The Loyalty Podcast
Newscast 5 - Sonesta Travel Pass and the Empire State Building
In the saturated world of hotel loyalty, how can you make an impact in best-customer relationships? Rick Ferguson chats with Sonesta Hotels' Kevin McCarthy about the opportunities and challenges of relaunching a loyalty program in a crowded marketplace. Also, Rick debuts the launch of the Empire State Building Ambassador program and Iain Pringle explores the explosive growth of retail media with SG-Retail's Steve Gray.
- Duration:
- 34m
- Broadcast on:
- 11 Aug 2024
- Audio Format:
- mp3
(upbeat music) This loyalty newscast is brought to you by Niax Coinbridge, turning loyalty into currency instantly, spendable any shop worldwide. (upbeat music) (upbeat music) Yes, the team are here all fired up and ready. It's the loyalty newscast for the week of the 12th of August. I'm Katie Topping, introducing two industry giants, Rick Ferguson and Ian Pringle, who this week are bringing you a cross-industry Xtravaganza, the top store is hitting retail, travel, and the real estate sector. First up, Rick explores the exciting NFT-based loyalty program of a famous New York City landmark. Ian brings you a follow-up from last week's loyalty podcast, looking at retail media, and we bring you the inside story behind the recent launch of Sinesta's Hotel's new combined loyalty program and booking site, Rick has the exclusive there. Another look at the data and the latest edition of sponsor love will bring us bang up to date. Starting as we like to, here's Rick Ferguson with this week's loyalty headlines. - Thanks, Katie, I don't know if I'm an industry giant, but I will take the compliment. Hello all you loyalty mavens out there, I'm Rick Ferguson, and here are your loyalty headlines for this week. We're diving into the world of consumer privacy with some headlines that are shaking things up in the data collection arena. Let's take a look. First up, you might have heard that Google has pulled a bit of a U-turn. After years of planning to phase out third party cookies, they've decided to keep them around a bit longer. It's a surprising move really considering Google has spent years hyping its privacy sandbox initiative. Now, they're promising new ways for Chrome users to manage their personal data. So what's the deal? Well, it turns out that the alternatives to cookies just aren't ready for prime time and when you're dealing with a $667 billion global digital ad market, you need solutions at scale. In other news, business software giant Oracle has found itself in a bit of hot water. They've agreed to settle a consumer privacy lawsuit for $115 million of parking ticket, you might say. But here's the kicker. As part of the deal, Oracle will shut down its ad tech business and stop creating those digital dossiers on consumers. The big takeaway here, if surveillance tech is on its way out, then brands will have to pivot towards zero and first party data strategies. Switching gears to online retail, Etsy is testing the waters with a paid loyalty program called Etsy Insider. They're hoping to boost sales by deepening connections with their top customers and, of course, collecting that all important first party data to power their AI projects. Across the pond, UK retail bank Barclays is shaking things up as well. They're ditching cash rewards in their blue rewards program in favor of perks like Apple TV+ and Major League Soccer subscriptions. Meanwhile, financial app Revolut has rolled out REP points, a new loyalty program spanning Europe. Customers can convert their points into airline miles or get discounts on travel and experiences. And with 40 million users on board, that's quite the offering. Those are your loyalty headlines for this week. Now if you'll excuse me, it's time to ask my wife why my Facebook feed is suddenly full of Nordstrom ads. [MUSIC PLAYING] Does a city skyscraper, even a world famous one, really have loyal fans? If that skyscraper is New York City's Empire State Building, then the answer is decidedly yes. Decaded to the famous landmark's best customers, the Empire State Realty Trust recently launched the ambassador program, a tiered offering built around NFT-based rewards and exclusive access. To discuss the program's launch and goals, Rick Ferguson spoke with Abby Rickards, senior vice president of marketing, public relations, and digital at the Empire State Realty Trust. As Rick learns, building loyalty to a building offers exciting opportunities to innovate. Hi, Abby, and welcome to the program. Obviously, my first question must be, are you in the Empire State Building right now? Thank you for having me. Everyone always asks that. I'm actually in another building next door to the Empire State Building. Awesome. And obviously, we're here to talk about the ambassador program, which I believe you guys launched earlier this year, designed for locals who host guests in New York City, as well as super fans of the observatory experience. Can you describe a typical Empire State Building super fan? Yeah, so the typical Empire State Building super fan embodies kind of authentic New York City. There are lovers of history, architecture, pop culture, and entertainment. The Empire State Building does welcome millions of visitors every year and was recently named the number one attraction in the world. And number one in the US for the third consecutive year, Inship Advisors Traveler Choice Awards. Best of the best things to do. The ambassador program, it's a tiered program. There's a lot of benefits that you unlock as you earn points in the program. It's also an NFT based program. Can you talk about the NFTs and the design and the origin and perhaps a reaction of the members who have unlocked them? We launched in February of 2024, so this is super new for us. It's really still in its early stages, but we've already introduced five distinct NFTs, each corresponding to a different membership tier from ambassador to platinum. And we're now preparing to launch our next NFT, which is dedicated to our sunrise experience, which is a separate ticket product that we have at the Empire State Building. You can see the sunrise in the top of the Empire State Building. So far, the response has been pretty enthusiastic, and we anticipate even more interest as we continue to release new NFTs. And of course, that's just one part of the program. You also have exclusive access events. You've got lottery entries to celebrity and influencer stuff. You've got tickets to the observatory experience that you're giving away. Can you talk a little bit more about the event side of the program and how you hope that that will build emotional loyalty with your fans? Yeah. So I think it's important to note, the Empire State Building is a busy place. We have a lot going on. So we have the observation deck. We have two observation decks, 86 floor and the 100 second floor. And we host lightings. We host celebrities for media ops and photo ops. And each event at the Empire State Building that we offer to our members allows the members to fall more in love with the building and connect with the building even more. That's our goal. The membership program allows members access to celebrity visits and special events like lighting ceremonies that are not offered to the public at all. We've had visitors like Taylor Swift. We had Oprah come back December. And I would even say that really throughout the country, it's really rare for an attraction to have the robust program that the Empire State Building has. Our special ticketed offerings like the Sunrise Experience offer unforgettable views of New York City before the city wakes up. It's one of my favorite times to be at the Empire State Building is when the sun's coming up. And this is like a coveted bucket list experience and one that we think our members will really enjoy. The other event listed as a reward is participation in the Empire State Building run up, which is held annually each fall. The run up is a race comprised of about 500 runners who race up the building stairs. It's 1,576 stairs to the 86 floor. - Wow. - Is there observation deck? And we attract elite tower runners from all over the world to compete. - In addition to the observation decks and the fabulous art deco interiors, you're also kind of building a sense of community around the building amongst the fans and knowing that they're gonna have some special experiences at the Empire State Building. - People love the Empire State Building. They have an affinity for it. They, when they think of New York City in America, they think of the Empire State Building. So this membership is just a great extension of that. It's just made perfect sense for us to say, okay, we already have people signing up. They want to know everything that's going on here. Let's reward them with points and NFTs so that they can really feel that they're part of this ambassador program. And I also want to note too, is that the Empire State Building has changed so much. A lot of people say, I went when I was in seventh grade for a field trip and we recently underwent a $165 million renovation that completely reimagined the experience. Rick, if you haven't been, you have to come back. It includes a designated visitor entrance over 10,000 square feet of immersive digital and tactile museum quality exhibits. We have time ticketing, a reimagined 80th floor with additional exhibits and a 102nd floor that features floor-to-ceiling glass and 360 degree views. As we make the experience better, we have to build this community and really grow these super fans and connect with the people who make the Empire State Building who we are and grow the brand and grow the brand through these people who love the building just like we do. - It sounds amazing. And of course, it's early days, obviously, but I'm curious about your goals for the program, what sort of behavior shifts you're hoping to see and your fans and how do you plan on measuring success? - We're trying to make every guest feel like a valued member of this ESP family. And whether it's their first visit or their fifth visit, we want to make sure they always want to come back and bring their friends. Our goal is to continuously innovate and offer ESP members tokens and rewards that serve as like tangible mementos of their experience and encourage them to return. Success will be measured right now through direct feedback from our members through surveys, increased sign-ups and redemption of points and rewards. That's kind of where we're at for now. Obviously, we're always growing, we're always evolving. Those are how we're going to measure success, but I know that in a year, I'm sure those will change and will have more clear ways to build it as well. - I'm certain you will. And the last question is we wrap up. Obviously, the Empire State Building is, as you mentioned, a New York City icon. It's been featured in literally scores of films. I'm a film fan myself, my favorite appearance of the building in a movie is probably King Kong, but I'm also partial to the Andy Warhol film. That's eight hours of the Empire State Building. That's got to be catnipped to a super fan, but I'm curious if you have a favorite movie appearance of the Empire State Building. - So, I love them all, but if I had to choose, I would choose sleepless in Seattle. When I was a kid, I used to watch it with my mom when I was homesick and she would call it of work and we'd watch sleepless in Seattle and I really found memories of that. So, that's definitely my top Empire State Building movie, followed closely by Buddy V.L.F. (upbeat music) (upbeat music) - According to the latest predictions, the global retail media market is expected to increase by nearly $100 billion by the end of 2025, including a nearly 22% rise this year. That growth will vastly outpace the growth in nearly all other forms of ad spending. In this follow-up report, last week's loyalty podcast, Ian Pringle chats with SG Retail Steve Gray about the opportunities in retail media for loyalty marketers and the best practices for retailers, considering a move into this lucrative market. - The last few years has seen explosion the growth of grocery retail loyalty programs in almost every market. At the core of this change is the growth of retail media. To help explain this revolution, I'm joined by Steve Gray of SG Retail, who has worked in retail media projects for brands like Dunhamby, Tesco and Asda. Hi, Steve. - Hey, Ian, how you doing? - Perfect, really good. Thanks, Steve, and thanks for joining us today. Steve, as you've been involved in this from the start, can you please explain what retail media is and why it's become such a big topic of the day? - Yeah, I can. It's been a topic that actually has been around forever. I mean, ever since the first shops, the products that they sold, the brands who supplied them, have always wanted to advertise in and around them. But what's happened over the last few years is the topics really exploded. And what's behind that has been the success that Amazon have achieved in diverting brand spend away from Google and Meta and bringing that on to their own site through what's now called retail media and particularly through the innovation of sponsored product ads. And as other retailers have seen how successful they've become and they're making over $40 billion a year now from selling sponsored ads and other ads on their site, they've looked to copy that. And we've seen an explosion in what are now called retail media networks. And that's happening all over the world. Your Walmart, Kroger, Randal, the network of Target in the US would be amongst the leaders in Europe. It's also been around for a long time. We built, well, probably the world's first advanced retail media network back in the day at Dunhamby Working with Tesco. And loyalty data was really at the core of that. But when we say retail media, what do we mean to answer your question? We're talking about adverts or ad spots, ad inventory that is owned by retailers or accessed by using a retailer's loyalty data. And that really could mean anything from a radio station in store, a customer magazine, adverts on supermarket trolleys, big poster sites in and around shops, display adverts on the econ site. And then increasingly, adverts that you might see on Facebook or on the open web that have been targeted using the retailer's loyalty data. And we're also now seeing ads appearing on ITVX or Sky or Channel 4 or other connected TV stations that have been linked behind the scenes to in an anonymized and data compliant way to other supermarket loyalty programs. - And this is now big money. So can you give us an indication of a type of money that this is generating for retailers? - Well, no one's really got a precise figure, but 200 billion is being talked about it. It really is a, you know, a big number. There's two kind of big sources of cash. There's the monies that brands have always deployed through their trading arrangements with retailers. But then there's also traditional advertising money, which increasingly is being diverted from traditional media and especially digital channels, the ones that I mentioned before, into supermarkets. And yeah, the latest estimates seem to think that that market is gonna reach 200 billion within a few years. - And what are the minimum requirements that a brand needs to have? - Yeah, this doesn't work well where you're predominantly selling own label. So I guess something like the gap in fashion or many fashion retailers or even, you know, own label retailers like, you know, most own label like white marks, dispensers, don't have the supply base with media and marketing budgets. But supermarkets and health and beauty and drugstores and pet retailers, they do where they've got suppliers like Unilever, Procter & Gamble, Coke, Nestle, PepsiCo, et cetera. You know, these are amongst the world's biggest advertisers. So, yeah, it's like combination of branded retailers with suppliers who advertise. And the bigger the retailer and the higher the market share, then the likely, you know, almost certainly the higher size of price for them. But, you know, this market is open to any retailer in any market of any size that has advertising inventory that's attractive to the brands that they sell. - Well, thank you very much for that Steve. This isn't this topic. We're going to keep returning to them. Still, we'll have you back again. So, thanks for your time. We'll speak to you again. Thank you. (upbeat music) - And now our spotlight on those companies who make this newscast possible. It's time for sponsor love. In this week's edition, Ian Pringle continues his discussion with Coinbridge by Niax CEO Guy Rosenhois with a focus on innovation in the customer loyalty space. As Guy tells it, successful innovation requires turning your focus outward from internal discussions to an understanding of your customer's key main points. - Hi, I'm joined today by Guy Rosenhois CEO of Coinbridge by Niax. The sponsor of this episode of the Lord's Newscast. So today, I'd like to talk about Niax has a long history of innovation. A lot of companies around the world struggle with innovation. It's not something that many companies do well. As Niax has such a strong, long history of innovation, can you talk about the keys to success that Niax has seen in this area? - The first thing that pops to mind is to answer you that the first step to innovation is to dare. You know, you can look at it as a hollow answer and a very high level answer. I think the first thing in innovation, except having the courage to, you know, cross the chasm and jump to the big sea, is to understand and try to find a void. If you look at Niax in the last 20 years and we've basically started with unattended payments and the big pain that we found 19 years ago is that we couldn't pay with card at a vending machine. It accepted only cash, only coins. So you find a void and you really need to dig into it to see that it's a real void. And you really need to talk to your target audience to understand that they really want you to solve that void because many companies do solve a void that maybe, you know, neglect the bomb or too small or too niche. And that's what we do. And you know, we have that history. It runs in our veins on a daily basis. We're looking for the pains. And I'll tell you more than that. I'll take you to the end game. Eventually, when we sell solutions, we actually are selling an answer to a pain. And by the way, I'm telling you to all of our salespeople, do not sell technology. Technology is the means. Technology is the differentiator. Your product is different. It has all the USPs over competitors. It's great, but you need to sell and answer a solution to the pain. - It's really good you said that. I mean, what my favorite book about startups in the world is a book called "The Mum Test" by Rob Fitzpatrick. What he talks about, he says, there's no point focusing technology. He said startups, all they do is focus on the pitch, the pitch, the pitch. He says, don't start with that. If I go to my mum and say, I've got this new idea for business, she's gonna say that's brilliant. I love it because she's my mum. And that's two things. She's lied to you and she doesn't give me any commitment. Where he says exactly what you said is, guys, start with the problem and go to your customers and say, what problem am I trying to solve? What problem am I trying to solve? Where is your pain points? And that's where to start, rather than start with the solution. - I agree. I'll give you an example about a division we built within IAC three years ago, CoinBridge. And CoinBridge basically started in the same way. We started seeing that some customers of ours, retailers, have a problem in allowing the customers to redeem rewards or points outside the brand. And generally we didn't even think about that. Who cares? They have this problem. We're selling part of sales systems. That's fine. We don't need actually to deal with that. But then we started talking to those big brands and we understood that there's a big void here. Big problem here cost a lot of money, lengthy integrations and nobody sorts it out. And we went to the drawing board, we drafted something and then we asked more questions. Eventually we defined that there's a void and that our customers really need it. And they will be willing to pay for a solution that simplifies everything. What we did with CoinBridge and everything we do with Niax is we take a design customer which represents a certain vertical market or region and we build a solution with them. They get benefits, they pay less. So they are the first to go out there to roll out a brand new solution. Or whatever, they enjoy being a design customer. But tactically, once you've identified a void and the pain and you have the answer, get a design customer and get to the market with that product. And that will also ensure a product market fit. A design customer will help you together because a lot of startups comes with a solution that may be answering a pain but not in the right way. And then they spend another two years strolling through customers and only then they may have a solution and it may be too late. - No, and I think CoinBridge and the loyalty market said absolutely perfect example of just exactly what you've just said. So thank you, merch guy and we look forward to speaking to you soon. (upbeat music) (upbeat music) - And now it's time for another look at the data. Those numbers and stats most critical to loyalty marketers. This week, we continue our look at the explosive growth of retail media. While generative AI may be at the top of the Gartner hype cycle, loyalty marketers know that the real action is in retail media networks or RMNs for those of you who are into the whole brevity thing. Now retail media has been called digital advertising's third wave after search and social. To put this third wave in context, RMNs are expected to move past old school linear television this year to become the third biggest channel for global ad spend. Globally, work media's latest global ad trends report revealed that retail media spend reached 128 billion dollars in 2023 and is expected to grow by 10% this year. In the US, advertiser perceptions predicts that retail media spend will capture nearly one fifth of all digital ad spend by 2025, while IAB forecast nearly 36% growth in Europe this year to hit a total of over 14 billion euros. And for the challenges to this growth, although MIMBY estimates that there are over 200 RMNs operating globally, that saturation has not prevented retailers from wanting a piece of the action. A recent Delight survey revealed that 64% of retailers plan to implement an RMN in the next few years, which will further complicate a fragmented market. And what about all of that sweet, sweet first party data required to fuel those networks? Delight also reveals data privacy and security as retailers top concern at 74% of retailers surveyed, followed by data governance at 58%. The good news, loyalty program data will remain critical to retailers hoping to cash in on RMNs. And that's our look at the data this week. We'll see you here next time. (upbeat music) (upbeat music) Travel loyalty news now. Sinesta International Hotels followed up its acquisition of the Red Lion Hotel Portfolio by launching a new combined travel pass loyalty program and booking engine for its best customers. Rick brings you the inside story of the new combined programs launch and rollout with Sinesta Hotels, Kevin McCarthy, Vice President of Loyalty, Cards, Partnerships, and CRM. Kevin reveals a successful program relaunch requires more than just a roadmap. It requires an organizational wide commitment to a successful rollout. - Hi, Kevin, and welcome to the loyalty newscast. But thank you so much for being on the program with us today. - Yeah, thanks, Rick. Thank you for having me. - Sinesta acquired the Red Lion Hotels Portfolio and you've now launched a unified loyalty program. Sinesta Travel Pass and it's now the singular loyalty program. I think it covers like 13 brands, 1,100 hotels. The integration seems like such a no-brainer that I wonder if there was ever any discussion of not integrating the brands into a single program. Is this an idea that you floated with members or is it just something that you knew that they wouldn't want? - Great question. We did certainly consider our options, but the decision to integrate was ultimately driven by what we knew our members would appreciate and what the Red Lion members would appreciate and benefit from the most. And when you think about, they were moving from hello rewards to Travel Pass. Travel Pass is a robust program that offered compelling benefits. Certainly richer and more complex than what Red Lion had offered. So we knew that offering these would be valued by Red Lion members. And then we know that our guest stayed a variety of brands for different trip purposes. And we really wanted to ensure our members could accrue and use rewards seamlessly across the expanded portfolio of brands. So offering flexibility, greater benefits. Then one unified program, we knew we'd enhance the guest experience, open the doors to introducing members to significantly more breadth in brands under the Sinesta portfolio. - In your mind, what is the key point of differentiation between the new Travel Pass unified program and your competitors programs? What aspects of the program are your loyal guests responding to? - You can really accumulate points rapidly and we deliver very, very strong exceptional value to Travel Pass members. And as a matter of fact, Wallet Hub just did a review of the top nine loyalty programs and Travel Pass was actually rated the highest for the heavy traveler. So the value that one gets from the program that a member gets is extremely strong. Also getting to status can happen much faster than in other programs. We really wanted to create a rich program to stand out. You can get to our top tier, which is Platinum with just 40 nights or 40,000 points. We have very generous multipliers. We also have a new credit card offer that we've put out where members can get 155,000 points in their first year. So it's a very rich program. And another thing that Wallet Hub had pointed out was that I think from 23 to 24, a lot of programs were actually pulling value away and we were the only brand they highlighted as having delivered incremental value. And I think that comes in large part due to the expanded portfolio that we have and people being able to use points at more places. - I'm interested in some of the technical challenges if any that you guys encountered is you integrated these separate programs, separate platforms, maybe different tech stacks into a new program and booking site. Were you integrating legacy systems? Did you build everything from the ground up? Was a combination of those things? - It's probably we don't hear this that often, but it was actually a very smooth integration. We had recently gone through a loyalty technology replatforming of TravelPass. And the work that was done, you know, led by our tech team was award-winning and the infrastructure that was set up. So with the development and the design of the new program, which was built to be, you know, super flexible, take into consideration, you know, the many PMS's that we had, we built a lot of flexibility and efficiency knowing that the integration was going to be coming down the road. The data migration was smooth and, you know, we wanted to ensure members had a seamless digital experience, certainly when logging in and booking their stay. And the integration also meant one unified website and channel marketing strategy. So that supported our overall digital strategy. - And then on the front end, you have the communications to members. So I'm interested in hearing a little bit about the communication plan, how you rolled this out to members. Were there any lessons that you learned during that process, best practices that you might be able to share with marketers who are undertaking similar integrations? - To the Hello Rewards members, we positioned this as Hello Rewards is now sent us to TravelPass. And Red Lion guests obviously, rather than talking about losing your old program, really dialed up all of the new benefits that were going to come with a new program and with our new points and tier system that they'd be getting on the Red Lion side. We gifted our higher value members bonus points so they could start using them kind of right away and get familiar with the TravelPass program. So we wanted to put that goodwill out there. We did have a multifaceted channel approach that really included all channels. So proactively messaged across email, social media, and our website. We emphasized clarity. It's critical with lots of benefits, even as rich as they are, you don't wanna overwhelm. And then with our existing easier messaging for our existing TravelPass members because they were going to be able to enjoy and expanded footprint with the addition of all the Red Lion hotels. So there was a lot of good news around and I would say just over-communicate. - In terms of the marketing push, obviously the program launched with a bang. You had a big sweepstakes. You can win a million points. You've got like, can win lifetime platinum status. You've got this consumer campaign with the actor Judy Greer, I believe, has that response been positive so far? Have you seen any kind of uptick in activity or even maybe some acquisition through those efforts? - Yeah, we have. We have. The response has been extremely positive and really played a crucial role in attracting new signups, which we've absolutely seen. We're seeing significant growth over last year and we're achieving the goals that we had set out. So we're seeing new member registrations, existing member registrations for the sweepstakes as well because it's really available to all, but we're seeing new enrollment as well as engagement with existing members. And I think it just kind of demonstrates the unified loyalty program and shows the success and the effectiveness of the overall launch strategy. - And just as a final question as we end our time together, if I would happen to win this million point sweepstakes, I already know where I'm going. My birthday falls on Mardi Gras. - Yeah. - In 2005. So I'm heading straight for the Royal Sinesta New Orleans on Bourbon Street, right? That's where I'll be if I win that million points. I know you're not able to enter the contest, but if you were and you won, do you have a destination in mind for where you'd head within the Sinesta portfolio? - Yeah, yeah. First of all, good choice, great choice on your part. One place on my bucket list, it's been on my bucket list for some time, is Machu Picchu. - Oh, wow. - And Sinesta has hotels in the Cusco area and in Peru. So I'd say I definitely spread some of my points there at our Posada's Delinka properties. - Whoever does win the million points sounds like they have a lot of great choices to choose from. So thank you so much, Kevin. Really appreciate your time with us today. And we'll look forward to hearing more about Sinesta Travel Pass soon. - That sounds great. Thanks for having me. I enjoyed our conversation. (upbeat music) - A decade ago, the relationships of over one billion consumers worldwide were managed by a roster of massively profitable third party loyalty coalitions. Air Miles and Aeroplane in Canada, Nectar in the UK, plenty in the US, payback in Germany, flybys in Australia, New Zealand. Today, most of these programs have either shut down or been absorbed by their biggest sponsors. In the next episode of the loyalty newscast, Ian Pringle and I will review the downfall of these programs and look at the future of loyalty coalitions with a roster of special guests and our second loyalty round table. Join us on August 26th for episode five of the loyalty newscast brought to you by Loyalty Wired. We'll see you there. (upbeat music) So that brings us to the end of this week's loyalty newscast ex-traverganza. I'm Katie Topping on behalf of Rick Ferguson and Ian Pringle. Thank you for listening. Until next time, do good work and stay in touch. (upbeat music) (upbeat music) (upbeat music) (upbeat music) [BLANK_AUDIO]