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New Loyalty Value Playbook by Rocket Travel by Agoda

In a rapidly evolving travel landscape, Rocket Travel by Agoda has unveiled its 'Loyalty Value Playbook,' aimed at aiding travel brands in reshaping their loyalty programs. As consumer expectations continue to shift, traditional loyalty models are increasingly perceived as outdated and misaligned with the desires of today's travelers. A collaborative effort with Skift, this new guide provides a framework for brands to address the widening value gap—the divergence between what customers want and what is currently offered.

The report, titled 'The Loyalty Value Playbook: Redemption Experience and Cash Spend as the New Benchmarks for Customer Growth,' highlights critical findings that are reshaping the loyalty industry. It reveals that 77% of consumers are more inclined to abandon loyalty programs than they were just three years ago—an alarming trend for brands that fail to offer compelling, transparent, and user-friendly experiences.

The Key Components of the Playbook

Rocket Travel has crafted this guide based on thorough research, case studies, and interviews with industry leaders from notable organizations like Flying Blue, Citigroup, and Southwest Airlines. The playbook emphasizes six essential capabilities that bolster loyalty programs:

1. Flexible Commerce Infrastructure: Modernizing checkouts to include features such as real-time point balances and instant confirmations. This aligns loyalty programs with current e-commerce expectations, allowing for points-plus-cash transactions to enhance customer satisfaction.

2. Data and Personalization Engine: Utilizing AI and guest behavior data to provide personalized recommendations that elevate both redemption values and booking conversions.

3. Partner and Inventory Strategy: Expanding inventory of premium rooms and experiences, accompanied by competitive pricing and exclusive perks such as flexible check-in and check-out options.

4. Marketing Technology and Customer Journey Optimization: Minimizing point breakage through lifecycle messaging that clearly communicates value to encourage repeat cash bookings.

5. Governance and Controls: Establishing dynamic pricing strategies with transparent rules to build trust with guests and reduce complaints about perceived unfairness.

6. Cross-Functional Collaboration: Encouraging cooperation among loyalty, operations, and data teams to enhance metrics such as repeat cash bookings and customer lifetime value.

Understanding the Modern Traveler

The primary aim of this playbook is to help brands better understand and navigate the changing landscape of loyalty. Data from Antavo’s Global Customer Loyalty Report indicates that only about 50% of earned loyalty points are redeemed, and a staggering 43% of customers have ceased participation in loyalty schemes due to prolonged reward earning times. This information is crucial for brands looking to avoid revenue losses tied to outdated loyalty strategies.

Damien Pfirsch, the Chief Commercial Officer for Rocket Travel, stresses that as traveler expectations grow, loyalty programs need to evolve beyond traditional structures. He asserts that loyalty is not just about maintaining old benefits; instead, brands need to expand their offerings to meet customers' modern desires. The playbook serves as a roadmap for rebuilding trust while enhancing both point redemptions and cash bookings, vital for maintaining and attracting customers.

“With this guide, travel brands are better equipped to meet the nuanced demands of today's consumers,” Pfirsch states, “focusing on flexibility and relevance will strengthen guest relationships and drive loyalty in an increasingly competitive market.”

The Shift Towards Personalized Loyalty

Chris Besendorfer, Managing Director of Citi Travel Rewards, notes that cardholders today are looking for loyalty programs that add value not only during significant travel experiences but also in their daily lives. Customers want flexibility in how and when they redeem points, emphasizing the need for everyday usability.

Jonathon Clarkson, Vice President at Southwest Airlines, reinforces this viewpoint, encouraging brands to prioritize customer-centric approaches to loyalty. He advises brands to constantly evaluate what their customers value and extend those benefits not just within travel but also into broader lifestyle contexts.

By leveraging its wealth of industry knowledge, Rocket Travel by Agoda focuses on crafting advanced loyalty programs that resonate with customers’ needs, develop loyalty, and foster sustainable business growth. Companies that implement the strategies outlined in the Loyalty Value Playbook will not only build memorable customer experiences but will also enhance their standing in a rapidly changing travel economy. As brands adopt personalized offerings, they will ignite lasting relationships and success in the market.

To explore the full framework, download the complete report from Rocket Travel by Agoda.