We talk a lot about loyalty in marketing, and act like it means something to the organization. Like perhaps the organization should be loyal to customers, as well as customers being loyal to the organization. [Stop laughing, I'm being serious here!]
This seems often to be a missing ingredient to me.
Two recent cases in point illustrate, and they are related even.
The CIBC Aerogold credit card was long considered a leading credit card in Canada. For years, it was the card to beat. The insight that helped competitors turn the corner was this: people were frustrated with points programs where the points could not be used for much of anything.
So TD and RBC among others, launched credit cards that accumulated points that translated directly to dollars, and could be spent on pretty much any form of travel. Both now provide travel services as well, through partnerships with Expedia and Travelocity.
The latest development is that CIBC VISA has lost exclusivity with Aeroplan, and TD will now be offering this an Aeroplan card as well.
Here's where the loyalty issue gets interesting to me. They sold me.
The deal made provided for sale / transfer of a portion of the portfolio. My account was on the list. So how much loyalty does this show? I fully understand that this was legal, and always a possibility under the terms of the contract.
CIBC sent me a boilerplate letter that could have been written by a machine. TD has now sent me a welcome letter and a little treat -- a free lounge pass. The implicit assumption is that my loyalty for 10+ years was to the product and the points, not the organization or the brand.
That certainly got me thinking about whether or not this product will serve me well in the future.
It starts to get more interesting for me when I look at my current challenges in using the points. I'm heading to Budapest for the AQR-QRCA Worldwide Conference on Qualitative Research in the spring. And tacking on a little vacation in London on the way home.
With all these Aeroplan points I've been accumulating, I thought I might be able to do something on this trip. Airfare was a non-starter, I'd need a ton more points to make this work. But I thought perhaps a hotel.
The Air Canada site lists 843 hotels in London that I can choose from if I want to spend real dollars. Wow, that's a lot of choice! That's when I thought of using my Aeroplan points to reserve with one of these. On the Aeroplan redemption site, I discovered to my horror and amazement that there are exactly 5 hotels available in London on points. (There was one in Budapest. ONE!)
Now for years, Aeroplan has been pushing the notion that a mile, or a point, is just like cash. Except it isn't. And for your loyalty to this program, you are rewarded by restrictions of all sorts. If you are paying cash, Aeroplan knows their customers have many different needs and price points. But if you are on points, it's all ha-ha, you lose.
Really, shouldn't I just buy a new iPad and forget the whole travel thing?
Well, that's a murky area too. If you are buying miles to make up a shortfall, I think you will be paying $.03 (3 cents) a mile.(Surprisingly hard to find this information on their site.) You are paying retail.
But if you are selling miles in exchange for goods like an iPad 2, for instance, you will be selling them at less than a penny a mile. You are selling wholesale.
A lot of this whole house of cards relies on a lack of transparency. Something we know people are deeply resentful about. It just feels kind of unfair, doesn't it. But that's the loyalty business today, it's anything but loyal if you are on the customer side of the equation.
I do wonder how long this approach is sustainable. It's all powered by the desire to get stuff for free, and I guess we are all guilty of that.
What do you think? Is the points game a house of cards? Or does no-one do the math?