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Gray is the new green Part 3: Point hounds

Loyalty programs are a luxury that many take for granted nowadays. This wasn’t always the case, and much like the advent of the television, loyalty programs and their associative reward points are something that rose to prominence right as the baby boomer reached adulthood.

I still recall the unveiling of the American Airlines AAdvantage program in 1981, the most significant travel loyalty program, following the pioneering footsteps of Texas International Airlines (which is now technically a part of United Airlines). What was once a very unique “points for miles traveled” selling advantage has been universally applied for airlines, hotels, retail outlets, gas stations, credit cards and so on. Nowadays, such programs are expected and, hence, it takes an increasingly lucrative points-to-reward ratio to spark any sort of consumer excitement and, in turn, loyalty.

But there is an interesting opportunity within the aging boomer masses. We matured alongside the novelty of such programs and, whether out of respect, habit or stubborn nostalgia, we are the generation most correlated with the concept of “point hounds” – those who ardently seek out desirable rewards and make a plan of redeeming them.

Given the boomers’ leading spending power accumulated through decades of career life within some of the most prosperous decades for the North American economy, we have likewise accrued the most points on average of any generation. Now, because of retirement, we are ready to cash in our points en masse for the best deals, and we have the time to book a year or so in advance as mandated by many of these points programs.

This has both pros and cons. First, most properties don’t obtain a direct monetary stimulus from point redeemers. For the most part, it’s a cost the hotel has to swallow. Never forget about the immeasurable secondary benefits: word of mouth and upsells. Also, the principle of “a full house is a happy house” applies here; this group can help you raise occupancy levels during traditional low seasons.

Typically speaking, point hounds are a rather thrifty lot, but that doesn’t mean they are immune to the emotional sale drivers a marketer might use on property and through the website to help capture a bit more revenue. The hospitality industry boils down to the creation of special experiences and memories for guests. Play up this fundamental objective by appealing to a boomer’s desire to make each moment count, whether it’s through food (buy-one-get-one-free desserts, for instance), beverages (special aperitif menu for loyalty program members), spa (retiree-only treatments) or rooms (upgrade at half price pending availability).

And then, of course, if a point hound likes what your hotel has to offer, word of mouth will bring more fellow baby boomers in and further opportunities for upsells and loyalty building. Some of that word of mouth may even trickle down to Gen Xers and Millennials, propagating your brand awareness into future generations of consumers. The bottom line is that even though the concept of boomer point hounds may seem discouraging, always be on the lookout for creative ways to turn this gray into a potential new source of green.

On a personal note, I have never redeemed any points on one of my travel credit cards. Now just breaking through the five million-point threshold, I am starting to eye significant redemptions opportunities. Any suggestions?

(Article published by Larry Mogelonsky in HOTELSmag on April 17, 2013)

Larry MogelonskyGray is the new green Part 3: Point hounds