Loyalty in the age of Coronavirus

These are tough times. Hospitals in some countries are overwhelmed. People are dying. Commodities are being hoarded. Share markets are crashing. Even safe haven assets like gold and Bitcoin are heading south.

It is certain that companies around the world are in the fight of their lives to survive, and some won’t make it. One thing is certain; those companies with a quality loyalty program and an engaged member base have a definite advantage, for several reasons:

Communications

A good quality member base means a good quality communications channel. While most companies use this during ‘normal’ times to sell more products and services and drive deeper engagement, in crisis times it can be used to communicate a clear message to members who are being bombarded with conflicting information.

Qantas Frequent Flyer have used their marketing database to educate members via an email titled ‘The facts about flying and Coronavirus.’ Qantas stress that ‘because of high cleaning standards and hospital-grade air filtration systems, the risk of catching a virus on an aircraft is low’. They also point out that ‘Inflight transmissions have not been a feature of this outbreak’. While Qantas face a tough 2020, their loyalty program allows them to get their message through, offsetting some of the anxiety faced by their members, and potentially encouraging more people to continue flying.

Hilton have also used their marketing database to communicate their response to Coronavirus. This includes increased frequency of cleaning public areas with hospital-grade disinfectant, the deployment of antibacterial hand sanitisers and the activation of a regional and global response team to act swiftly should they be alerted to a case of coronavirus at one of their properties. This communication will certainly help people feel more comfortable staying at Hilton hotels and resorts.

Support

Most loyalty program members have the expectation they will be treated well by their program provider. This includes priority support during crisis periods. For airlines and hotels, this means increasing the flexibility for booking changes and cancellations.

Qantas has announced that they are offering a one-time fee-free change for new international flight bookings made between 10 – 31 March 2020, for travel before 30 June 2020, as a way to provide flexibility to their members in these uncertain times.

Hilton have announced additional adjustments to their individual booking policies to give members extra peace of mind, including waiving change fees or offering full refunds in regions affected by government-issued travel restrictions, and the ability to change or cancel all bookings (even those marked “non-cancellable”).  While this may cost Hilton in the short-term, it will build goodwill with their member base, generating longer-term loyalty benefits.

Value-Protection

Many loyalty program premium tier members really value their status and the privileges which come with a Gold or Platinum card. With less travel comes the risk that many members will not earn enough status credits to maintain their status tier. This is bad for them, but also a risk for the airline and hotel, as it increases the likelihood that they may use the opportunity to move their loyalty to a competitor.

Hilton has addressed this issue by pausing the expiration of all points scheduled to expire by May 31, 2020 and announcing they will make updates to the requirements for earning tier status for 2021, with further details to be provided based on how the situation unfolds.

This decision will reinforce Hilton’s loyalty to their most loyal members, which will be returned as loyalty when the Coronavirus is contained and markets recover.

 —

A healthy loyalty program is a valuable asset for a business. It takes years to develop, and the return on investment may not always be obvious during boom times. But when a crisis of unprecedented proportions hits (roughly every 8-12 years), the value is obvious, and those companies without a strong loyalty program wish dearly they had one.

Philip Shelper is a loyalty management consultant based in Sydney, who obsesses about everything to do with loyalty and member engagement. His company, Loyalty & Reward Co are Australia’s leading loyalty consulting agency.

Phil and his team regularly write highly-opinionated articles about loyalty, which they post on www.rewardco.com.au

Phil is an Advisory Board member of the Australian Loyalty Association. In conjunction with the Founder and Chair of the Australian Loyalty Association, he teaches their Customer Engagement & Loyalty course, Australia’s leading course on loyalty strategy.

Let’s connect!

LinkedIn: https://au.linkedin.com/in/philipshelper

Twitter: @phil_shelper