I’m not fond of waffling but the answer is maybe and it depends.
Genuinely wealthy people may care about loyalty programs the way we understand them. They care about space, comfort, peace and quiet, service, privacy, excellence, quality, exclusivity, convenience … stuff like that. Of course, if you deliver on all those elements, you’ve already got a great loyalty program anyway.
The other night I was having dinner with some friends at the Bal Harbour shopping mall – it’s really called The Bal Harbour Shops. It was Fashion Night and a fund-raiser for the Miami Project to Cure Paralysis.
We were sitting at an outside table watching waves of people pour through the front doors. A gang of insane-driver valets parked cars, some that cost as much as a nice apartment and some Corollas, Chevvies and Fords.
As we watched people stand in line for a goody bag containing nothing but two small samples of a new high energy drink, we wondered if they’d ever drink them or just toss them before they got home. Maybe it was just the idea of getting something for free. Or, much more likely, maybe most of those people weren’t high-end customers at all. Maybe they were wanna-bes.
A headline in today’s Wall Street Journal reads: “Ritz Hotels Bow to Slump, Adding a Loyalty Program”. The article mentioned a decline in how much consumers will pay for luxury hotels. So Ritz Carlton is joining the ranks of other hotels, airlines, sandwich shops and my local nail salon in offering a loyalty program.
Ritz had always quoted its President as saying, “We’re not going to give you a toaster, we’re going to give you service”. I guess he changed his mind, because:
1. Their sister brands (Marriot’s Courtyard and Fairfield Inns) already offer points programs, so their administration systems must already be set up.
2. Booking expensive hotels for corporate business has become “frowned upon” in these uncertain times.
3. So maybe, just maybe, a frequent guest program will attract more business and leisure travelers to Ritz.
What’s the program? Twenty nights @ $300 a night will earn you one or two free nights at a Ritz, or 10 nights at Fairfield Inns or Marriotts.
In other words, spend $6,000 and get a free night at the Ritz or a lot of free nights at a hotel you wouldn’t stay in anyway. I hope it works for them.
I’ve always thought that the real loyalty to luxury brands comes from the long list of exceptional components that make them luxury brands in the first place, extra things that are built into the fabric of their brand. Sometimes they’re little things, like the note a Nordstrom saleswoman sent me last week asking how I liked my new handbag.
Are you planning to grow your loyalty initiatives? The LTV (Lifetime Value) of a current frequent customer always outweighs the potential of even several potential and occasional customers, so maybe a deeper loyalty program will work for you. And maybe the consistently perfect delivery on your brand’s promise will work even better.
Please tell me your favorite brand loyalty story here…and comment. And, thank you!