In 2015, Wyndham took a bold stance on loyalty within the travel and hospitality industry when they rejuvenated their award-winning Wyndham Rewards program. In an effort to better align with “the everyday traveler”, Wyndham disavowed multiple-tier redemption strategies and proposed a single 15,000 point objective to be used for any of their brands. In Wyndham’s perspective, the enormous value that this created for consumers was a key benefit to encourage participation: it meant that rewards earned from budget brands could be leveraged for free nights at premium properties. Further, the single-tier format gave customers a clear, simplified goal.
Wyndham Rewards recipe for success
It all seemed like a surefooted recipe for success. And yet, four years later, Wyndham has announced that it is rolling back the initiative. Starting April 3rd, the company will be reverting back to a multi-tiered redemption model that offers rewards starting at 7,500 points, escalating through to 30,000. There will also be opportunities for consumers to append their points totals with cash when redeeming rewards.
Where does the customer fit into Wyndham’s picture? Their initial vision for the “everyday traveler” was a program entrenched with easy-to-use features and a minimalist engagement strategy. The hitch: it turns out this wasn’t exactly what their customer wanted after all.
“Seventy percent of members and prospective members we surveyed said they preferred multiple redemption tiers,” says Eliot Hamlisch, senior vice president of global loyalty and partnerships at Wyndham Hotels & Resorts.
The hard truth is that the customers' demands which brands try to anticipate can be very different from what customers actually desire for themselves, thus creating a formula for miscommunication and flawed targeting. In an effort to correct their interpretation of their customers’ needs and wants, the company conducted expansive online surveys of their Wyndham Rewards members. What key learnings can be taken away from Wyndham’s efforts?
Customers want attainability
People have to be excited by rewards, but excitement alone is only part of the picture. Customers have to understand that loyalty objectives are attainable for them, which is a large part of why tiered-programs are attractive in the first place. “While having a single redemption tier is very simple and easy to understand, 15,000 points isn’t always attainable for all of our members."
Customers want to feel included
Wyndham’s new program structure means customers with fewer point balances can still participate in reward redemption. But how is Wyndham ensuring that their elite members don’t feel like the new design curtails their own interests? The solution lies in an “accelerated earn” feature, allowing members with more points to earn incrementally more depending on their status rank. Gold members will now earn 10 percent more, Platinum members earn 15 percent more, and Diamond members earn 20 percent more.
Complexity must be balanced with flexibility
The updated program aims to fit the perfect niche in program navigability while still maintaining enough features to offer flexibility. “Other competitors have six to seven or eight tiers”, claims Hamlisch, in contrast to Wyndham Rewards three. Of course, however many tiers a program should ideally have all depends on what makes sense for an individual customer segment. But for Wyndham, three might very well be the magic number.
Lanndon Lindsay is a reporter for The Wise Marketer.