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.

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.

Data driven marketing programs which unite tangible rewards and special benefits are meant to change behavior. And the outcome of the behavior change should render a business benefit for the company sponsoring the program and create feelings of affinity and goodwill from the people whose behavior changed towards the sponsoring outfit.

Practitioners call the resulting schema a Loyalty Program. if you prefer, you can call it a Rewards Program, Incentive Program, or Sales Performance Program. The name is less important than the definition. You could call it a “mileage give-away program” and I wouldn’t care (though that is a really awkward name that will not win you any awards).

I would care greatly if you commence the slide down the loyalty slippery slope by allowing “margin cannibalization” to sap confidence from your mission or think you can offer rewards to customers which you engineer to be unredeemable, whether through program rules or by the reward structure itself. These are characteristics of poorly designed programs, not the genre itself.

The days are gone when any customer will be tricked, bribed, or tempted into any behavior change that will benefit your business long enough to reach annual targets. Short term promotions meant to trigger impulse purchases or to shift share from a competitor will have effect until the promotion expires.

If you are content to string together multiple promotions, discounts, rebates, and give-aways and call it a marketing strategy, then you will find yourself running on a treadmill without a pause button. Stop the promos & you risk losing revenues and market share.

Successful loyalty programs are being more tightly integrated into Customer Experience than ever. If you can establish an in-store relationship worth preserving in the eyes of your customer, you can reinforce it with the loyalty program and leverage it to achieve multiple business objectives including acquisition, cross-sell, and retention. Without this integration, you risk the loyalty program being evaluated as a subset of price and more easily tossed aside as the result of a poor service interaction.

Some customers want to talk to you, others don’t. A well structured and executed Loyalty program provides the platform for the boisterous to become advocates and the shy to at least voice an opinion. Why pay money for a research panel when you can solicit candid opinions from those who are interacting with you and a have a factual basis for their praise or criticism? Surveying those whose level of interaction can’t be documented quantitatively is a gauge of brand awareness but not much more.

Put on your consumer hat. You will come to understand that Loyalty Programs should not recklessly collect data and let it sit idle or be used to support invasive marketing. Loyalty done right encourages behaviors which are profitable for the business and positive for the consumer. If any behaviors encouraged are harmful or have negative impact on the customer, throw it out of your offer matrix.

As we redefine Loyalty, we should take the high road. Agreement on business objectives is the right starting point, and filtering behavior change with your customer hat on will lead to value proposition creation that will stand the test of time.

You’ll notice that I have said nothing here of points or financial liability. That’s because Loyalty 201 can be executed using tangible benefits beyond points, and new avenues of cost-sharing are being explored every day to keep ROI in the conversation.

Walk yourself through the tenets of Loyalty 201 above and, if your program varies in one or more areas, consider it time for some tweaking if not a redesign.

It’s so simple. As the Good Book says, “wide is the road that leads to destruction, but small is the gate and narrow the road that leads to life (for this metaphor, success with your customers). Scripture also says of the narrow gate that “only a few find it” – that doesn’t have to be the case in Loyalty Marketing.