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[Research] … “Burning drives earning”: the importance of choice in rewards .. Collinson Latitude

by on March 22, 2016 in Latest News, Lead Article, Lead story, News you can use, Nuggets, Retail, Retail News

New global research of 2,250 airline and hotel loyalty programme members across the US, UK, Middle East and Asia, indicates that an increased choice of rewards generates a more positive redemption experience, increased loyalty and future revenue generation (points earning).

The survey by @C_Latitude was undertaken to better understand the impact of redemption stores on loyalty programme members. How they impact upon the member user experience, engagement levels and to evaluate the true extent to which ‘burning drives earning’.

The impact of providing choice of rewards outside of typical flight, room and upgrade inventory (core inventory) on earning behaviour was compelling. In fact, 77% of members continued to spend with the brand and earn further points following a redemption on non-core inventory. This was 6% higher than those who redeemed on core inventory (flights and hotels) alone; a clear indication that both ‘burning’ does ‘drive earning’ and that non-core rewards accelerate the levels of earning, and are therefore a crucial component of a redemption proposition.

More Choice of Rewards Make a Difference

The availability of a broader choice of rewards is also a key factor when choosing which programme to join. In fact, six in ten (61%) of travel loyalty programme members specifically look for programmes with more choice of rewards, and for over seven in ten (71%), the value of a loyalty programme decreases if it offers a limited range of rewards.  Almost half (42%) believe that programmes offering only core inventory rewards (flights, hotel rooms) are “dated and old-fashioned”.

What is clear from the data is that members want more choice of rewards in their redemption programme. When the breadth of rewards is expanded (beyond the core product offerings of flights and hotel stays) we see that member loyalty and spending (earning) increases.

This is the ROI that travel brands crave”, commented Guy Deslandes, E-Commerce Sales Director at Collinson Latitude.

A Good Experience Drives Member Advocacy

The study also showed that if members enjoyed their redemption experience, it could turn them into powerful brand advocates: 40% of members would tell friends and family about a programme following a positive redemption experience, while 33% would actively encourage them to join the programme. Both are at higher levels than industry norms for advocacy.

Deslandes concluded: “If travel brands can get this right, providing greater choice of redemption options, especially those outside of typical flights and hotels will not only increase ROI directly from members, but their members will also drive further value and engagement through advocacy. This is a very compelling combination – making this an opportunity travel brands do not want to miss”.

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