Bill Hanifin
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Starwood Hotels & Resorts and Uber announced a partnership offering Starwood Preferred Guest (SPG) members the opportunity to earn SPG points while using the collaborative taxi service, Uber.
To qualify for the rewards, consumers need to link their existing SPG and Uber accounts via this SPG URL and must complete 1 qualifying stay during the calendar year at any Starwood hotel in the globe. Once set-up, SPG members can earn between 1 – 4 points per dollar of Uber fare paid.
Giving SPG members the ability to earn SPG points for Uber rides is a brilliant example of what we like to call “Smart Partnership”. Brands seeking to accelerate value in their customer loyalty programs can often unlock unexpected value through alignment with compatible brands and clever cross-promotion.
*Screenshot from SPGpromos.com/Uber
SPG is building a portfolio of similar partnerships, as it already has deals with Delta Air Lines and Emirate Airlines.
One quick reality check on the loyalty math that underpins this offer. Consider that one hotel night can be redeemed in the SPG program for 20,000 SPG points and that this room night has perceived value of $200.
If you assume an average taxi fare of $20 and that the rider is earning the maximum allowable in the exchange – 4 points per dollar for an “in stay ride”, then 80 points would be earned from the Uber ride.
With those assumptions, it would take 250 Uber rides to earn one free night, with an equivalent deferred loyalty rebate of 4%.
The rebate level is in the ballpark of consumer expectations for loyalty programs, but the reality of having to take 250 rides could squash some of the fun for SPG members. Also, remember that “everyday” points are awarded at just 1 per dollar.
While it’s important to understand the numbers behind the partnership (if you’re a consumer marketing executive) we’re not throwing cold water on this announcement. Most consumers will welcome this news with open arms and probably perceive this as a cool added benefit to being an SPG member and Uber rider without doing this “loyalty math”.
Most importantly, the concept behind Smart Partnerships is to create incremental ways to earn value in a loyalty program through patronage of multiple brands that fit well together. Similar to the higher earning velocity afforded by a multi-partner or coalition loyalty program, Smart Partnerships give consumers a path to rewards that is quicker than what one brand can offer alone.
I’ll be linking my SPG and Uber accounts today. Why not? How about you?
*Update: Here is what I received after linking my accounts.
