There’s an interesting philosophical question brewing in the world of points, miles and loyalty as programs iterate. You could say that manufactured spending and the play for more members is playing a big part in the brew — and you probably wouldn’t be wrong.
Should “better” members get better access to prized redemptions with points?
This is a big question for so many reasons, in part because defining a “better” member is subjective. Is it the length of their loyalty, their annual spending, or the wallet share? The list of potential metrics goes on and on.
Points Are Going Pop
Points are making their way into every household around the world, much like ear worm pop songs. They’re too valuable not to collect at all, and people are becoming savvier with their behavior not only in travel, but every day rewards too.
As more companies link up to travel brands, from rewards credit cards to extra points on grocery shopping, there are more and more points in the marketplace. And… a lot more people earning them.
What people value as a reward can vary, but in travel the competition tends to be for seats in the pointy end of the plane, or hotels where the water is clear and the weather is too.
With so many people competing for such precious space, how does a loyalty program best decide who gets it? Or, do they just let members duke it out?
Putting Better Members First
Though it’s at times forgotten, points are a two way street. We’re not just dogs on a lead being pulled aimlessly. If something is no longer worth earning, we as humans are smart enough to move elsewhere, or not play at all. Well, at least sometimes.
Putting the most loyal members first in line for the most prized redemptions, either with advanced access or an increased number of seats or suites for people who check certain boxes is one approach.
The most engaged members with the high elite status undoubtedly appreciate the exclusive access and a better chance at fulfilling their goals. When pledging years of loyalty, taking out a co-branded credit card and prioritizing travels to stay loyal to a brand, there’s a lot that feels “right” about this.
Why should some internet savvy kid get a seat my 79 year old dad is desperate for, when he’s been a great customer for 50 years and just lacks the online proficiency to snag seats or hotel rooms the minute they come out? By the time he picks up a phone someone on the internet has snagged it.
It’s Like Selling Croissants
At the point of everyone with points having equal access, redemptions are a purely transactional relationship. That’s completely fine. It *may* be better that way. But the real world shows it doesn’t always work like that, does it?
It’ like a bakery with the very best croissants and a democratically formed line with people paying cash. You want one? Be there when it opens. Too late, you miss. Is that the way it really works, though?
Many bakeries set back a few of their very best croissants for regulars who might have unavoidable schedule conflicts with the opening bell, or for friends who plan to swing by.
These inconvenient side truths are everywhere and you don’t have to look any further than restaurants holding back tables for regular or unexpected VIP guests. We have a table, just not for you.
Hospitality can pull you in both directions — equitable and preferential — and in their best forms, travel businesses are hospitality businesses that just so happen to house or transport people.
Equal Playing Field
With the equal playing field approach, there’s an opportunity for wider joy for more members. Or is there?
More members is very much in line with the constant goal of growing the size of a loyalty program and more access for more people sounds like an obvious choice to drive that goal. Each member brings financial value and marketing each.
People don’t like to feel as if the “best stuff” is only kept for people in positions they’ll never be able to attain, like top tier elite status. But ultimately a precious commodity goes to a very precious few anyway.
Do people end up feeling more frustrated because they felt like they should’ve had a chance, but the most prized hotel rooms, airline seats or suites were long gone by the time they got there, anyway?
This is where broadening rewards can help big time. Some people are just as happy with a Michelin starred dining experience as an airline seat. The more choice, the more members are pulled in various directions and not all competing for just one thing.
Should all redemptions be based on auction so that everyone can put in a bid?
That’s a very dangerous slope as well, because it goes back to the question of metrics. Is the number of points someone holds the best indicator of brand loyalty? Is that how you define the customer you’d like to feel the most reward from your program?
Thanks to manufactured spending and the entirely unfair playing field it creates for a select few, the answer is no. People with no loyalty or brand affinity amass more points in a year than a great long term member may amass in their lifetime.
Driving Behavior By Stratifying Things
What if there was an achievable goal in front of you, that once achieved could get you preferential access to something you want? Maybe a 5 day early window to book any points seats a year out, or better pricing on that seat?
The wonderful free market that is loyalty programs allows programs to create games within games to drive behavior. This curated approach allows programs to strike a fine balance between prioritizing some things for the “best” members, while leaving other things up for auction, or first come first serve.
When these levers are pulled correctly, they pull everyone in.
Take out our credit card and get to wait list with points for 2 more flights than anyone else? That sounds very, very tempting for people with any flexibility.
Highest tier members feel rewarded with opportunities here and there for things they value. Low tier new members find plenty of things they can achieve — and occasionally auctions allow competition among members to dictate price.
What do you think?