In the digital age, how do you retain your customer’s loyalty when your fiercest competition is only a click away? Marriott International, which has the world’s largest loyalty program, finds that the best way to deepen loyalty is through unique experiences. I recently had the opportunity to speak with David Flueck, Senior Vice President of Global Loyalty at Marriott, and you can watch the full interview on YouTube.
A Brief History Lesson on Loyalty Programs
Loyalty has been around since the late 1800’s when grocery stores used to give out S&H Green Stamps to encourage repeat shopper visits. After the deregulation of the airline industry, carriers used mileage programs to woo the flying public to stick with them. Hotel chains rewarded customers with free hotel stays, and it wasn’t long before the credit card companies jumped into the loyalty game.
The success of these programs, however, had an unintended consequence: consumers began to expect them. As loyalty programs became a standard operating procedure, they started to lose their ability to do what they were designed to do (i.e. maintain customer loyalty). After all, if every brand is offering roughly the same program, points and miles become more of an expected secondary transactional currency instead of a unique program designed to keep customers loyal.
Brands were forced to rethink their loyalty programs. For example, United created loyalty tiers that determined who boarded the aircraft first, who got to check their bags for free and prioritized who would get upgraded to first class seats. While these perks were certainly appealing and drove the loyalty of their top customers, United ended up alienating and frustrating many of their core customers by making them feel like second-class citizens.
To avoid alienating its customers, Marriott did something quite different and it has been working very well.
Marriott Rewards: Truly Unique Experiences Deepen Customer Loyalty
Marriott took stock of what it uniquely could offer its customers. Sure, they still give away free night stays and provide a separate front desk line to help speed along their best customers through the check-in and check-out process. But none of this was unique to Marriott and they needed something else that would be both memorable and encourage word of mouth support from their best customers.
“Nowadays, the new generation very much values experiences over material things,” says Flueck. “Loyalty programs, to some extent, have been reflecting that. Loyalty programs have moved from being points programs to really being full experience programs meant to drive true emotional loyalty.”
Chef Daniel Boulud is a world famous chef operating out of New York City. For foodies seeking unique culinary experiences, he delivers in spades. Marriott saw an opportunity to allow its guests a unique opportunity to stand shoulder-to-shoulder with Chef Daniel Boulud and prepare one of his famous meals. This is the culinary equivalent of getting a basketball lesson from Michael Jordan or guitar lessons from Keith Richards.
Understanding the Concept of Merit Badging
The Millennial generation in particular value experiences over stuff. This macro-trend is called Merit Badging as Millennials seek to collect unique experiences the way many Baby Boomers tend to collect stuff such as rare coins, stamps or Hummel figurines.
How Unique Experiences Deepen The Loyalty Of Your Best Customers
Regardless of the age and generation of your target audience, unique experiences also have the distinct advantage of providing highly sharable social media content and trackable word of mouth marketing support. The more your customers share their unique experiences with your brand, the more of their peers covet similar experiences for themselves. This delivers the desired result of encouraging new customers to both buy from you and join your loyalty program.
“They say if you can’t post it, then it didn’t happen,” acknowledges Flueck. “If you want to be able to post amazing experiences, then there’s really no better place to do it than in our two [loyalty] programs. And we’ve really brought that to light with our Moments experience platform.”
For example, earlier this year Marriott hosted a members-only event with Imagine Dragons in Bangkok. Flueck says this was a brag-worthy experience perfect for sharing on social media.
So the next time you’re thinking about ways to reward your customers’ loyalty, consider what kind of meaningful experiences you can deliver. If it’s something they are likely to share on social media, you’re not just making a big impression on your customers, but you are also empowering them to help you attract even more customers. And that’s why today’s loyalty programs are more experience focused rather than optimized to deliver more stuff.