Loyalty Truth

Evidence of the health of the loyalty marketing business is that my list of subjects to write about grows faster than I can type.

Yesterday, as I picked up the USA Today slipped under the door in my NY hotel room, a glossy 8 1/2 x 11 flyer fell in my lap and changed my blogging plans for the day.

“It’s Like Joining EVERY Hotel Loyalty Program. Except, it’s only one.” was the message. Flipping the piece over, the offer was clear: book  and stay 10 nights using Hotels.com and earn 1 free night at any of the 60,000 hotels offered through the site worldwide. Better yet, signing up for the WelcomeRewards™ challenge offered the chance to win 2 bonus nights over the course of 30 total nights booked.

The punch card might be the oldest loyalty tactic in town, but it works well for Southwest Airlines and for Hotels.com. I did a quick comparison and the simplified approach is not too far away from the basic value promised by traditional hotel loyalty providers Marriott and Intercontinental Hotels Group. For example, if a member of Marriott Rewards or Priority Club stays 10 nights at one of their respective properties with average room rate of $100, a free night is on the radar.

I know that Marriott and IHC offer multiple ways to boost earnings and have much more sophisticated programs overall, but for the budget driven traveler, joining WelcomeRewards™ is not a bad deal.

Interesting to me is that the program was launched in July 2008 but has had low visibility in the consumer eye. Also, given that Hotels.com is an operating company of Expedia, I wonder why the ThankYou! Rewards currency that Expedia uses wasn’t extended over to this brand.

WelcomeRewards™ comes with a few conditions (a/k/a the Loyalty Asterisk™), specifically:

• Rewards may be redeemed at “eligible” hotels, but I could not find that term defined on the web site
• The maximum value of a free night can’t exceed the average daily rate of the 10 nights used to earn the reward. You can however, choose to pay the difference if you really want to stay at a higher priced property
• Taxes, fees, meals, incidentals and any “other costs associated with the booking” are not covered by the free night
• Each loyalty credit is valid for three (3) years from date earned
• The program may be terminated by Hotels.com at any time

Summing it up, the flyer that dropped in my lap reminded me why brands continue to choose data-driven incentive (Loyalty) programs to engage and retain customers. Far too many people that I have heard from are using travel aggregator sites like Hotels.com and Expedia to shop around and then login to their frequent guest account at the airline or hotel chain of their choice to book reservations.

To break the habit, Hotels.com had to do something and WelcomeRewards™ is an easy to understand program that delivers sufficient value change a few consumer minds.