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Today, consumers have grown used to loyalty programs and they have become the norm.
So, to keep their customers’ interest, businesses have been forced to become more innovative and creative with their rewards. In fact, experiential rewards which transcend simple discounts or free services are very much on the rise.
As loyalty programs seek to further entice members to focus on gaining points towards rewards these members desire, a new trend is developing … and the interesting part is that those rewards are products and services at other businesses!
While this may seem counterproductive to the foundational goal of a loyalty program – keeping customers loyal to your product -- it’s quite clever. It’s also not that new, it’s just expanded beyond magazine subscriptions and such. Now, many global brands have teamed up with the retail behemoth Amazon, allowing customers to use loyalty program points to purchase items.
Two large brands I know off recently partnered with Amazon: Hilton Honors and American Express. Both have strong loyal customer bases. Hilton loyalists tend to stay at Hilton hotels exclusively, so they can earn points – like frequent fliers -- who tend to choose a single airline. Points are more valuable – and rewards easier to earn – when they aren’t spread thin across many retailers.
Why then, would Hilton and American Express choose to partner with Amazon, allowing customers to utilize their earned loyalty points as currency on the retail giants site?
Because Amazon has EVERYTHING. Think about it. In the past, a customer with a bunch of Hilton points could only look forward to someday utilizing those points for a future hotel stay. And, customers with the most points are mainly business travelers. Their companies pay for travel, which reduces enticing rewards to just personal vacations.
Businesses have the challenge of keeping rewards fresh, interesting and desirable to their customers. By partnering with Amazon, allowing members to utilize points on the site, they literally transform available loyalty rewards into anything a customer desires! And, the biggest benefit of this is that the loyalty rewards offered will always be attractive to the program’s members!
While some members may choose to use their points towards Amazon purchases, others will continue to use them in the more traditional way (such as towards future hotel stays in the Hilton).
Either way, the consumer is motivated to continue their loyalty with the original business. While also excited and motivated to earn loyalty points. Seems like a win-win-win in my book -- for the brands that have implemented this, their customers and, of course, Amazon.