Case Study: Using Online Community to Crowdsource Customer Loyalty Strategy
Posted By: Lauren McKay
With 52 million members, InterContinental Hotels Group¶s (IHG) loyalty program, Priority Club Rewards, enables guests to earn points when checking in at nearly all IHG¶s 4,500 hotels worldwide. The Priority Club Select Visa, the credit card connected to the loyalty program issued by Chase, serves as an extension of the IHG brand and lets members enjoy greater rewards and loyalty status at establishments such as Holiday Inn, Candlewood Suites and Crowne Plaza Hotels & Resorts. Background In the spring of 2009, IHG and Chase planned to relaunch the Priority Club Select Visa and wanted more conversational feedback and insight into new card features than traditional market research could provide. They turned to Communispace, a provider of private online communities, to rally a pool of
300 current Priority Club Visa cardholders willing to share their opinions on what card benefits and services are important. Challenge IHG and Chase kicked off the Priority Club Rewards community in June 2009. The goal was to align the new loyalty product with what core customers revealed as valuable traits in a ³top-of-the-wallet´ credit card. They wanted to explore rewards benefits such as free hotel stays and needed to find out how much of an annual fee customers were willing to pay on the card. In terms of card usage, ³We weren¶t seeing as high engagement as we would have liked to have seen,´ said Sari Bernardo, alliances marketing manager at InterContinental Hotels Group. Over the course of a year, IHG and Chase set out to talk to customers about their experiences with credit cards²what drives their usage and what specifically Priority Club Rewards and Chase could provide to capture more of their customer¶s current spending. The team set an objective to double card penetration among its loyalty members and focus on the elite tier of its customer base²frequent travelers who hold Gold and Platinum reward status in the loyalty program. Strategy With help from Communispace, IHG and Chase walked community members through various scenarios and asked their thoughts about annual fees, rewards and loyalty-point redemption. The Priority Club team sought to engage cardholders with a variety of card usage, but it especially wanted to hear from customers who have a card but don¶t use it on a regular basis. ³Our primary objective was, how do we get this new product right?´ said Andrew Light, director of the IHG partnership at Chase Card Services. The
discussions included design, marketing materials and ³how we talk about features and benefits,´ Light said. Seeking to boost customer spending on the card and acquire new qualified cardholders, IHG and Chase focused on implementing new features that community members expressed were of value to them. For instance, community members suggested a new reward: an annual free-night certificate that could be used worldwide with no black-out dates. They also encouraged the Priority Club team to offer no foreign transaction fees when using the card abroad. In addition to IHG-related benefits, it became clear to Chase and IHG that in order to drive engagement and regular spending with the Priority Club Select Visa, they needed to give consumers something back for everyday purchases. They introduced product rewards for cardholders that gave two points per dollar on gas, grocery and dining purchases. When cardholders spent with IHG, they earned five points per dollar. One community member, Bernardo recalled, did the math to see how many points he would earn by using his card, which he would redeem for a free night at Holiday Inn. ³Free nights are actually obtainable in a reasonable amount of time,´ the member concluded. From the new-benefits discussion came the question as to whether community members would be willing to pay a higher annual fee in exchange for greater value. IHG and Chase proposed a $49 annual fee²up from $29 on the legacy credit card²to balance the program¶s new benefits. ³The annual free-night certificate justified that cost for them,´ Bernardo said.
Results Before officially launching the card in June 2010, IHG and Chase ran its marketing materials by the community. Members advised the team on features to tout and even helped pinpoint the imagery for the credit card¶s official landing page. Chase and IHG promoted the card through multiple channels. Email offers delivered particularly strong results. The initial email campaign for the new product yielded an 80% increase in new accounts when compared to the previous 2010 email campaign for the legacy card product. Chase and IHG also saw a 53% lift in the response rates from existing customers opting to upgrade to the new card. Also, 50% of cardholders who upgraded to the new product switched from a previous no-fee version of the card. Key Takeaways The Priority Club Rewards online community demonstrated the power of crowdsourcing to give customers what they truly wanted. For IHG, the customer community also acted as a sounding board for ideas and topics related to the hotel chain. Customers voiced several customer servicerelated issues, for instance, and IHG and Chase helped work out a few billpaying glitches. IHG said it has begun to notice residual benefits²lifts in both spending and activity with the card. ³We¶re attracting a different type of customer than we did from our legacy product,´ Bernardo said. ³We¶re attracting even more elite members, those Gold and Platinum very frequent, heavy business travelers.´ IHG and Chase have been able to optimize their communications and marketing efforts because of insights from the community. For example, the majority of community members argued against Priority Club Rewards
marketing the product via social networks, citing it ³too commercial´ for that type of environment. Next Steps Six months later, the Priority Club Rewards community remains live and has no intended stop date. The community will continue to serve as a learning mechanism for Priority Club Rewards, helping with both ideation and customer service. ³The community,´ Light said, ³will help us with innovation to keep the card µtop of wallet,¶ fresh and valuable, and keep us ahead of the marketplace.´ Currently, the team is engaging the community on the reward-redemption experience and how it affects cardholder satisfaction.
Discusses the case study focused on using the online community to crowdsource customer loyalty strategy
IHG and Chase kicked off the Priority Club Rewards community in June 2009. The goal was to align the new loyalty product with what core customers revealed as valuable traits in a “top-of-the-wallet” credit card. They wanted to explore rewards benefits such as free hotel stays and needed to find out how much of an annual fee customers were willing to pay on the card.