Jeff Greenhouse

Experienced Marketing & Analytics Executive

1,795 miles from New York to Philadelphia

1,795 miles from New York to Philadelphia

Well, at least I didn't take that left turn in Albuquerque! If you look on a map, New York is only about 100 miles away from Philadelphia, but yesterday I traveled nearly 1,800 miles to get from that same point A to the same point B. It took up about 11 hours of my day. Why did I do it? I was 1,200 miles short of maintaining my Continental OnePass Elite status for next year. Why am I confessing to such a silly use of a Monday? Because there’s a great lesson here about the power of loyalty programs and every brand should understand it.

I a nutshell (which may be where I belong), I gave up a full day and paid for a useless ticket just so that I could continue to be entitled to extras and bonuses that cost Continental next-to-nothing. What’s more, now that I’ve done it, I’m likely to try to book every flight I take next year on Continental (and if not, at least an airline where miles cross over to my OnePass account). Basically, they own me.

This is a pretty high compliment to a branded loyalty program, and its something every brand should strive for. Here are the keys to unlocking this prize:

1. Make it something worth winning. The only way you’ll get someone excited about a rewards program is if the reward is something they really value. “Buy 20 sandwiches and get a free fountain drink” just won’t cut it. An important thing to realize is that there may be things the customer would value greatly that won’t cost you anything to give them. One of the big perks of frequent flyer status is priority boarding. It costs the airlines $0, but it’s valuable to those who receive it because it cuts down on stress and increases comfort. Try to think about the customer’s entire experience with your brand and see where you can give your “elite” extra value or special treatment.

2. Make it challenging, but achievable. If everybody is elite, then nobody is elite. Qualification for special treatment can’t be too easy to get, but it has to be within reach of a certain portion of the population. From what I’ve seen of the airplane boarding process, I’d guess that about 1/8 of the passengers on an average flight have reached one of the levels of elite status. I’m sure there are more who COULD qualify if they tried to, so for the sake of having a number to go with, let’s say that it should be something that 25% of your customer base COULD qualify for if they tried to.

3. Make it clearly visible. You can send out emails, mailers, gold-stamped invitation letters and other promotional materials till you’re blue in the face, but they won’t be nearly as effective as the simple experience of witnessing another customer getting a benefit that you are not allowed to get. Envy may be a sin, but it’s as common as the common cold. Think about how many times you see those elite frequent fliers flaunting their status in just a single flight? Express lanes at the ticket counter. Express lanes (sometimes) at the security checkpoint. Fancy clubs for the higher levels of status. Priority boarding with a nice big announcement while everybody else stands around waiting. People want it more when they see other people enjoying it.

4. Make it time sensitive. Urgency is a big motivator. If there’s no limited window for qualification, and no expiration date on the benefits, then there’s no sense of urgency. The card that gets me my tenth latte for free doesn’t give me any sense of urgency, so if I go to a different cafe today, all it does is push back my free drink by one visit. No big deal. Most loyalty programs work this way, and that’s a good thing. There are always more chances. They never toss you out in the cold. That works well for the base level of any program, but what I’m talking about in this post is that second layer. For that second layer you have to train the customers to think of you for EVERY visit, EVERY purchase. You have to give them a bit of the feeling that that one missed use could make all the difference.

5. String them along. That’s usually a negative phrase, but what I’m talking about here is setting up a qualification and benefit structure that overlaps to keep people active and invested. For example, when I hit the qualifying level for Elite status that first time, I immediately start enjoying the benefits, and that qualifies me to enjoy them for the next calendar year. That makes me more likely to fly Continental next year. By flying Continental next year, not only do I get used to the benefits (and therefore find myself more motivated to retain them), but I move closer to qualifying for the following year. The closer I get to qualifying for the following year, the more likely I am to stick with my loyal usage, finishing the cycle and pulling me into the next cycle of loyalty.

I slept well last night, secure in the knowledge that I’ll get my special treatment all through 2011. I’ve also got a pretty good idea about how I’ll qualify next year, WITHOUT taking a sightseeing tour of the Orlando International Airport.

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