May 19, 2023

Decoding What It Takes To Build Successful Loyalty Programs

Damien Pfirsch

In an environment where, according to a US based survey, (Statistia, 2022), consumers are enrolled in an average of 16.6 loyalty programs, how do brands build affinity and, well, loyalty? Consumers are savvy - often seeking ways to earn points and burn points through value-add loyalty schemes, and companies need to provide a solution that attracts and retains their customers – in a way that makes good business sense for them. Easily said, but not so easily done.

Loyalty programs are steeped in traditional marketing practices, but the rules of engagement have significantly evolved over time. We have come a long way from collecting copper coins and stamps but the premise of offering discounts or added value by collecting points to redeem continues. Aviation, hotels, coffee shops, telcos and financial services providers – credit cards and banks - now all offer loyalty programs, and they get more sophisticated every day. How brands stay on top of these changes and use tech expertise too is what is changing as big organizations look for swift solutions to get them to market faster and at the same time have a program tailored to the brands' needs.

The key to building a best-in-class loyalty program is personalized rewards powered by agile and scalable technology. Customized platforms with the look and feel of the brand, with the added advantage of expert back-end tech support. To accelerate to market, financial institution brands, airlines like ANA, American Airlines, partner with loyalty and tech experts like the Rocket Travel by Agoda team who provide the technical know-how and agility without large outlays of building in-house tech teams from scratch. This agility, combined with access to a large accommodations, flights and activities inventory, end-to-end support - from building, managing and continuously optimizing portals for brands, to real-time analytics and reporting and an ability to scale are key components of a successful loyalty platform

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Loyalty programs can often fail when they don't offer customization of the program and the personalization offered to the brand's consumers. As this point from McKinsey'sNext in Personalization 2021 Report illustrates "Seventy-one percent of consumers expect companies to deliver personalized interactions. And seventy-six percent get frustrated when this doesn't happen." For example, an airline may offer benefits and perks for its loyalty program subscribers such as lounge access, priority boarding, and extra baggage allowance. Similarly, a bank might offer free concierge services, free breakfast, or late check-outs at its partner hotels to its loyalty members.

Being able to power a loyalty program that makes every consumer feel unique, that provides data-led insights into what rewards appeal to consumers and provides consumer delight, is essential for connecting and building brand loyalty. The ability to earn points, and 'burn' spend points on travel on the same or other platforms captivates the consumer and is the original purpose of loyalty programs.

Increasingly, more brands across multiple sectors are turning to white-label experts for agile, customized solutions to enrich consumer interaction with the brand. Such solutions help brands expedite their go-to-market strategy, build consumer relevance, and stand out in a crowd of loyalty initiatives.

In-depth consumer journeys drive engagement throughout every phase of the customer lifecycle. A robust suite of transactional emails ensure customers have all the information needed at their fingertips from booking, to check-in, and post-trip. Dynamic cross-sell strategies allow us to drive high attach rates with other travel products offered by our partners, generating incremental bookings and boosting the value of each trip, and abandoned search and welcome series ensures customers understand the value of our partners’ travel platforms and stay loyal to our partners’ brands.

Personalized content leveraged throughout our emails, delivering a unique experience for the consumer. Our personalized email communications ensure each customer has all the information they need throughout their travels, easy ways to contact our customer loyalty team for assistance, and suggest travel destinations based on their personal travel preferences. This adds a level of convenience to the consumer experience and drives engagement with our partners’ brands.

Utilizing AI is quickly becoming a cornerstone of email marketing. Using artificial intelligence allows our marketing teams to quickly drive innovation through A/B experimentation. In testing, we have found it to be very effective at driving results and are developing new ways to leverage this emerging technology as email marketing services continue to expand.

Segmenting audiences based on previous engagement data to deliver new messages to the customer and drive continued engagement with our white label platforms.

Robust reporting enables us to continually optimize the performance of our campaigns, and keep partners informed of success and areas of opportunity at every phase of a partnership.

About the author

Damien Pfirsch, Chief Commercial Officer, is responsible for leading the Rocket Travel by Agoda efforts in building strategic relationships with stakeholders across a diverse range of verticals. He oversees Strategic Partnerships, Key Accounts and Government Affairs at Agoda. In his role, Damien develops product driven partnerships to create long term values for both parties and leads agile sales teams in accelerating go-to-market initiatives.