ask themselves that makes the decision to pull the trigger on that purchase a bit easier – what will I get in return?
Consumers, especially those dedicated to specific brands and retailers, expect benefits, perks and rewards in return for their repeated business. As a result, many of today’s merchants are taking note by building loyalty rewards programs which incorporate one key ingredient to help set their programs apart from the rest - flexible currency.
More choices, more engagement
Consumers are looking for value beyond spending loyalty rewards in the same programs they are earning in. They are looking for the freedom to choose how they earn and redeem their loyalty currency. In fact, recent research by American Express revealed that 72 percent of Americans say they would prefer a rewards program that allows them to shop at multiple stores versus a single brand. For example, a loyalty program with flexible redemption options could allow consumers to earn points by purchasing a coffee at their favorite coffee shop, but turn around and spend those points when filling up their gas tank at the station down the street.
We are seeing the transformation of loyalty programs in the hotel space too as they bring more value and convenience to loyal members. In January 2016, La Quinta Inns & Suites launched a program where La Quinta Returns members earn loyalty points at La Quinta’s 880+ locations, which can be redeemed at properties not in their competitive set. Members have the added convenience of choosing to redeem their rewards for stays at 11,000+ luxury properties around the world, outside of the La Quinta brand.
Adding flexibility to loyalty programs by presenting the opportunity for consumers to earn points in one loyalty program, and spend them in another, is a solution that not only makes rewards programs more valuable to customers, but also increases their engagement and likelihood of a repeat purchase.
Leveraging loyalty through flexibility
One tactic brands and businesses can utilize to make their programs more flexible is leveraging the loyalty currency of established rewards programs that people already know and love. By partnering up with an existing loyalty program, merchants can increase the number of the ways people can redeem their loyalty points, and as a result, further engage their customers.
Take Southwest Airlines for example, whose Rapid Rewards members are able to earn and redeem points across a variety of brands and industries. Members have the ability to reach their redemption goals faster by exchanging points earned from hotel programs like Marriott Rewards and Hyatt Gold Passport, and turn them into Southwest Rapid Rewards points. Similarly, Lyft partnered with My Starbucks Rewards to give Lyft drivers and passengers to ability to earn loyalty stars that can be redeemed for food and drinks at Starbucks stores. The more they ride, the more stars they’ll earn.
While it may seem counterintuitive to offer rewards in other programs, this strategy gives your existing customers greater incentive to engage with your brand because of the increased flexibility to earn and burn loyalty points and rewards.
A loyalty win-win
It’s becoming increasingly important for rewards programs to make the switch towards more flexible loyalty by offering the ability to redeem and spend points and rewards in a variety of ways. Flexibility is a win for loyalty program members who have more choice with their loyalty, and it’s a win for the programs as it increases program value and levels of engagement.
By offering freedom and flexibility when it comes to earning and burning points and rewards, businesses can not only make their loyalty programs more valuable to consumers, but in turn, increase program engagement among their rewards members.
About Christopher Barnard
Christopher Barnard is the co-founder of Points and its president since 2000. Christopher is paving new ground with the further innovation of the Points Loyalty Commerce Platform. In 1998 he co-founded Canada's first internet business incubator, Exclamation International, from which Points was created. He initiated the team of innovators that grew Points into an international company with over 150 employees.
Points is a global loyalty currency management provider. Via a state-of-the-art loyalty commerce platform, Points provides loyalty ecommerce and technology solutions to the world's top brands to enhance their consumer offerings and streamline their back-end operations.
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