1 Reply Latest reply: Jul 24, 2009 11:11 PM by tjcnewyork RSS

creating loyalty value

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Shaun Rein, writing about the UAL frequent flier program and its problem, for Forbes, comments:

 

"Consumers are more price sensitive in this economy, and they are trading down, but it's still a great time to capture loyalty. People don't want to waste money on brands that fail to meet their expectations. They're buying only what they trust, and they'll return to trusted brands repeatedly.

 

Instead of watering down its frequent flyer benefits to save costs, United should be taking the exact opposite tack. It should take a page from hotel stalwarts like Starwood ( HOT -news people ) and Marriott ( MAR - news people ), which are offering more goodies than before to their most loyal clients.

 

In consumer studies that my organization, China Market Research Group, has conducted, we've found that the No. 1 reason people fly United regularly is because they have racked up points in United's Star Alliance loyalty program. Why would United want to disenfranchise its most loyal customers?

 

As consumers think harder about where to spend their money, aiming to satisfy them is not enough. Only striving to create true loyalty will work."

(For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: creating loyalty value
    tjcnewyork Platinum
    Currently Being Moderated

    "They're buying only what they trust, and they'll return to trusted brands repeatedly."

     

    Great quote.  I think Shaun Rein is spot-on.  Drawing upon the 2nd Qtr Earning Reports*, do you see any parallels that apply to the Marriott brands?  For example, North American Limited-Service brands are down 12% compared to North American Full-Service at 17% and Luxury at 20%. (see p13, Earning Reports)

     

    Is price sensitivity shifting guests from luxury and full-service to limited-service?  Or is the devaluation of rewards points, curtailment of services such as Concierge Lounges closing, restaurants closing, cessation of BF vouchers, extra charges for internet access and reduction of Elite upgrade benefits compelling a shift in loyalty to the limited-service brands?

     

    * Earning Reports 

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

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