“Loyalty deserves recognition” is a concept that most people believe in. However, the reward points systems used by companies to keep us coming back are waning, with customers feeling unloved and undervalued. But what if the consumer had the control and the middleperson was cut out?
Ed Cunningham, our CEO at Trippki had a vision, “I realised there was a huge opportunity for both hotels and consumers to benefit from each other in a fairer sharing economy. Having worked at the various levels of tourism and travel, the golden ticket is to have direct relationships between the customer and the supplier, without the middleperson taking huge commissions.” He spent many years in the travel industry in Southern Africa from which he had built an extensive network of fellow travel professionals. Three years ago Ed discovered Bitcoin and has been an enthusiastic fan of Blockchain technology and its potential ever since.
At Trippki we noticed that the hotel industry was gaining more than the consumer. For example some of the worst reward systems by hotels enforce restrictive blackout dates, this means that the points you’ve accumulated can’t be used at the most popular peak times, the times when you actually want to use them.
Most industries use a rewards system following the pattern laid down by the loyalty card scheme launched by Tesco into the UK market in 1995. The concept was a simple one, by buying your usual groceries you pick up and collect reward points that you spend on buying more groceries. With Sainsbury’s and Boots following suit with their own loyalty cards soon after, it wasn’t long before other retailers were rolling out loyalty reward systems as an almost standardised practice, some work but many don’t deliver any value.
Consider a typical Air Mile reward experience. Over the years you’ve collected a significant portion of Air Miles, from say, when you actually had the money to take a vacation on a long haul flight to New Zealand. After being bombarded with emails to make sure you spend the points before they expire, a flight to Berlin, Madrid or Paris comes to mind. But when you go to spend the points you realise that you have to book a more expensive flight to actually ‘gain’ anything at all. So you let them expire and never think of using the system again.
Research now shows a significant dip in signups for reward cards. In 2015 a phone app called Loyalive, that lets people know how many reward points they’ve accrued found that, in the UK alone, £4.5billion of reward points hadn’t been claimed that year. Apathy, frustration and forgetfulness are cited as some of the top reasons. 92% of adults in the UK are registered with a loyalty card, with the average person having at least three, but they are making little use of them.
Natalie Berg who has spent the past 15 years providing analysis and opinion on the world’s largest retailers, with a particular focus on online retail and changing shopping habits says:
“The notion of rewarding your most loyal customers will never disappear. Loyalty schemes still exist but, as expected, have moved away from this notion of ‘racking up loads of points in exchange for a few Dollars or Euros every quarter’ and towards more personalized and often real-time experiences such as using beacon technology to offer targeted real-time offers.
Retailers are discovering new ways to reward loyalty in today’s digital age.”
Personalised and real time perks fit in very well with the Trippki concept, where with the TRIP Token, rewards are paid to hotel guests once they check out and are given in the form of a value transfer, ranging between 2.5–10 per cent of the Hotel Rack Price and payable by the hotel at their discretion.
Hotel rewards are not novel but Trip Reward Tokens are because they are tradable on secondary exchanges for other crypto currencies, and as they are deflationary in nature provide a real value proposition. Blockchain technologies have not been ignored by the rest of the travel industry either, in fact in 2014 airBaltic was the first airline to use bitcoin for booking a flight.
It is not just the public opinion of loyalty cards that has changed it is also how we as humans live in the 21st century that affects the rewards that we as customers demand. Take the accommodation industry, with Airbnb you can book a whole house in most cities in the world, at practically no notice, the same price as a hotel room, so what good are stringent rewards compared to that?
Digital Nomad Edan Yago, from Johannesburg South Africa, travelled the world for two years creating his start up called Epiphyte, which provides financial institutions with faster and convenient international transactions over the Bitcoin Blockchain Network. All he needed was his laptop and a room to do it in.
“As human life has become more and more abstract, and more and more people spend much of their time dealing with abstractions it doesn’t really matter where you are dealing with them from. So some people have started to travel because it’s cheaper, more exciting and because they need to be in a lot of places because their network is spread across the world. It’s the kind of the thing that people used to call the jet set club, well the jet set club has been democratised.” He says.
Technology will continue to be one of the biggest catalysts for change in our lives in the 21st Century. Some hotels now are using mobile phones instead of door keys and some use robots instead of staff. So we are entering a world of ideas that is leaving the past behind and ushering in a freedom that humans have never known.
Yet as we progress forward with the travel industry can their existing loyalty rewards system survive? Well foresight comes in short supplies. For example just think of what a lot of newspaper proprietors said when the internet was on the rise, that print would never die, and we saw where that got them. So by the same merit the travel industry ignores these changes at their own peril.
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