There has been no shortage of new takes on card-based loyalty schemes — especially in the last decade as digital has exploded and the competition for customer spend has become increasingly tight.
Particularly, in the travel and hospitality sector, co-branded card programs have flourished.
But for all the claims of novelty, many are centered around a common element: points. A customer spends to earn them, and then burns them on whatever is offered by the issuer and its co-branded card partner, which is often an upgraded seat on a flight, upgraded room at a hotel, or that all-important early boarding status at airport check-in.
These are all perfectly fine offerings as far as rewards go, Visa’s Senior Vice President of Merchant Sales and Acquiring for Europe Hemlata Narasimhan and Accor’s Senior Vice President of Partnerships Mehdi Hemici told Karen Webster in a recent conversation, but they’re generic.
“For a rewards program to be really rewarding as of today, it has to stand for something other than just points,” Hemici said. “Going all in on a points-only program is not a way to get to differentiation.”
Narasimhan told Webster, in the era of digital commerce and the wealth of data available on consumers and their preferences, the industry can do better and offer more personalized experiences directly tailored to the individual customers preferences. Loyalty doesn’t have to be viewed as an opportunity to push points and hope for the best in terms outcomes, she said, but to build something a lot more exciting that will bring those curated consumer experiences to life.
It is why Visa and Accor global hospitality group have announced a new global partnership aimed at recreating loyalty and rewards for Accor Live Limitless loyalty members — a new Visa co-branded card that seeks to rewrite the rules on how to keep consumers engaged and spending via personalized loyalty experiences.
Replacing Points-Based Programs With Preferences
Consumers worldwide don’t need just another card offering, Hemici noted, because there are already so many. In fact, given the number of points-based programs the average digital consumer is already managing, adding more is an annoyance rather than a benefit.
“But what we see is a great chance to leapfrog that mode into a mobile-first, preference-based program, and that’s where our ambition is,” Hemici said.
What preference based might mean, he noted, will vary by context. Today, Accor is mostly tightly associated with hospitality and travel — but with the major injection of scale from its global partnership with Visa, Accor intends to branch out more broadly into the worlds of everyday spend and what Hemici referred to as “mobile on-the-go spend.”
Most simply, he said, what Accor aspires to do is leverage its rewards program to take the robust data troves it has on its customers’ preferences, and use that to push offers and recommendations relevant to that data.
The ability to directly vet the offers surfaced for customers, Narasimhan noted, is what attracted Visa to the partnership because the combination of digital payments technology and rewards is where she said offers can get “really exciting.”
“We see an opportunity to bring together preferences, with loyalty, with payments, and a call to action all at once — and turn loyalty program interaction from something that is occasional to something that is habitual,” Narasimhan said.
Building it Out
The opportunity and the ambition, Hemici said, is to build a version of loyalty that works better for everyone. The customer gets more of what they want and a less friction-filled discovery journey. Merchants get better conversions, fewer freebies for those who probably don’t need them to stay loyal, and a stickier loyalty program.
“We believe that, as an industry, we are doing a quite poor job of highlighting the beautiful destinations we have in the world and the wealth of experiences that can be enjoyed,” Hemici said. “Loyalty and rewards [have] to be about opening up the destinations and experiences that consumers are waiting to discover.”
That won’t be built overnight — from announcing the product today (Feb. 18), Accor still has an acceptance network among merchants to build, issuers to sign on to get the card into market, and Accor experiences to integrate with Visa’s wider rewards network. A specific launch date for the product is not yet available.
But while the start point is still under construction, both Hemici and Narasimhan said the end point is clear. Rewards need a reset because points just aren’t personal enough to be relevant — especially when the data is out there to build a custom experience where peddling points is falling short. It’s a move that they said a points-weary, one-size-fits-all rewards customer is calling for.
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