This piece is a reaction to an earlier fireside chat with Asia Miles CEO Stephen Wong. In that article, Wong said he had rebuffed the advances of potential partners who wanted to make Asia Miles into a more liquid reward, akin to virtual currency.
Some key frustrations with loyalty marketing today, and for many years if not decades, are:
- Programmes are becoming incredibly complex and it’s difficult to understand what you earn through a certain action and what it will cost to burn points.
- Even if you have points/miles, you can hardly burn them on anything.
- 'Generosity' is gradually declining—you need to spend or fly more to earn.
- Most travel loyalty programmes are geared towards high-end corporate travellers, not the mass market of leisure travel.
Reward-U, the loyalty programme HK Express launched on 14 April 2016, sees a significant opportunity in addressing these frustrations, and with 1 million members in just over a year, we believe we may have struck the right formula.
A loyalty programme for savvy millennial consumers
The needs of the growing millennial segment are overlooked. Existing frequent flier programmes target top-tier corporate business travellers, with rewards based on mileage flown. Reward-U came into existence to tackle this issue.
The programme was launched to provide a meaningful and efficient way for millennials—underserved in the loyalty market—to be rewarded for everyday spending with loyalty points as a virtual currency.
Young consumers today are reprioritising fulfillment and seeking unique experiences, such as travelling spontaneously to pursue enjoyment in life. However, frequent flier programmes lack simplicity that creates value for these consumers. Complicated mileage calculations, limited tradability across partners, and restrictions that prevent members from redeeming the most convenient flights—these are all barriers for young consumers who are not frequent fliers with status, but still have significant spending patterns that are meaningful in the loyalty market.
To cater to these needs of the millennial consumers, a virtual currency with transparency, liquidity and flexibility is needed.
Incentivising via a virtual currency is the way forward
Our programme is dollar-based, which means points are earned based on the dollar amounts spent. There is no ambiguity and no complication, because HK$1 explicitly equals to 10 Reward-U points.
A transparent reward programme tied to a monetary value is the way forward, because the value of the rewards then becomes clear. This allows our members to squeeze the most out of their spending and truly maximize their enjoyment.
Also, it would be difficult to assign a non-monetary value to products and services in categories such as accommodation, transportation, leisure, telecommunications, finance, insurance, and e-commerce.
High liquidity, with the ability of the points to be used across different partners with few limitations, makes burning more efficient.
Addressing another barrier for millennials, with a real-time reward chart that is tied to the availability of HK Express air tickets, our members can also enjoy ‘any seat, any flight, any time' redemptions, putting an end to blackout dates and waitlists. This type of feature also benefits the airline, because it reduces waste, optimises the load factor and maximises efficiency. It’s a win-win situation and we’re planning to help more airlines roll out Reward-U as a common loyalty programme.
Steven Greenway is CEO of Reward-U