Case Studies Accelerated Loyalty Status Promotion

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	Accelerated Loyalty Status Promotion

Accelerated Loyalty Status Promotion

Technology Category	Analytics & Modeling - Predictive Analytics Analytics & Modeling - Real Time Analytics
Applicable Functions	Business Operation Sales & Marketing
Services	Data Science Services System Integration
Challenge	A global multi-brand hotel company with a large loyalty program introduced an accelerated loyalty promotion, in which it offered select members accelerated tier advancement if they stayed at least three times during a 90-day promotional period. The company expected the offer to drive stays in the short-term, but wanted to measure the long-term impact of the loyalty offer. The hotel sought to understand whether members had incremental stays after the promotional period or if they simply reverted to the stay behavior they exhibited prior to the offer. The company sought to deploy this offer to a limited subset of members given the costs (such as free nights) associated with giving guests higher loyalty status. Further, the hotel wanted to avoid over-diluting the standard path to achieving this top loyalty status. As such, the company planned to limit distribution of this offer to the 5% of customers within its mid-level loyalty tier that were predicted to respond best to the program, but struggled to confidently identify those top customers. Read More
About Customer	The customer is a global multi-brand hotel company with a large and established loyalty program. This company operates numerous hotel brands ranging from economy to luxury segments, catering to a diverse clientele. The loyalty program is a significant part of their customer retention strategy, offering various perks and rewards to encourage repeat stays and direct bookings. The company is known for its innovative approaches to enhancing guest experiences and driving customer loyalty. With a substantial number of members in its loyalty program, the company continuously seeks ways to refine and improve its offerings to maintain a competitive edge in the hospitality industry. Read More
Solution	Using APT’s Test & Learn software, the client designed an in-market business experiment to analyze the revenue impact of the accelerated loyalty offer. The software compared 'test customers' who received the offer to highly similar 'control customers' who did not receive the offer, in order to isolate the incremental impact of the program. APT’s rigorous test vs. control analysis showed that the accelerated loyalty offer drove a 52% lift in room revenue per customer. Diving deeper, the software revealed that the majority of this lift came from incremental stays, although room revenue per stay also increased among test customers. Further, weekday stays, rather than weekend stays, were the primary driver for the increase in stays. Breaking the results out further, the software identified that Economy and Full Service brands drove a larger portion of the lift than Luxury brands. Additionally, bookings through direct channels such as web and mobile increased while bookings through OTAs decreased, indicating that the program successfully caused a shift to direct channels. The software then automatically analyzed hundreds of customer attributes, such as prior booking behavior and demographic descriptors, to identify characteristics associated with a higher revenue lift from the program. Specifically, the software revealed that the accelerated loyalty offer performed better among customers who belonged to the loyalty program longer, who stayed at the company’s hotels more often before receiving the offer, and who were older. Read More Log in to view content
Contents

Technology Category

Analytics & Modeling - Predictive Analytics

Analytics & Modeling - Real Time Analytics

Applicable Functions

Business Operation

Sales & Marketing

Services

Data Science Services

System Integration

Challenge

A global multi-brand hotel company with a large loyalty program introduced an accelerated loyalty promotion, in which it offered select members accelerated tier advancement if they stayed at least three times during a 90-day promotional period. The company expected the offer to drive stays in the short-term, but wanted to measure the long-term impact of the loyalty offer. The hotel sought to understand whether members had incremental stays after the promotional period or if they simply reverted to the stay behavior they exhibited prior to the offer. The company sought to deploy this offer to a limited subset of members given the costs (such as free nights) associated with giving guests higher loyalty status. Further, the hotel wanted to avoid over-diluting the standard path to achieving this top loyalty status. As such, the company planned to limit distribution of this offer to the 5% of customers within its mid-level loyalty tier that were predicted to respond best to the program, but struggled to confidently identify those top customers.

About Customer

The customer is a global multi-brand hotel company with a large and established loyalty program. This company operates numerous hotel brands ranging from economy to luxury segments, catering to a diverse clientele. The loyalty program is a significant part of their customer retention strategy, offering various perks and rewards to encourage repeat stays and direct bookings. The company is known for its innovative approaches to enhancing guest experiences and driving customer loyalty. With a substantial number of members in its loyalty program, the company continuously seeks ways to refine and improve its offerings to maintain a competitive edge in the hospitality industry.

Solution

Using APT’s Test & Learn software, the client designed an in-market business experiment to analyze the revenue impact of the accelerated loyalty offer. The software compared 'test customers' who received the offer to highly similar 'control customers' who did not receive the offer, in order to isolate the incremental impact of the program. APT’s rigorous test vs. control analysis showed that the accelerated loyalty offer drove a 52% lift in room revenue per customer. Diving deeper, the software revealed that the majority of this lift came from incremental stays, although room revenue per stay also increased among test customers. Further, weekday stays, rather than weekend stays, were the primary driver for the increase in stays. Breaking the results out further, the software identified that Economy and Full Service brands drove a larger portion of the lift than Luxury brands. Additionally, bookings through direct channels such as web and mobile increased while bookings through OTAs decreased, indicating that the program successfully caused a shift to direct channels. The software then automatically analyzed hundreds of customer attributes, such as prior booking behavior and demographic descriptors, to identify characteristics associated with a higher revenue lift from the program. Specifically, the software revealed that the accelerated loyalty offer performed better among customers who belonged to the loyalty program longer, who stayed at the company’s hotels more often before receiving the offer, and who were older.

Impact #1	The accelerated loyalty offer drove a significant lift in room revenue per customer.
Impact #2	The majority of the revenue lift came from incremental stays, with weekday stays being the primary driver.
Impact #3	Economy and Full Service brands saw a larger portion of the revenue lift compared to Luxury brands.

Impact #1

The accelerated loyalty offer drove a significant lift in room revenue per customer.

Impact #2

The majority of the revenue lift came from incremental stays, with weekday stays being the primary driver.

Impact #3

Economy and Full Service brands saw a larger portion of the revenue lift compared to Luxury brands.

Benefit #1	The accelerated loyalty offer drove a 52% lift in room revenue per customer.
Benefit #2	The targeted rollout of the program increased the value of the loyalty offer program by nearly $70MM annually.

Benefit #1

The accelerated loyalty offer drove a 52% lift in room revenue per customer.

Benefit #2

The targeted rollout of the program increased the value of the loyalty offer program by nearly $70MM annually.

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Overview

Accelerated Loyalty Status Promotion

Operational Impact

Quantitative Benefit