Resources

Hilton Honors Loyalty Program Sets Itself Up for Future Success

Brian McHugh | July 24, 2020

I recently saw the news that the Hilton Honors Loyalty Program will rollover 2020 Elite Qualification into their 2021 Program in response to the ongoing Coronavirus outbreak. Hilton Honors is one of the most popular B2C loyalty programs in the world, with over 100 million members. Programs like these can differ significantly from B2B programs, but they do provide some best practices and anecdotes when considering a program. Consumers, like B2B participants, can have several choices of companies that offer comparable products, services, and prices. Customer (B2C & B2B) expectations are evolving and combining faster than ever, and loyalty programs like Hilton Honors shift the share of wallet to their competitors just like B2B programs.

Now, Hilton is effectively extending the requirement window for earning 2022 Honors status all the way back to 2020. For example, if you are a Gold member in the loyalty program and you complete three elite-qualifying nights this year, all these stays will roll into 2021 — so you’d start 2021 with three nights towards your 2021 goal. This move comes in addition to other measures put into places such as extending elite status through 2022 and pausing point expiration.

Below are three things we can learn from this program and should consider for any B2B loyalty program:

1. Soft Perks Matter

If you have ever been a road warrior or traveled a lot in the past, you’ve experienced how valuable elite status airline and hotel soft benefit perks can be. Hard benefits like points or rewards, speak to your extrinsic motivation. On the other hand, soft or non-economic benefits can speak to our intrinsic desire to achieve a different status and the drive to acquire. Neuroscience research has found that dopamine is released into the brain anytime we anticipate achieving a goal, or we achieve it. As great as economic benefits are, experiences stimulate a part of the brain that economic benefits don’t and earning a higher status can be an emotional experience. The extension of Hilton members’ earnings window will help ensure the hotel’s best customers don’t feel disengaged.

2. Trust Comes Before Loyalty

Trust is a core part of a business relationship and frankly an expectation. Customers choose you because you provide a great product, service, or experience at a fair price.  But loyalty is an emotion, and one that cannot exist with a foundation of trust already in place. Customers want loyalty to be a two-way street, and for that to happen, they need to feel like they can trust you and that you won’t ditch them when times get bad. Building trust is the best long-term sales strategy, especially when emotions intensify during a crisis like the pandemic. Hilton’s recent announcement speaks directly to its customers and the trusted relationship the company has built with them.

3. Goal Setting and the Importance of Behavioral Economics

Many B2B Programs, including sales incentive programs, can be goal-based, which requires participants to hit a goal before they earn any rewards. Any goal-based program should be reviewed to ensure the goals are achievable and fair. Goals that are viewed as unfair will alienate and discourage the behavior a program is trying to drive. What Hilton is doing with their loyalty program is based on behavioral economics and the Endowed Progress Effect, which states that people are more likely to complete a goal if they are given a head start towards that goal. Hilton is essentially offering all stays in 2020 as a head start for 2021. B2B loyalty programs could take a page out of this playbook and use this tactic to extend program earning periods or even allow Q4 purchases to contribute to a future 2021 program.

Conclusion

We’d probably like to think that logic drives all our decisions, but the truth is that it often doesn’t. Logic only represents about 20% of human decision-making. Emotions tend to drive the other 80% of the choices we make, and it’s essential to consider the emotional state of your participants during times like these. Hilton’s announcement ensures its loyalty program is set up to not only retain business but generate loyalty in the future. Capturing mindshare today will ensure you capture market share tomorrow.

Related Resources