Decoding What it Takes to Build Successful Loyalty Programs

By Damien Pfirsch, Chief Commercial Officer, Agoda

SINGAPORE, May 11, 2023 /PRNewswire/ -- 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.

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's Next 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.

As CCO of Agoda, Damien's responsibilities include leading the Rocket Travel by Agoda business unit which provides the technical expertise to offer partner-branded travel experiences with an emphasis on rewards and loyalty.  Working with partners, we ensure travelers get the most value and delight when planning their getaways by incentivizing consumers to secure thousands more miles, gift cards, or additional discounts just by booking through the partner-brand portals.