Loyalty: Allegiance, fidelity; a sense of duty or of devoted attachment to something or someone.
Brand loyalty: it’s the Holy Grail that companies strive for. Businesses invest untold amounts of money, time and effort in customer satisfaction studies and the perks and incentives to draw repeat customers who will not only come back over and over, but will also provide that most valuable form of advertising – sincere enthusiastic word of mouth recommendations – that is most effective in luring others in. And then once the relationship is firmly established, much like an abusive spouse who has wooed the object of his/her affection with showers of compliments and kisses and over-the-top gifts and then turns neglectful or downright mean after the wedding day, too many of those companies promptly abandon their most loyal advocates and go chasing after new, fresh meat.
The travel industry, in particular, is famous (or infamous) for its loyalty programs. Airline frequent flyer programs, hotel rewards programs, cruise line “club levels” – they’re all aimed at keeping customers from straying away to dance to a competitor’s siren song. Some are highly successful, others not so much. I hear a lot of griping and grumbling about travel loyalty programs these days, so I thought I’d offer some thoughts on the concept of loyalty, and on loyalty program features that – at least to this customer – are and aren’t effective.
First rule of loyalty club: Talk about loyalty club
Some travel brands are good at publicizing their loyalty programs. Others seem like an afterthought and are so obscure that customers who have been using a brand for years aren’t aware that they have “points” (nor do they know what to do with those points when they discover they have them).
If it’s going to accomplish its purpose of keeping your customers faithful to your brand, they have to know it exists, what it does for them, and how to make the most of their memberships.
Give me a KISS: Keep it simple – sort of
If you want to avoid frustrated customers, making your loyalty program easy for everybody to understand can go a long way. Some programs are simple and straight-forward, sometimes too simplistic. Others are complicated and confusing.
The complications usually arise from an effort to make the earning of points or status levels more “fair.” Either extreme can make customers feel frustrated. As an example, if a cruise line bases status purely on the number of cruises you take, some people will quickly figure out how to game the system by taking 10 two-day cruises. Meanwhile, the folks who took 5 seven- and ten-day cruises have sailed more and spent more money, but have a lower loyalty status.
Measuring by days instead of cruises is a step in the right direction, but then you get into other issues and arguments. Should solo travelers who pay double the per-person fares for their cabins get double loyalty points, too? What about those in suites, whose fares may be thousands more than someone in an interior cabin?
Since increased revenue is, in fact, the ultimate goal of the loyalty program, rewarding those who spend more is a legitimate consideration. This has led some other cruise lines to implement complex loyalty systems whereby you accrue points not only the number of days cruised but also the cabin type, and/or even the amount you spend on pre-paid and on-board expenses such as drinks packages, specialty restaurants, spa services and the like.
The problem with such granularity is that it makes it difficult for customers to keep up with where they stand, and makes for more complaints and misunderstandings over whether or not a certain status has been reached. It may also alienate some of your most loyal customers, many of whom do tend to spend less than new cruisers because they’re no longer in the throes of the awe and fascination that leads to a “Ooooooh, must do this, and this, and this, and this” mindset.
Many old timers just shake their heads at the naivety of those they see racking up thousands in on-board spending. If you see someone with an on-board account balance of less than zero (due to also knowing how to accumulate OBC, or on-board credit, prior to the cruise), he or she is likely to have a nice shiny high-status-color card hanging around the neck.
Which brings up another interesting topic.
Wearing your status on your sleeve: To show or not to show
Some cruise lines are very in-your-face with their loyalty status. Those at different loyalty levels get different colored key cards – which are used to open your cabin door and for all on-board purchases and are often worn by cruisers on a lanyard around their necks for convenience, to show off their status, or both.
Loyalty-on-display brings inevitable complaints of elitism from those at lower levels. Higher level customers are often seen as snobs, especially when they act as if their status confers some sort of superiority rather than just a few extra benefits. It appears some cruise lines may be considering moving to new systems, such as electronic tokens that serve the same purpose as cards, that have no indication (or a much more subtle indication) of status.
While this may create a more egalitarian atmosphere and address the problem of jealousy from newer customers and pomposity from higher level ones, I suspect it will also make the loyalty program itself less effective at doing its job.
While those at the very top levels are often “so over it” and past the desire to publicize their status, for those on the way up, showing off to the world (or at least to the ship) that you’ve just finally earned that shiny gold or platinum card you’ve been wanting for so long is in itself one of the benefits of being loyal.
Companies have a dilemma: If you make loyalty status overly obvious, new folks will complain. If you make it overly private, booking more trips than you otherwise might in order to attain the next level loses some of its urgency – unless that level offers other very significant and tangible benefits, which brings us to the next point.
What’s in a name (or color)? Real vs. perceived rewards
When I look at the loyalty perks for some companies, I’m reminded of someone I know who was promoted to vice president of a large corporation. I was impressed, until she told me that the company had dozens of VPs – that those at the top substituted fancy titles for “real” promotional benefits – such as more money and more decision-making authority.
Sometimes, in the travel biz, it’s the same way: the “title” – Diamond, Black Card, Executive Elite – is more impressive than the actual benefits. Some of the loyalty perks are really little more than gestures with minimal practical value.
A free bottle of water (that would have cost you maybe $2 to buy for yourself). A free cocktail – but only on a certain day between certain hours (usually hours when fewer people would be inclined to imbibe) when the moon is in the seventh house and Jupiter’s aligned with Mars. Priority in making reservations at specialty restaurants (where you pay extra), but of course subject to availability after all those other priority people have booked. Loyalty gifts that many who get them give away or throw away or take home and put on a shelf.
Don’t get me wrong. I’m not saying these aren’t nice gestures, but are you really going to book a dozen $2000 cruises just to “earn” $20 worth of stuff? I contend the majority of those who are consciously working on getting to the next level are doing it to see their names on a card of a prestigious color – the intangible benefit of feeling that they belong to a “special” group.
There are, however, a few benefits of cruise line loyalty – aside from card color – that really matter. One of those is priority embarkation and debarkation. People like to be first in line. This is one of the major benefits of airline loyalty programs, as well: the opportunity to get on board before the masses. Ships, hotels and airlines also have special lines at their service desks for customers with status.
In today’s hurried and harried world, not having to wait (or at least not having to wait as long) is one of the most prized benefits you can extend to your loyal customers. It’s so highly valued that people who haven’t yet earned the status are more than willing to pay for it.
And that “shortcut” brings us to one of the biggest points of contention among the cruise crowd.
Buying your way in: extra privilege packages
When Carnival instituted the Faster to the Fun program several years back, the uproar from long-time, high-status customers was immediate and fierce. By paying a fee (which has steadily risen from $49.95 to the current level of $69.95 for a seven-day cruise), any customer – including first-timers – can purchase some of the benefits that you get for free if you’re a Platinum or Diamond level customer.
Specifically, FTTF folks get priority boarding and debarkation (theoretically after the Diamonds and then Platinums, but it doesn’t always work out that way), and priority luggage delivery. They also get to use the Priority line at the guest services desk, and priority boarding of tender boats at ports where tendering is used to get to shore.
Now, there is a catch. Only a limited number of these FTTF packages are made available for each cruise. Obviously, if the number weren’t kept low, everybody would be “priority” and it would become meaningless (and then no one would buy it). Nonetheless, while serving as a source of extra revenue for the cruise line, this practice has impacted those who got the benefit the old-fashioned way, particularly in terms of speed of luggage delivery (since all priority luggage is treated equally), guest services, and tendering.
This is, of course, another business dilemma: Providing this ability to buy benefits makes newer customers happy and upsets long-time ones. Airlines offer to sell you not just the perks, but the actual status level, for an extra charge. I don’t know how many times I’ve received email from American encouraging me to upgrade my status for “only” $600.
Speaking of airlines: interestingly, I’ve never heard airline frequent flyers complain about those with lower loyalty status who buy first class seats getting not just equal but higher boarding priority than they get. And come to think of it, I haven’t heard high status cruisers complain about the perks that come with booking a suite, even if you’re a first timer.
Perhaps the takeaway is that it’s the perception that others can buy the same benefits cheaply that riles people up so much. In that case, maybe further increasing the FTTF price would sooth some of the agitation. Or maybe not.
The loyalty gap: It’s a long, long way from here to there
Over the last few years of being an avid Carnival cruiser, I’ve noticed a pattern. New people take their first cruises, get hooked, and are thrilled to “graduate” from that Blue card (that indicates you’re a first-timer) to the Red card that says “I’ve been here before.”
Then they are highly motivated to get in the 25 days of cruising required to reach Gold status, which gets them – well, not much, except a free drink, and a card that announces “I’ve done this quite a few times before.”
Next step is Platinum and that’s where you start to actually get some worthwhile benefits, such as the aforementioned priority boarding, the party, and the little gifts. It’s a little harder climb up the mountain to rack up the 75 days that it takes to get there, but for many, it’s a feasible goal.
And then, as you stand there with your shiny Platinum hard in hand, you look up and see in front of you … a sheer vertical wall towering above you. The trek to Diamond means an additional 125 days, for a total of 200. And that’s the point at which many people who were booking cruises to fill every vacation day they had come to a sudden halt.
Diamond just doesn’t feel attainable for those who can “only” cruise 20 or 30 days per year. And that’s the point at which I hear many people say, “Now that I’m Platinum, I think I’ll check out some different cruise lines.” This is exacerbated by some other factors that kick in around the time you get that Platinum card – such as the “been there, done that” syndrome.
The same old same old: It’s deja vu all over again
In one respect, the cruise industry and loyalty experience is different from airline and hotel programs. While your experience on the plane or in the hotel may be similar every time, airlines fly to many, many different locations and hotel chains have outlets at a huge number of destinations.
Cruise ships, by their very nature, are more limited in the number of places to which they can sail, and whereas the plane is just a means of getting somewhere and the hotel is just a place to sleep and have a “home base” while you’re there, a ship is both transportation and, in a way, destination. It contains not only your cabin but your dining and drinking venues, your entertainment resources, shopping, gaming, and more.
Around the time you attain a high loyalty level on a cruise line, there’s a good chance that you will have sailed on most of the ships in that line’s fleet, and you may have been to most of the ports that line has in its itineraries. You’ve eaten those same dishes on that same menu over and over, too – and much as you love all the ships, destinations and food, you might just be starting to develop a hankering to try something different.
Maybe you want to try the “megaship” experience that another cruise line offers. Maybe you want to try the smaller, more intimate and more upscale type of ship that’s the specialty of yet another line. Maybe you need a change of scenery from the Caribbean islands and want to cruise in Europe, Asia, or other parts of the world where your cruise line doesn’t go.
There are many folks who are content to eat steak and baked potato every single night for the rest of their lives, but there are others who thrive on variety and enjoy sampling more exotic fare from time to time. Waking up one day, hungry for teppanyaki or tzatziki doesn’t mean there’s anything wrong with the steak and potatoes or that you won’t ever order and enjoy it again.
Sometimes it’s just nice to shake things up by taking a taste of something completely different.
Back at the bottom: Starting all over one more time
As powerful as the urge to have a new and different experience might be, long-time customers of a particular travel provider have some good reasons not to. One is simply the fear of the unknown; we humans also like being within our comfort zones, where we know how things work and what to expect.
That’s not always enough to counter the craving and curiosity, though – and that’s why these loyalty program exist. Even more than that, we hate starting over.
The loss of status and the perks that go with them serve as a compelling deterrent when high-level customers consider “defecting” – even temporarily – to a competitor. The prospect of starting all over at the bottom of the pecking order isn’t attractive after you’ve reached top or near-top status and gotten used to being treated as if you’re special.
Give up the chocolate covered strawberries and (especially) the privilege of being first in line? You’ve got to be kidding.
In the frequent flyer world, elite status is accrued over a one-year period and you have to start all over, accumulating the requisite miles again that year to maintain your status. In the cruise community, status is something that you build up over the years. That makes sense, as many people are only able to cruise once or twice a year.
This means it’s psychologically easier to switch your loyalty from one airline to another, since your status doesn’t carry over from year to year.
If a vendor wants to lure away anothers’ long-time customers, the best tactic is to offer instant loyalty status. And some of them have come to realize that and are using it, along with comparable benefits and competitive prices, to take business away from other lines.
MSC Cruiseline offers a loyalty matching program that’s turning a lot of heads. They’re matching status for cruisers from other lines, so that for example, if you’re Diamond on Carnival (their highest level), you can take your very first cruise on MSC as a “Black Card” (their highest level). If you’re one step down – Platinum on Carnival – you get MSC’s second-highest status, Gold Card, and so on.
Is it any surprise that I’m seeing so many previously avowed Carnival-only cruisers venturing out of the fold to book a cruise on MSC?
Under the corporate umbrella: Spread the love around
If other cruise lines don’t want to offer loyalty matches to competitors’ customers, you would think the least they could do is offer it within their own corporate families. Hotels make a practice of this: staying at one Hilton property (Hilton, Doubletree, Embassy Suites, Homewood Suites, Hampton Inn, etc.) earns you status that is valid across the portfolio of hotel brands.
Sadly for cruisers, a Diamond-level Carnival loyalist has no status when sailing for the first time on other CCL-owned cruise lines such as Princess, Holland America, Cunard, P&O or Seabourn. In my opinion, this is a bad business decision because for many, Carnival is the “gateway drug” of cruising. They cruise first on Carnival because historically the cost was lower. They get hooked and cruise more, and build status.
Then over time, they get tired of the same itineraries and ships, or they want a somewhat more upscale experience for special occasions. If the loyalty program included the sister cruise lines, they would naturally gravitate upward to those. Since it doesn’t, there’s no incentive to stay within the corporate umbrella so they might as well try Celebrity or Crystal or some other non-affiliated cruise line.
The reasoning that’s been given in the past is that it’s too technically difficult to calculate comparable status across the different lines. However, many are now thinking: If MSC can do it, as a completely separate company, it wouldn’t be all that hard. There have been hints dropped that Carnival’s “beards” (the decision-making executives) might be considering an extension of the loyalty program across some of its brands.
In my opinion, this would be a good move – and I’m speaking not just as a Carnival cruiser who would take advantage of it to book on some of CCL’s more expensive lines, but also as a CCL shareholder who believes it would be good for the company in terms of customer retention, reputation, and ultimately the corporate bottom line.
The travel provider giveth and the travel provider taketh away
The absolute worst thing that any company can do in terms of customer relations is give your customers something for free, and then take it away. This has been a big point of contention with cruisers over the last few years. Even the removal of something as seemingly insignificant as a cheap square of chocolate on the pillow at turn-down, many of which went to waste because nobody ate them, can stir up surprisingly strong emotional reactions.
When a cruise line has previously hosted a party with free drinks for all of its returning guests, then limits that to only those with Gold, Platinum or Diamond status, then further restricts it to Platinum and Diamond only, those who get left out in the cold won’t be happy campers.
When that party previously provided the opportunity to down several cocktails of your choice, and then it becomes difficult to flag down a server to get even a second one, and when you’re discouraged from ordering the drink of your choice and encouraged to take one of the pre-prepared glasses of rum punch or “house wine” instead, expect complaints.
And when even at the more exclusive Diamond brunch, you’re offered only wine and have to specifically ask in order to get the drink of choice, even though you do get it, some folks are going to have a subtle sense that they aren’t quite as appreciated as they were before, that the company is no longer going all out to make them feel loved.
This feeling isn’t limited to cruisers. When airlines revamp their frequent flyer rewards and raise the number of miles required for free flights, it makes their loyal customers feel the same way. When in one fell swoop, my 120,000 miles will now buy me what only 100,000 would have bought the week before, it’s the same as if you just took 20,000 miles away from me.
The new world order: Is loyalty an outdated concept?
Once upon a time, we lived in a world where loyalty was paramount. Most married people didn’t get divorced; employees stayed with their companies for decades and then retired; if we drove Fords, we wouldn’t even think of buying a Chevy (and vice-versa), we faithfully shopped at “our” stores, bought “our” brand label products, and always left the dance with the one who brought us.
Today, loyalty seems to have lost its allure for many of us. People change spouses as often as they change underwear; lease (not buy, which implies a long-term commitment) a different make and model of motor vehicle every two years; we flit from one retailer to another to get the best sales (or just buy it online), and we’re too busy playing with our computers, phones and video games to get up and dance.
Companies of all kinds hired marketing firms and consultants to whom they pay big bucks to come up with ideas both for attracting new customers and for retaining old ones. Grocery stores ply us with special coupons, automobile dealerships provide us with cookies and bottled water and loaner cars to drive while ours are being serviced, and travel providers make us members of their “clubs” and deluge us with email and snail mail reminding us of how “valued” we are.
And the loyalty programs work – up to a point. But companies need to realize that loyalty – like love – has to be a two-way street if it’s going to work. When customers start to feel that you no longer care about them and their input, that you’re just going through the motions like a spouse who brings you flowers and candy but is really lusting after the pretty young thing next door, that your real focus is on bringing in brand new customers, that’s when you lose their loyalty and they’ll stray. Maybe temporarily, maybe forever.
You give loyalty, you’ll get it back. You give love, you’ll get it back.
– Tommy Lasorda