Wednesday, March 18, 2009

Miles, Points and Perks

I have a very special relationship with my American Express card, Hilton Hotels and American Airlines. They all give me points (at least one per dollar spent!), which I frequently redeem for free flights, hotel nights and Lakers tickets.

I selected brands and began collecting points five years ago - and I've become so tied to their promises of free hotel nights and roundtrip tickets that I’m incapable of trying cute new boutique hotels, flying the hip upstart airlines, and using a Visa card for business purchases. What if I don’t make my status this year?!?

These psychological wonders – aptly named Loyalty Programs - began in 1981 with the launch of the American Airlines AAdvantage program and have gained steam over the last few decades as companies realized the fiscal benefit of retaining current customers to the cost of wooing new ones. According to Jonathan Barsky, a consultant for the hospitality industry, in 2007, 37% of guests said that the loyalty program was a key factor in deciding where to stay. Not a shabby statistic.

But that ever-steady number began to decline in the first nine months of 2008.

Could this down-turn be attributed to cost-cutting measures that resulted in decreased service, added blackout dates, and fewer perks? Or an outcome of a slowing economy? Yes.

But I also think part of it may be due to a new generation of younger, savvier consumers who expect more from their brands and are willing to pay for an experience that is important to them. Many of these brands don’t have the old-school loyalty programs we have become accustomed to – and that’s probably what adds to their appeal.

Now that there’s been a nationwide shift in saving vs. spending, maybe the added benefits of traditional loyalty programs seem more important - fiscally, a free breakfast might outweigh the desire to sleep in a room with solvent-free paint.

As I begin planning my spring travel season, I wonder… should I stick to the comforts of priority boarding, first class upgrades and free nights at the Hilton? Or do I venture off for an exciting personal experience at a trendy hotel via an airline that offers a healthy food choices and internet access? What are you planning to do this year?

Either way, I know I will be charging it to my American Express card, whose Membership Rewards program only seems to get better with age - and gets me great seats to see the Lakers.

Thursday, March 12, 2009

Fight, Fight, Fight

I have a weakness for romantic comedies. Actually I love them and will watch them over and over again on Sunday afternoons.

One of my favorites is “You’ve Got Mail” – a late 90’s Nora Ephron classic starring Meg Ryan and Tom Hanks, who play NYC business owners who are unlikely opponents in the highly competitive world of book shops.

Unbeknownst to them, the two protagonists share an insightful and supportive relationship via email and swap business advice online. One of the classic bits of advice from Tom to Meg: “Go to the Mattresses,” since, “It’s not personal, it’s business.”

In this fight-or-flight business climate, many small business owners are going to the mattresses in an effort to save their beds. When perhaps what they should be focusing on is how they can make their business relations more personal.

I think that a major saving grace for many small businesses over the next year will be in the ability to develop the “personal” side of operations. Positive relationships with clients, vendors and investors have always been good business, but in this downsizing economy it is so much more important to stay close. And as a pretty likeable gal who strongly trusts the value of personal relationships, I can’t help but hope this predisposition will be helpful for my business.

This belief was further confirmed this week when I talked - on the phone! – to three individuals who are crucial to the wellbeing of my business. After chit-chatting about this and that before delving in to issues of relevance, all the conversations ended with some added-bonus for my company: crucial advice for a bid proposal, the continuation of much-appreciated free services, and an almost-done deal.

What I’ve always known, but just acutely realized, is that when people like you, they will go the extra step – or mile – to help you succeed. And in this fragile business climate, it can make or break a small business.

I would like to think that if “You’ve Got Mail” was released in 2009, the Tom-to-Meg advice would be something like, “It’s business – make it personal.” And of course that would come right before they realize they are in love with each other.

I say let’s leave going to the mattresses for more exciting things – like good sex and sleeping in on Sundays.

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