The Triangle of Win
A classic example of Access Pricing - one of the most cost-effective tools in a loyalty marketer's toolkit - offering a benefit only to selected, profitable, loyal customers.By Brian Woolf
August 31, 2008
You deserve a break away!
This paraphrasing of McDonald's jingle (of almost four decades ago!) rang the doorbell to my memory while on a recent trip to Europe. As a perpetual student of how to use differentiation to strengthen a retailer's brand, I was delighted to discover a creative loyalty builder, one that has been working successfully since the start of the century.
The concept is simple: a retailer offers qualified customers the opportunity to Take a Break Away at an Every Day Low Price (one lower than those offered by the well-known web hotel price discounters). It's a classic example of Access Pricing, one of the most cost-effective tools in a loyalty marketer's toolkit - offering a benefit only to selected (ie, profitable, loyal) customers.
In fact, the only cost to the retailer, I discovered, is promoting the Break Away. The behind-the-scenes, low-key program provider, Loyaltybuild, negotiates the volume supply of rooms from hotels and motels and operates the room-booking platform. The booking fee it charges the hotels and motels covers its costs and profit requirements.
It struck me as the Triangle of Win because:
- The customer wins by taking a Break Away at a lower-than-regularly-available price,
- The retailer wins because this sector-exclusive offering in its own name builds both customer and brand loyalty, and
- The hotels and motels win by increasing their occupancy rates and contribution to profits.
From a customer's perspective, what impressed me most were the program's simplicity and ease of operation. Room bookings (offered as 2-people, 2-night Break Aways) are made in an unbelievably simple 1-2-3 step process. The 3-4 star accommodation range offered is all at the same EDLP rate, regardless of star rating (with one fixed price for summer, another for winter.) The Break Away accommodation offering is within driving distance of the retailer's market area, although most of the European retailers offering this program featured additional Break Aways in favorite cities like Paris.
And the program is not just for retailers. An insurance company offers the program as a nice thank you reward to its customers. I could imagine banks seeking to strengthen customer ties doing likewise.
Like Tesco's clever but accurate understatement, Every little helps, this program, too, serves as yet another arrow in a smart retailer's quiver of differentiated loyalty builders. As we all know, it's not just one differentiated benefit that builds customer loyalty, it's the combination of benefits, all easy-to-understand and executed well. You deserve a break away captured my imagination and fills that requirement.
About the author...
The techniques and metrics Brian Woolf has developed have become guiding principles for those operating some of the world's most successful programs. He is the President of the Retail Strategy Center, and has consulted, and spoken at conferences, in the US, Europe, Japan, and Australasia.
Prior to his total commitment to loyalty marketing, his corporate roles included Deputy Managing Director of Progressive Enterprises, a major New Zealand retailer; and Chief Financial Officer of Food Lion, a leading US food retailer. He has an M.Com. (Economics) from the University of Auckland, New Zealand, and an MBA from the Harvard Business School.