When you hear the term Loyalty Program, what do you think? I’d imagine that images of a program that rewards you for being a loyal customer, right? I mean that’s the definition of loyal.
Loyal – faithful to a cause, ideal, custom, institution, or product
But let’s be honest. Do programs really reward us for being loyal anymore?
If they did, they’d reward us for all the times we’re loyal to the brand. Nowadays, loyalty is only rewarded if it’s under the terms of the program.
Basic Economy Restrictions
We’ll use the airline’s basic economy as an example. If you’re a loyal flyer with an airline, you’re going to have some form of status. You’d think that would give you some sort of perks when flying on that airline, right?
To earn American Airlines Executive Platinum status, you need to fly either 100,000 miles or take 120 flight segments and spend over $15,000. These are the most loyal of the American flyers. They get complimentary same-day stand-by and flight changes, complimentary upgrades on all flights or at least complimentary or discounted preferred or Main Cabin Extra seats. That is, unless they purchase a basic economy ticket.
Basic Economy fares aren’t eligible for upgrades, complimentary/discounted Preferred or Main Cabin Extra seats, Same Day Standby or Same Day Confirmed Flight Change.
Unless you pay for the ticket American wants you to buy, you don’t get any of the benefits that you’ve earned by being loyal to them with your money and your travels.
American’s not alone. Delta and United also restrict the benefits of even their most frequent flyers if you purchase a ticket in basic economy.
Airlines have definitely gone with the stick approach when trying to change the behaviors of their frequent flyers. If you buy a basic economy ticket, suffer the consequences.
Other programs have decided to try the carrot approach. They offer extra awards if you change your behavior.
IHG Rewards Club
The best program at doing this is IHG Rewards Club and their Accelerate promotions. Each member has an individualized bonus that’s based on your past activities. For example, I have an IHG credit card but I rarely use it to pay for my IHG stays. One of my tasks is usually to use my card for 1 or 2 hotel stays. Same goes for buying bonus point packages. I don’t usually do this but I might consider it if the reward was high enough.
Since we usually stick to one or two IHG brands, I’ll have an offer for bonus points to stay at three different IHG brands. They’re rewarding me for going outside my normal travel habits but the request isn’t that out of the ordinary that I wouldn’t consider it.
However, if someone like me, who stays at IHG hotels around the U.S., were to receive an offer that only rewards me if I stay for three times in China, Thailand or Indonesia, that would be a pretty useless promotion. I’d probably delete it the moment I read it because there’s absolutely no chance of me ever completing the requirement to receive the bonus.
Someone tell this to the people running the Starbucks Rewards program.
The loyalty program that tries to alter its members’ behavior the most is Starbucks. This is a typical offer I receive from them:
They know me. They know I NEVER stop by a Starbucks after 2 p.m. So why do they keep sending me offers for me to come in the afternoon? Because I don’t come in the afternoon and they want me to. And why do they want me some several days in a row? Because I only stop at Starbucks on my way to work and I hardly ever work more than three mornings in a row. When I’m home, I’m 100% more likely to make the good coffee I have at the house than I am to drive to Starbucks for coffee.
Almost all of the bonus offers I receive from Starbucks are totally useless for me. To go out of my way to earn 125 bonus stars, that’s not even enough for an iced coffee under the new redemption rules and definitely not worth my time.
Come to think of it, there aren’t a whole lot of programs that truly reward loyalty. The hotels tend to be the best at it, with their promotions that offer extra points for multiple stays. But even those bonuses will be based on either the number of stays or the number of nights. If you’re on the road at a single location for a week at a time, a promotion that gives bonuses based solely on the number of stays is not as valuable to you as one that would reward the number of nights you stay.
More and more, loyalty (or should we start calling them incentive) programs no longer reward loyalty in the true sense of the definition. They only give rewards when you act the way they want you to. Depending on the program, this may be through incentives for good behavior or punishment for not acting the way they want you to.
And to me, that’s not loyalty.
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This post first appeared on Your Mileage May Vary