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More Redemption Choices Critical for Travelers’ Customer Loyalty

When Loyalty360 talked to Christopher Barnard, president at Points.com, last year about the future of customer loyalty, his definitive response was: Flexibility.

“Flexibility in where rewards are earned and how they are spent,” Barnard said at the time. “Flexibility in trading and exchanging rewards between programs in different industries. And flexibility in accessing and interacting with loyalty rewards on any device, at any time. Loyalty currency is only as valuable as it is accessible so, as the ubiquity of loyalty increases, so will the engagement of program members.”

Barnard’s comments pertaining to flexibility ring true in a new survey from Collinson Latitude that says today’s travelers demand more redemption choices to secure their customer loyalty. The survey of 1,000 airline and hotel loyalty program members across the U.S. reveals that most travelers expect greater choice and flexibility in how they redeem their loyalty currency.

What’s more, 68 percent of loyalty program members are looking for more choice of rewards besides the traditional offerings of flights and hotels. Nearly half (45 percent) described redemption programs only offering these rewards as ‘dated’ and ‘old fashioned’.

Now in its second year, The Value of Redemption survey showcases the particular value of a broader redemption proposition for both inactive, as well as those members living outside of the program’s core domestic market.
For example:

  • Non-core rewards drive re-engagement: Non-core rewards are very powerful in winning back customers who haven’t purchased from a brand for some time (three months); of the 1 in 2 (48 percent) of members who had reported that a redemption had driven a re-engagement with their program, 58 percent of members had redeemed on non-core inventory in comparison to 43 percent who had redeemed on core inventory.
  • Non-core inventory redemption is important for members with a global footprint – Non-core inventory is more regularly redeemed than core inventory by members who were part of a program not based in their home region. Nearly a third (31 percent) of these members regularly redeem on non-core inventory, as opposed to 18 percent of members who regularly redeem on core items.
 
“It’s fascinating to see the correlation and added value that greater choice of rewards and non-core inventory has within loyalty redemption and on a travel brand’s bottom line,” said Madeline Van Wilderen, head of commercial partnerships at Flying Blue. “Giving our customers greater choice on what they can spend (redeem) their points on and how they pay, is a key priority for our program which, in turn, keeps members engaged and loyal. The insight here of how non-core inventory can reactivate members is certainly consistent with what we have seen for our members living outside of key hubs. We are delighted to be able to support all our members and help them get value from our program wherever they live.”

What’s more, the study reveals that more than half of members (55 percent of airline and 57 percent of hotel loyalty program members) would like to be able to redeem their points in retail outlets and 40 percent agree (42 percent of airline and 37 percent of hotel members) that the value of a loyalty program decreases if they cannot redeem their points in-store. This highlights that increased choice is a key requirement to drive engagement for travel loyalty program members globally.

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