Anyone who travels, let alone the hard-core road warriors, will be aware of the never-ending growth of the loyalty programmes that surround the travel industry.
I have a shoebox full of loyalty cards from schemes across the world, airlines, hotels, car hire et al offering me increasingly exclusive status. In reality the card is just a fancy bit of advertising reinforcement. They live in the box as in this digital age it didn’t take long to realise I never actually got the card out of my wallet, since details are stored online.
But over time these programmes have become victims of their own success. How do you evolve a tiered loyalty programme that has too many member signing up and diminishing one of the most important psychological aspects of such schemes – Exclusivity.
You’re so special!
There are good and bad example of how this is best handled. One option is to ratchet down the programme with expanded tier levels (i.e. make it harder to rise in the system), alternatively you can increase the number of tiers at the top or bottom of the programme, expanding the options for all while excluding none. I am a fan of the first option…depending on the brand.
if the goal is the increase the brand value and increase the return & spend amongst your best customers then increasing the perceived (or real) value of the programme by making it harder to rise through the tiers presses some deep emotional buttons with people. We all want to feel special and part of the elite. Not only attaining high status, but also reaping the rewards (upgrades, free stuff, pre-release notifications) is an excellent and proven way to motivate this target audience.
Conversely I am not a fan of just adding more tiers to the programme. As the title attests there are plenty of examples of loyalty programme levels that we might have seen (I could have added more: ‘Green’, ‘Bronze’ or ‘Elite’ are out there) but this smacks of a snap reaction to evolve a well-working programme. Not wanting to upset existing customers by making it harder to rise, as well as not wanting to give away too much perceived exclusivity too soon, had resulted in just adding levels at the top, and more common, the bottom of loyalty programmes.
I can appreciate why this might work if the programme was set-up initially as TOO exclusive, and TOO hard to rise, in that case yes create a catch-all level at the bottom to offer something of value, some brand bonding, and of course to get everyone on the ladder (read: capture CRM data and permissions).
It is not just the travel industry that has this problem. Credit Cards, stores, many other businesses have seen the advantages of having a well-managed loyalty and retention programme, with the obvious example of rampant programme evolution being the classic credit card schemes. Once it was rare and exclusive to own an American Express Platinum (or even Gold) card. Today anyone can get in the ‘club’ if they are willing to pay up front fees instead of the traditional route – being a high net earner/spender.
Bet on Black
Then there is the truly elite levels of these programmes, the creme de la creme. Often called the Black level these are a lot of fun for marketing folks to talk about as they offer examples of myth-turned-to-truth and how to market to the extremely wealthy (Spoiler Alert = word of mouth). There are two famous examples that highlight the value of such programmes, British Airways and American Express.
The AMEX Black Card (actually the Centurion Black card but most people don’t call it that, it isn’t as cool) was the stuff of legend, a credit card with NO credit limit. Want to buy a private jet on the spot? Fine, just use your AMEX Black Card. Yet it was literally just that, a legend, and it did not actually exist…but… American Express are great at loyalty programmes and so they did the smart thing – they created a Black Card to satisfy the rumours and feed the PR buzz that surrounded the story. Made from titanium, provided in a lacquered wood box, a near-limitless credit limit and a concierge service to do basically whatever you want. Plus extraordinaire kudos.
The other famous-but-not-famous example of Black Cards is British Airways’. The rumour (although it is a pretty sure thing they exist) is that BA run the same kind of programme as AMEX, an ultra-elite tier that is way beyond the publicly advertised top tier of Platinum. The idea is to reward those who control big corporate spend with BA (e.g. CEOs) or ‘friends’ of the airline (politicians, superstars, etc). There are supposed to only be around 200 in existence and you could never get one just by flying a great deal. The benefits include not having to go through customs or check in, they drive you straight to-and-from the plane President-style, everyone travelling with you is upgraded automatically to First Class and best of all they will hold the plane for you for a while if you are late (you are worth more to the airline than the fines and the rest of the passengers combined!) Now that’s literal VIP status.
The story has it that BA want to maintain the extreme exclusivity by NOT advertising or even acknowledging they exist. But you clearly need to spend an extraordinary amount of money per year with AMEX, British Airways (and all the others I am not important enough/too poor to have even heard of) to get offered a Black Card – there is no advertising, promotion, website or application form. You have to just spend spend spend. There are stories of people giving AMEX cards, on their account, to all their friend and family to get them to spend enough to be offered Black.
Word of mouth is widely known as the best of all mediums for marketing, and this is clearly the way to push such programmes, these elite customers have access to other such individuals that no company could acquire easily. Assuming the BA Black programme does exist their strategy is fascinating as it requires their customers to NOT talk about the programme.
Do you have any other stories of ultra-level loyalty programmes? Please leave a comment and let us know. Unless of course you are not supposed to talk about it.
PS: While researching this I came across (quite old) forums discussing an even more exclusive ‘AMEX Crystal’ card, as too many people are starting to have Black cards.
Footnote: Having written this and looking around for some useful images I came across this excellent piece by the esteemed Mark Ritson over at Marketing magazine talking about, well, the exact same thing.