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Building Engagement Between Transactions When There Are No Transactions

When pandemic lockdowns took full effect in March 2020, almost every company selling to consumers had to become expert in building engagement between transactions. As restrictions for in-person interactions, travel and gathering in groups were repeatedly extended, the need for innovation became ever more acute as the timing of the next transaction became ever more in doubt.

The path to brand survival in a changing world relies on simultaneously keeping the memory of past brand experiences alive while demonstrating an understanding that the future will not be the same as the past.

Perhaps no industry better exemplified the challenge of bridging memory and future potential than travel and hospitality. The urgency of getting the emotional loyalty equation right was made clear when the monetary value of airline loyalty programs became visible during government relief discussions – the value of airline loyalty programs literally exceeds the value of the services airlines offer. That type of value is not something a cashback-based loyalty program normally accomplishes. For all the faults that critics level at airline and hotel programs, these major programs forged emotional connections with their members that continue to drive significant balance sheet value.

What are the strategic lessons these programs are employing that apply for all?

  • Keep the dream of the program rewards alive and real between transactions
  • Integrate into your members’ new normal at home or out
  • Create a warm digital connection when you cannot leverage an in-person human connection
  • Create and maintain a rationale for staying in touch

Here are some practical tactical examples of what programs did and continue to do to keep a human connection with their members.

Neva Ignatow, Director of AAdvantage® Co-Brand Partnerships at American Airlines, said it perfectly, “As people were at home switching their everyday spend to home improvement, the dream of travel was always back of mind. We had to stay top of mind with the many ways to earn [in American AAdvantage] for every day spend.” In essence – leverage top of wallet spend to keep your brand top of mind for the future. Most airline and hotel cards offered extra bonuses for grocery, take-out local dining, and home improvement spend. Bank issued travel cards did much the same. Many took a similar campaign approach as Hilton’s clean phrasing: “Earn now, travel later. Turn your daily purchases into future free nights. So, when the world is ready, you are too.”

New partnerships were also key to integrating into the home operating systems of members – Marriott partnered with local restaurants and Uber encouraging members to “Eat, ride, and stay your way to vacay.” Hilton partnered with Lyft to provide rides to vaccination sites.

Hilton found ways to explicitly link memories of their brand to their members’ lived reality at home by sharing recipes from multiple properties around the world – Viennese Mince Pies from The Waldorf London, Brownies from the Palmer House Chicago, and the world’s first mixed drink from the Roosevelt New Orleans. This was part of a weekly series of emails throughout the summer of 2020 called “Feel Good Fridays” that included feel good member stories and Hilton’s local community support initiatives.

Marriott expanded their long-running bedding catalogue into Marriott Bonvoy Boutiques including lounge furniture and room fragrances based on Marriott luxury brands – another way of linking memory to the present reality.

Affiliating with a charitable cause, community action, or environmental support also provides a way to connect with members and demonstrate a commitment to shared values in a context outside a transaction. For example, American Airlines celebrated Earth Day 2021 with an opportunity to donate miles to the National Park Foundation that extended through the month of May. Typically, members are more likely to participate in incentivized promotions where their donations earn them points or miles, rather than putting their personal rewards towards donations. Airlines tend to get more reward donations than other types of loyalty programs, but credit card and retail programs find members tend to feel they have a relationship with the brands that enable donations to causes that align with their values.

How well do these strategies work? In a recent earnings call Stephanie Linnartz, Marriott Group President, made the results clear: “The power of the Bonvoy platform has become even more evident during the pandemic, as many of our more than 147 million members have continued to interact with us in ways other than staying in our hotels…Global credit card spending on our cards for 2020 was down only 16% year-over-year, a marked contrast to the steeper [64%] decline in RevPAR (Revenue per available room)… Loyalty was a key piece of the equation, generating over $500 million of net cash flow in 2020.

 

How Airlines Make Billions From Monetizing Frequent Flyer Programs, JT Genter, Forbes, July 15, 2020, https://www.forbes.com/sites/advisor/2020/07/15/how-airlines-make-billions-from-monetizing-frequent-flyer-programs/?sh=a0b27d14e91c; How Loyalty Programs Are Saving US Airlines, Joanna Bailey, October 6, 2020, Simple Flying, https://simpleflying.com/how-loyalty-programs-are-saving-us-airlines/
Optimizing travel co-brand value propositions post-pandemic, Panel Discussion at AI Connects Co-brand & Travel Rewards Virtual Conference, April 28, 2021. https://youtu.be/Kqi3BeWcq6o
Marriott International, Inc. Q4 2020 Earnings Call, Stephanie Linnartz, Marriott Group President, February 3, 2021.
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Kate Hogenson