Loyalty programs vs Rewards Programs
 

Can we PLEASE stop calling them Loyalty programs and start calling them what they are - Rewards programs?

Loyalty programs reward loyalty. Sticking with a company even though they might not offer the best option at the time, we will help you out if you make sure you stick by our side.

Rewards programs reward Business. The more you spend, the better deal you get, or the more you get back. It emphasizes the dollar value of the business you do, not who you do business with.

I'm not arguing whether one is better than the other, but I am arguing that we need to call things what they are, not muddle the issue.

Do you have an example for a loyalty only program which doesn’t provide rewards based on the $$$ spent?

irs.gov

:D

The last one that was sort of a loyalty program to me - although it also had great rewards - was SPG.

The "loyalty" part, for me, was that I knew they just took care of Platinums. Even when the hotel was full and they couldn't give you a suite, they still made things go right. And many, many times threw in unpublished extras like free drinks, welcome gifts that weren't required, etc. It felt like actual hospitality.

Marriott, by contrast, is the most pure-rewards program there is - very transactional, impersonal, and at best by-the-book in terms of what you receive. (At worst, you have to claw and fight for what the published benefits are.) The one element of SPG they retained is Ambassador for the very, very top tier, which is better than nothing, but even reading on FT it seems like a far cry from how beloved the Ambassadors were in SPG.

I haven't felt like any airline program rewarded loyalty since the early 00's. I was mid- to high-tier on AA, US, and UA in different years - it was about then that zero-hold direct phone numbers for elites started disappearing, and things like the AA Platinum Desk at airports started to go away. The customer service side of the airline experience has steadily gotten worse for 25 years now - and the programs are now all exclusively transactional and formula-based. I no longer have any loyalty to any carrier - I just compute what the benefits and miles are worth to me and factor it into my buying decision.

So called "loyalty" programs have always been about creating brand loyalty by rewarding volume by offering perks/rewards.

You could be the most loyal customer to a brand, always going out of your way to use them, but if you don't have the volume then you don't get perks/meaningful rewards. Conversely, you could have so much volume that you can earn top status with multiple airlines or hotels, nothing loyal there, you just fly/travel a lot.

All that is changed in recent years is that the perks/rewards have been watered down, the volume that they are rewarding has shifted from miles flown/nights stayed to dollars spent and there has been so much consolidation that we have mega brands so the base of statused members is higher.

As far as marketing is concerned, they are loyalty programs. However, to some passengers, they think that a repeat "loyalty" of sorts deserves the red carpet being rolled out. Marketing know how obsessed some people are over getting "free" things an will often book more expensive flights to get these things (even if they don't actually get anything for free).