Refreshed Loyalty Branding: A Chance To Do More Than Repackage Stale Rewards
As brands evolve loyalty programs to “go beyond rewards” are they truly offering more valuable loyalty experiences or simply repackaging dated ideas? T3 Loyalty Practice Lead, Sean Eidson, and Chief Creative Officer, Jay Suhr, look at two recently refreshed programs from brand and program perspectives.
Jay Suhr: Confession: I’m one of the 80% of Americans who belong to multiple loyalty programs (consumer average is 22), but am truly loyal to just a few. I’m also a hyper-curious creative guy and clog my inbox with loyalty email from brands T3 manages and ones I value. So when Marriott consolidated its loyalty programs under the new Marriott Bonvoy name and Nordstrom jauntily introduced The Nordy Club, I spotted a trend. Are these just intriguing new names or the sign of something bigger?
Sean Eidson: Loyalty is definitely evolving. I think most brands are realizing that it takes more than a bribe to win trust and advocacy from their best customers. There’s a definite trend to focus on the experiential elements of the program as well as how the program elevates the overall brand experience. However, that’s not what happened with Marriott and Nordstrom.
Marriott’s Bonvoy was the result of the merger that created the world’s largest hospitality program. The Nordy Club program expanded ways to earn, including all forms of payment, not just the store card. For both, the heart of the programs are about earning and burning points and getting discounts or free stuff—pretty basic.
How should brands use the re-naming opportunities to elevate incumbent loyalty programs?
Jay: A new name is the first thing customers are going to see. Atypical names like Bonvoy and The Nordy Club signal a fresh take and change. Customers will approach that change with a mix of skepticism and curiosity.
Skepticism comes from years of being burned by rewards programs where the changes tilted toward the company—devaluing points, making redemption more complicated, diluting status (and others). First thoughts from your customers: What happens to my points? Are they worth less? Are you making things better or harder? Is the new brand a facelift for the old program or something valuable that I should pay attention to?
New branding also sparks curiosity, creating a rare moment to recapture the attention of your most loyal customers and introduce new experiences. The newness also creates permission to adjust the program’s personality to engage new generations. Bonvoy and The Nordy Club are more playful than the functional “Rewards” names they replaced. They signal change. But is it real change?
Sean: Nordstrom has one of the all-time greatest brand components in its returns policy. It’s incredibly democratic and engenders deep trust. The new program democratically expands earning opportunities for everyone which is important as millennials enter their prime spending years with an aversion to debt and credit cards. It’s a powerful example of an economic decision being on-brand. However, refreshing the branding and re-engineering the experience through the program are not the same. The hero benefit of the Nordstrom program is still earning points for dollars spent to redeem for $5 – $20 rewards certificates—nothing new.
Marriott/SPG is different. The effort was like turning an oil tanker. Millions of people in both programs were facing the same “Who moved my cheese?” concerns experienced when airline programs consolidated. Members were on edge, hoping they wouldn’t have upgrades taken away or have the points required for a free room balloon beyond reason. Inevitably, the heavy lifting of integrating the technology, program architecture and communications systems seems to have sucked the energy out of the change process because it doesn’t seem very different, just bigger.
Jay: I’m a big Nordstrom fan. It is the only department store I visit willingly. I have their app. I shop their sales. They consistently surpass the mark for personal service. When The Nordy Club hit my email box, I loved the winky informality of the name and was curious to know more. A sophisticated video hit the high points of the program, but I expected more. It’s not going to affect my loyalty, but it didn’t add a deeper dimension.
Marriott Bonvoy is the bigger miss. When Bonvoy launched its unexpected name and big TV campaign, I was getting signs of interesting changes. Instead, I just got more of the same in new packaging: a bombardment of special offers, credit card solicitations (100,000 POINTS!), and other CRM I’ve seen for years from Marriott and Starwood. It doesn’t live up to their “Rewards Reimagined” promise. They fumbled an opportunity to offer more. Did I miss something?
Sean: Looking under the hood, both programs still focus on conventional loyalty mechanics with some improvements. It seems that Nordstrom was playing catch-up from a payment perspective, but has positioned themselves for building deeper experiences with access rewards and curbside pick-up (a service we see gaining fast adoption in other categories). As physical retailers grapple for continued relevance, the long play is to create exceptional experiences that are powered by customer-level data in ways similar to online experiences. That requires customers to identify themselves, agree to have their purchases tracked and opt-in to receiving communications. Programmatic loyalty has proven to be the best way to get them to share that information, but we think it’s an accelerant to an exceptional experience.
Marriott Bonvoy has all kinds of great experiential levers to pull and they do to some effect with room upgrades, portfolio brands and champagne at arrival. But this recent change was a chance to really lean into deeper aspects of loyalty and lead with an experience-first promise. A more customer-centric approach would have included full audits of customer touchpoints, pain points, and communications. These insights would have identified areas to introduce elevated promises, tools, and experiences. Members were primed for big news but got “New name. New look. Same great program.”
Nordstrom and Marriott had a moment to uplevel their programs. They earn points for creative rebranding but pulled up short by not building loyalty through a more modern set of benefits and experiences. We’ll see how their platforms evolve.