Are Targeted Loyalty Program Promotions Unfair?

Yesterday I posted about the targeted promotion I received from Hyatt Gold Passport, offering 50,000 bonus Gold Passport points after 20 stays.

Hyatt-Bonus-Promotion-3

Typically when there are targeted promotions there are several versions of it, and it can take a while for every eligible member to be contacted. After all, with millions of members all emails will rarely go out at exactly the same time. I recommended that people wait before being disappointed that they weren’t targeted. 

That didn’t happen. A lot of people were pissed, and some even said they would be switching stays to Starwood or another chain, despite the fact that some other hotel chains haven’t even announced their fall promotion yet.

As someone that has on many occasions not been targeted by promotions, I’ve never taken it personally.

Loyalty programs are ultimately there to generate incremental business, and will use different metrics to achieve that. It’s not like middle school where the cool kids are picking their “favorites” for a flag football team.

They’ve simply crunched numbers, and are making a bet that the way they set up the promotion will maximize their return… which is the reason loyalty programs exist.

I don’t really view targeted promotions any differently than any of the other “discrimination” by loyalty programs. Is it fair to reward someone that spent $50,000 on 24 stays less than someone that spent $3,000 on 25 stays?

Similarly, if you do a Hyatt Diamond Challenge you get 1,000 Gold Passport bonus points for your first six nights. Is it fair that I don’t get those bonus points when I stay as an existing Diamond member? In other words, is it okay to reward someone that you think will generate more marginal business while not rewarding someone that’s already giving you business?

Or is the issue with targeted promotions that the criteria for eligibility isn’t transparent?

For many years Hyatt had rankings for Diamond members, whereby not all Diamond members were created equally. High value Diamonds would be differentiated from less valuable ones. I’m not sure if that’s still the case, but since the criteria aren’t published, is that something people would also have an issue with?

I understand there’s the other side of the equation as well. It’s 2014, and while targeted promotions may have stayed secret in the past, that’s not the case anymore. And I also get that it doesn’t “feel” good not to be rewarded.

The way I view targeted promotions is that they’re nothing personal. I evaluate my stay decisions by the day. I’ll stay wherever I get the most bang for my buck, which can be a combination of elite benefits, rates, and promotions. I’m not actually “loyal” to any loyalty programs. I achieve top tier status with both Hyatt Gold Passport and Starwood Preferred Guest because they’re most rewarding to me, but if they drastically changed benefits, I’d be gone faster than you can say “La Comp…” I mean, pretty fast.

To be clear, I’m not claiming that I’m right and that those of you that are offended are nuts.

I’m just sharing my perception of targeted promotions, and would love to hear what you guys think. Maybe it’s something that loyalty programs could learn from as well.

How do you feel about targeted promotions? If you don’t like them, what bothers you most about them? “Discrimination,” the fact that the criteria isn’t published, or something else?

Comments

  1. I don’t care for them for all of the reasons you covered in your last paragraph Ben. As you mentioned, it’s 2014 and while Hyatt certainly pleases their best clients, they take the risk of upsetting and turning away future best clients.

    I have no problem with a graduated promotion that awards the best clients more generously than someone who stays less frequently and spends less money at Hyatt hotels. I do have a huge problem with the “all or nothing promotion.” This targeted promo will turn me away from Hyatt.

  2. I agree with everything you said, though at the same time, I got my version of the Hyatt promo today, which was “stay at least once, get 5,000 points” — and that’s it. Which was certainly disappointing compared to the more lucrative version you have.

    I am personally always very curious about what drives these promotions. I only stay at Hyatts rarely and have no status with them, so there’s no particular reason for Hyatt to expect much from me. But at the same time, doesn’t that mean there’s no “harm” for them in offering me the more generous promotion? They know I’m not likely to earn the 50,000 bonus points, but if they offered me a more generous promotion there’s a chance I’d consider throwing some more business their way. And presumably the Diamond members receiving the 50,000 point offer were already going to be giving Hyatt a fair amount of business anyway.

    So, nice of Hyatt to reward their best customers, but from the perspective of Hyatt wanting to drum up more business and steal stays that otherwise would have gone to competitors, this targeting doesn’t make much sense from me.

  3. I’m of the mind that you should wait and see what targeted offer you get. The above Hyatt offer sounds great for those people who stay 20 nights at a Hyatt during a 3 month period, but I didn’t get that offer. Instead I just (an hour ago) got an offer from Hyatt that with *two eligible stays* in that same time period I could earn 8,000 bonus points (versus the 5,000 bonus points I’d get on that targeted offer Ben discussed). I don’t stay at hotels nearly often enough, but two stays in a 3 month period? Totally doable.

    Eh, you may lose out on some promotions, but you gain on others if you’re a savvy customer. Wait and see.

  4. I’m loyal to Delta, so clearly I enjoy being tortured. That said, they can do whatever they want. And I can go elsewhere. Though I doubt how many of us shift programs, where we’ve built up status and points, on the basis of not getting – or getting the wrong version of – an email.

  5. Targeted promotions drive away my business. In fact the more I hear about them makes me feel like “what am I not important to the loyalty program. Is my spending not important enough to them….fine then I will take my business elsewhere”

  6. @Lucky-I think bottom line is nobody likes to feel like they are less important or targeted. When we reach top status with an airline or hotel chain, we do feel we should get the same rewards for staying or flying that those that are not as loyal as we have been. If I book the same seat at the same price on UA flight as a 1K 2MM flyer with them, I do get frustrated that someone with no status is offered a 1st class upgrade for $100 but my offer is $500. If I paid for a stay or flight, I should get the same reward that someone else is receiving. If the airline or hotel wants to “target” a competitors loyal customer to bring in more revenue, then create a match program, etc that requires a level of stays or miles in the future to continue with the matched status.

    But that said, I completely understand the reason the targeted offers are there and I am not going to lose any sleep over not being on that particular list.

  7. Still no offer.

    If they aren’t sending me the offer because I’m already booked with them every week until December (with 113 nights already this year) – I will be enraged. I can’t imagine them doing that…if they know what’s good for them.

  8. I don’t stay at Hyatt much (but do have the credit card). I really don’t expect to be targeted, and don’t feel slighted.

    The promos that irritate me are the ones (IHG Big Win) that seem to put heavy burdens on their good customers and give the easiest and best rewards to those who hardly ever stay there, I didn’t jump all the hoops in the last BW, and have not been to an IHG property since, And maybe now they’ll reward me for not coming by giving an easy deal next time.

  9. I’m not sure it’s simply a matter of being fair or unfair… I think the core issue is that hotel loyalty programs are competitive, and loyalty doesn’t stick as easily as it does with airlines, for example — switching is as easy as a status match and changing future hotel reservations.

    As a much smaller chain than Marriott — which actually offers higher value promotions to its high-status-tier customers — Hyatt shouldn’t be giving frequent travelers any reasons to switch to larger competitors. This seems like an unforced error on their part — I travel every week and have my choice of Hyatt or Marriott. If I’d been targeted for both promotions, I’d be at the Hyatt. The fact that Hyatt excluded me left enough of a bad taste in my mouth that I’m now open to taking my business where it isn’t taken for granted.

  10. I feel like Hyatt should have sent this offer to all Hyatt members. Since spending 20 nights at Hyatts in 3 months is challenging, only a few individuals would complete the offer, but everyone would feel thankful to at least receive the offer

    On the other hand, you have to look at it from Hyatt’s finance side. If your job was to make money for Hyatt, what type of offer and who would you target for this promotion? Probably business travelers who pay the best available rate and spend close to 20 nights in 3 month periods.

  11. I have at least 20 nights to book in the next three months. I’m about 12 nights short of Hyatt Diamond status and 22 nights short of SPG Platinum status. So which would I choose? I actually like Hyatt better, and I would be convinced — had I been targeted by the promo — to book all of those nights with Hyatt in order to get the bonus points even though I didn’t need all of them to requalify. But instead I’ll give them to Starwood. It doesn’t matter that Starwood has no promo. I have a bigger gap to fill, and the only reason I would go above and beyond with Hyatt would be if I were properly motivated.

  12. @Scottrick: You nailed!!!! I am on the same situation. I am not aiming for the highest level with neither Hyatt not Starwood. I will end the year as Platinum on Hyatt and Gold on SPG. Thus, I have around 10 remaining hotel nights for business (not stays) until year end so it won’t change my status with either Hyatt or Starwood. In that case, I can pick one chain or the other. I spent plenty money on Hyatt this year on business and leisure and still was not targeted for any of their fall offers. It gives the impression that my business is not that important to Hyatt. Thus, I have no incentive to staying at Hyatt for the remaining of the year and will make sure I book all my remaining stays at a Starwood property.

  13. I think these targeted promos have some potential blowback. I tend to take my business elsewhere when I feel they incentivizing others more than myself. I guess it’s kind of like finding out your friend at work is making $20K more than you do.

    I got the disappointing 2k points for a stay. I have top tier status in a bunch of other programs so this doesn’t even get me close to even thinking about staying with Hyatt when I know others are getting much more lucrative offers. I tend to rotate through the programs even though I’ve maintained Marriott Platinum for several years now. I will gladly switch 20 nights a quarter if there is a particularly lucrative promo or I’m looking for enough points for a choice redemption.

  14. I don’t see the big deal. Airlines do this all time time, sometimes based purely on geography (double points if you live in NYC or Seattle, for example, and choose Delta or Alaska). Hyatt may want to gain new customers from competitors. I may have identified a weakness within its customer mix that it wants to address. Promotional offers aren’t owed to any customer, no matter what tier.

  15. There are actually ~7 or 8 promos by Hyatt this time and 50k for 20 nights is almost the second to last lucrative offer they had…the worst one is 2000 points tops, the other one that’s less lucrative is 6000 points on 3 stays (which is on par with 50k for 20 nights)
    The others include 5000/stay, 10k/3 stays, etc.

    I believe some Chinese dudes dug it up already and you can try register the different links:
    http://hyatthotels.hyatt.com/content/partnerlandingpage/en/50KSTAY20.html

    substitute 50kstay20 into everything else (2kstay1, 5kstay1, 10kstay3, etc) would get you to see which offer you are targeted with

  16. Count another Diamond that is a bit pissed… And not in the least because this used to be a public promotion. Not a great one since the more lucrative levels start at 15 nights, but better than the big nothing I have now.

  17. This has worked for me the last few decades. Spend lots with one then stop. They will always send you the best offers to get you back in the case of hotels sometimes the property offers you more to get you back with them the minimum is 24/7 i e time starts from check in time. Though my favourites tend not to be the chains. Currently have 2 invites for 2 night stay at 2 new hotels no points no cash free! I get a lot of comp upgrades at check in, in fact I haven’t used points to upgrade in memory. When I am feeling stingy I send a copy of my quarterly itinerary to my account managers, send it towards the end of the previous quartet!!! It’ about the amount you spend with the hotel or airline not the points on the credit card. With airlines it’s 150-200000 pa hotels most 50,000 but they get lazy greedy so you gotta stop! UA inaugural 787 LAX-MEL invitation to book a seat on this flight, no it’s not free but about 25% less than normal fare. Targeted promotions have been part of marketing forever and we did know about them before the internet, it’s called “a phone call”

  18. It makes me laugh all the cry babies who are going to take their toys and go elsewhere every time they feel slighted. The truth is most people will not change their behaviour one iota. If they move their stays from Hyatt to SPG the first time they don’t get a suite upgrade the crying will recommence. When Hilton devalued everyone cried they were staying elsewhere but the forum on FT seems busy enough.

    I have approximately 60 nights in hotels before the end of the year. I received the offer for 5k points after 1 night with Hyatt and that’s ok for me. I think Hyatt has worked out from my stay pattern that I am not motivated to try and make 20 stays in any given period so they are trying to entice me back with an easily achievable goal. I am a SPG Platinum 50. However I most likely will not requalify for 2014. My remaining 60 nights for 2014 are going to be based on price. However, in calculating value I will take into account any promotions on offer. I will however find a way to get that 1 Hyatt night in there.

  19. Genrrally, Hyatt is expensive in Asia. I probably stay with Hyatt once or twice a year. So I am happy with the offer I received – 1 stay for 5000 points. This is in line with my travel pattern with Hyatt and is doable.

  20. I am currently a Gold Status with MR (still shy of Platinum) and Gold with Hilton. I am eligible to take the Hyatt Diamond Challenge, but I abstain because I am not sure I would make the cut for 2015. Location, location, location. That is the big discriminator for me. I like the Hyatt brand, but their locations are few and far between where I go…and of course the places I travel to where they are do not deliver the best bang for the buck.

    Consider that a preamble.

    My offer is the following:
    Purchase Point Bonus
    5,000 – 19,000 Points 10%
    20,000 – 39,000 Points 20%
    40,000 – 55,000 Points 30%

    This does nothing for me since I have two stays this year. Offer me something to make it worth me brushing Marriott and Hilton off to the side. I know, I am not looking for the deal-of-all-deals, but make it worth my time in the beginning. That is how Marriott won me over. They did not dangle a “buy points” offer in front of me when I am new to the program. They gave me something similar to the 10k for three stays offer. Needless to say I have not really experienced any of the premiums that come with MR besides free breakfast at their Autograph locations.

  21. Was I targeted? No. How many stays/nights do I have YTD? 6 stays / 63 nights. Do I have Hyatt stays booked at that time? Yes – 5 stays for 40+ nights for the rest of 2014.

    Am I bothered for not being targeted? Nope Why? Because it is a fact of life. Nothing personal – it’s just business. Corporations like Hyatt run these types of targeted/discriminatory policies all the time to in order to generate incremental revenue. The difference is that in this day and age, people share everything on the web so we all can see what Hyatt thinks of us. The question is: now that you know what Hyatt thinks of you, what are you going to do about it?

    I for one am moving my stay to somewhere else. For my upcoming work-related stay abroad I was given the choice of Hyatt, Westin or Novotel. I originally went with Hyatt even though the Westin is more convenient. Now I’m going to give Starwood a try (LTD I’ve only stayed with them once years ago). One could argue that I’m actually moving from an irrational decision (based on loyalty program) to a more logical one (better hotel in this case). As Lucky mentioned in his blog above, one shouldn’t be “loyal” to any loyalty program. I guess the (lack of) 50k bonus is the kick I need to make a rational decision – something that I probably should’ve done in the first place but too lazy to do it.

    Will I stay with Hyatt again? Of course – I have 2 remaining DSU coupons and will get 4 more in March 2015. Will I stay with Hyatt once I used up all my coupons? Probably not. Will I return to Hyatt if they target me next year? Never say never but probably not – I’m now curious about the 100 nights starwood status. 🙂

  22. Totally unfair, particularly those double Status credit promotions from Qantas to “select” customers.

  23. It is a business decision, but some of us can easily substitute another chain for Hyatt. I need 9 more stays with Hyatt to keep diamond status, and they will only get that if I do not see a promo for the fall. Marriott has a systemwide promo that is easy to complete, and Hilton has a promo that works if your hotels participate in it, a big caveat this time. Hilton points are worth the least, but I have found good use at a few lower end properties in the USA.

  24. @Vicky – don’t know about cry babies.

    I want to participate in a loyalty program that is fair and equitable.

    Hyatt, this is poor.

  25. Lots of interesting perspectives here and many of you have given much in the way of food for thought!

    @Lucky: Your perspective is very interesting. I can see why it’s not a big deal for you. Your job means you can easily achieve status through multiple loyalty programs because you’re living in hotels for a year. Perhaps many of your readers have jobs or incomes that afford them that opportunity as well. However, bear in mind that some of your readers may not have the luxury to diversify their stays across multiple programs. So, if a person chose Hyatt as there only loyalty program for the purposes of not just earning enough points for free stays, but also to achieve status, it is perfectly plausible and reasonable to see that they could be pissed about it. They are truly being ‘loyal’ and as such, ‘loyalty’ to them means far more – or at least is very different – than it means to you.

    That said, I travel what I consider a ‘medium’ amount. I can comfortably diversify my stays across two programs, primarily SPG and Hilton. As much as I’d like to give more – much more – of my business to Hyatt, the lack of locations or the location of their locations, makes it difficult for me to make the switch. For this promo, I received the 5k/1stay bonus, which I think is fine considering that there’s a very small chance I’d be able to rack up either the number of stays based on my travel patterns to earn the large bonuses, but should be able to find at least one stay between now and the end of the year to achieve the bonus points.

    The point to your post, however, is that loyalty is relative to any given traveler. Again, you are ridiculously fortunate (as you’ve rightly admitted) to be able to widely diversify your points. From your perspective, how do you think those whose travel patterns are far less than yours and who have been giving Hyatt all of their business feel?

    Don’t get me wrong: it IS business. I get that. There are some businesses outside of the travel industry that are refocusing their efforts on serving customers the best way they can and let the profits/revenues take care of themselves. In other words, rather than have greed and profits and revenues drive their businesses, they are letting the notion of providing the best product with the best service in as many locations as possible relative to their customer bases drive their business; the customers will choose and those business thus realize they cannot be everything to everybody. Many are achieving success in this approach. Wish the travel industry would follow suit with this. It’s one of the reasons (in the aspect of greed and revenue-drive) that I wish companies like Delta (mega’s) failure to the point they realize that was the wrong approach.

  26. If you can meet the 20 nights requirement, I sugges you give them a call. I just called Hyatt Diamond line and the rep manually registered me for this promotion. It sounds like there are seven different targeted fall promotions going on but a rep can only manually register you for the 20nights/50k offer and not the other offers.

    This is odd though. I mean if reps can manually register diamond members (not sure about those with other status/no status) then why not offer it in the first place? Unless Hyatt changed its mine due to the brouhaha over the fall promotion?

  27. @ Rivarix – didn’t get any emails but a supervisor told me that I was eligible for “8000 points after 2 stays” promo; however, she said that I couldn’t be switched over to another promo. Would highly prefer 50000-point promo but I guess I will have to complete my 12 nights for Diamond Challenge and switch back to SPG.

Leave a Reply

Your email address will not be published. Required fields are marked *