There are more brands across more categories than ever before, and a seemingly unlimited supply of reviews, recommendations, likes, aggregators, and now chatbots to help us choose. In a world of endless options, why be loyal when there’s so much to explore? In this panel discussion live from SXSW, Heather Stern unpacks this and more, alongside Ari Levin, Vice President of Strategy and Partnerships at Hyatt Hotels, Jonathan Clarkson, Vice President and Head of Marketing at Southwest Airlines, and Georgie Jeffreys, Director of Marketing for Uber Eats North America.
Heather Stern: We live in a world of endless choice. There are more brands across more categories than ever before, and a seemingly unlimited supply of reviews, recommendations, likes, aggregators and now: chatbots, to help us make our brand decisions. While be loyal to any one hotel chain when we have TripAdvisor ratings and Expedia bookings? Why be loyal to one airline when we have Google Flights and can see prices and on-time percentages for any route we want? And why be loyal to a single delivery service when there are more options just a swipe away?
In short, is our loyalty to brands dead? I decided to tackle this question with the experts and take the debate to SXSW. Joining me on stage was Ari Levin, Vice President of Strategy and Partnerships at Hyatt Hotels, Jonathan Clarkson, Vice President and Head of Marketing at Southwest Airlines, and Georgie Jeffreys, Director of Marketing for Uber Eats North America. Today’s episode is the live recording of our conversation. I hope it sparks inspiration for how you think about driving loyalty for your own brands, and prompts reflection on the why behind the choices you make each and every day. Without further ado, live from SXSW is our panel discussion: Is brand loyalty dead?
Heather: Let’s dive in. Loyalty can mean many different things to different companies and to different individuals. So, how does your organization think about and define loyalty and, we can’t talk about it without also talking about the pandemic and how things have changed. So I’d love to hear from each one of you to start, and we’ll start with Ari.
Ari Levin: So we really think about loyalty as people preferring to stay at our hotels over our competitors. And that could be driving that extra mile because they know that the experience that we’re going to give is consistent. And it means booking within our own channels and, you know, telling their friends about it. So we’ve seen in the travel industry post-pandemic that loyalty is actually even more important than it was pre-pandemic. And our loyalty members are even more active than ever. It’s become even more important as a company for us to succeed post-pandemic.
Heather: And the biggest shift in the way you’ve thought about it, if at all?
Ari: I think the biggest shift is that coming out of the pandemic, people really want to feel and get unique experiences. There’s still pent-up demand, even as the world has opened up, and they really want to go to a hotel and be it—whether it’s celebrating a special occasion or experiencing something unique about the culture—they really want to embrace every minute that they are there and get a unique and fun experience.
Heather: So Georgie, we were talking earlier about the way in which Uber has thought about loyalty and maybe how that’s evolved and how you define it. So I’d love your perspective.
Georgie Jeffreys: Yeah, certainly. I think we’re probably in quite a different position to both Hyatt and Southwest, in that Uber is a relatively young company. Uber as a total company has been around for 14 years, but Uber Eats has only been around for seven years. And so prior to the pandemic, we had only operated in the US for less than four years. And essentially what that means is that for the past seven years, we’ve been primarily focused on acquisition, and that acquisition has led to our hyper-growth. As we come out of the pandemic, you know, certainly it’s no secret that Covid very much accelerated the growth of online food delivery. And as we come out of the pandemic, the situation that we find ourselves in now is that we actually have very high levels of new user penetration, so the total number of Americans have tried online food delivery; but the category is still very, very nascent. And so what we think most about isn’t actually loyalty in the traditional sense, i.e., you know, a zero-sum game of using us over a competitor, but actually more about engagement and how do we make sure that you, Heather, have incremental reasons to use us beyond food delivery, versus using us versus, say, DoorDash or GrubHub, to get the same dinner order every night. So it’s quite different, I would say.
Heather: We’ll come back to you because I do want to talk about Uber One and kind of a shift from loyalty to subscription. Jonathan?
Jonathan Clarkson: So if you look at how travel, in particular—and I know Ari can relate to this, as well—has evolved post-pandemic, customers—and you guys probably experienced this, as well—are flying a lot less for business than they did before. But they’re flying more for leisure. So if you think about the average traveler’s pie of usage, a much higher percentage of that is spending their own dollars. So what that has led to is a much higher sensitivity, I think, for customers around making sure that they’re getting a good experience that is worth them investing their own dollars in. That’s changed the landscape of the airline industry, for sure. We at Southwest have always been on the leading edge of having flexible policies and products for our customers, and we’re actually starting to see our competition play in that space a little bit more than they did pre-pandemic. Whoever would’ve thought that change fees would actually go away? They primarily have, you know, even at legacy carriers, which you would never have thought that. So, I think that’s probably the biggest change that we’ve seen in post-pandemic and in terms of loyalty trends.
Heather: As we’ve noted, both of you, Jonathan and Ari, you know, you have formal loyalty programs and really think thoughtfully about how to craft those and how to evolve those. Uber’s kind of moved away from that and has introduced Uber One. Tell us about the genesis of it and what you’re hoping it can achieve for the brand at large.
Georgie: Yeah, certainly. So, for context, Uber is quite—I would say we operate as a highly decentralized company. So we have hundreds and hundreds of local operation teams all around the world that operate, even thousands, that operate across the thousands of cities that we’re in. And over time what that has meant is those decentralized operations teams kind of bubble up at a country level. And we were experimenting with loyalty programs along the way, particularly for transportation and mobility for Uber rides. As we came out of the pandemic, two things became true: one is that our Uber Eats business became a meaningful business, not just in, you know, in absolute terms, but even relative to our mobility company. And in part, again, that was just because of the accelerated growth that happened throughout the pandemic. The second thing that became true was, whilst there were definitely benefits to our decentralization, it became clear that some of the learnings and the things that we were doing around the world maybe weren’t cross pollinating as well as they could have. And we had, I think at the time, you know, a dozen or so, even more, just different membership programs that weren’t all informing each other. And so we made the decision that it would be best for the customer, first and foremost, for us to have one membership program globally that brought together both rides and delivery. And that’s what’s called Uber One today. So that’s our new program.
Again, I don’t know if I would describe it first and foremost as a loyalty program, I think we really believe that loyalty, i.e., you continuing to use Uber and Uber Eats ahead of the competition, is actually more about us, I would say, exceeding your expectations—not just in terms of the quality of the service that we provide, but also the types of offerings that we continue to expand into. You know, that is ultimately what will drive you to use us. Uber One essentially makes it a far more easier decision not only for you to use those products, but for you to use all of the products across Uber. And in that way it’s really about, you know, being of service; first to the customer, and then secondly, it’s about, you know, how we bring the two products together and make more use of our cross-platform advantages.
Heather: One of the things we were talking about as part of this is, and really at the heart of brand is, influencing and changing behavior and expectations. How have you found customers have responded? I know you had a big spot at the Super Bowl, and I think that was very well received, and I think also continue to have people see Uber in a much broader light. How do you convince people that, you know, they’re just doing what they’re doing and used to it to actually change their behavior, and what are you seeing as far as early results?
Georgie: Yeah, I think so, separative to one, in terms of changing behavior, in terms of the offerings, I think what we have done well consistently, you know, since inception is expand into products that naturally expand on your current usage. And so, how we’re changing your behavior compared to five years ago might feel like a really big leap, but actually compared to the behavioral changes you’ve made along the way, feel like a natural progression. For example, using UberX is now something everyone feels pretty comfortable with. Using Uber Pet is maybe not something that would’ve been your first use case, or even using Uber Reserve, which is actually about reserving your ride in advance to guarantee a certain price point and a certain pickup time, that’s on the mobility side. Delivery, even before this year’s Super Bowl, last year we did a very large Super Bowl campaign, which is all about Uber Don’t Eats. And it was about letting America know that we now sell things that you don’t necessarily eat; that includes toilet paper, that includes Gwyneth Paltrow’s vagina candle from Goop, and that was, again, it was about a natural progression in use cases versus a huge behavioral shift we’re looking for customers to make. And that, I think, has always been what we’ve played really well.
Uber one is a very new proposition for us, not only because it’s a membership program or a loyalty program that brings together both parts of the business, which we’ve never done before. It’s also just from a marketing and a branding point of view, it’s got its challenges. When people interact with Uber, they interact with us through apps. And so talking to them about something that is a little less tangible and it’s about how you connect both of your profiles in your apps, that is, from a marketing side—which is different to loyalty, I know—that’s just more of like a challenge for us and something that I think, you know, we’re getting a much better handle on and awareness and comprehension are increasing, but marketing membership versus marketing apps are two very different things, which is what we’re learning.
Heather: I think also, kind of core to brand, is if you’ve really built the brand to be purpose-led and values-led, you build up a lot of goodwill. And I’m looking at you, Jonathan, because we had talked about weathering difficult times, recovering from a crisis. You had some upset people in December, but yet—
Jonathan: Too many of them, to be exact.
Heather: —Tell us about the role that loyalty plays and how you addressed that in an authentic way, and do you feel like you’re fully behind that now?
Jonathan: Sure. I think when you have brand loyalty and you have a situation like the disruption, the operational disruption that we had at the end of the year, which was extremely problematic for, like I said, a lot of people. The fact that that loyalty exists gives you a chance to repair things, but it doesn’t assure anything.
Heather: You said, “never take it for granted.”
Jonathan: Precisely. And the way we tried to sort of reinvest in that and make sure that people were gonna give us another chance was really three-pronged. First of all, you can never give people that time back, you can never give people that occasion back. It’d be presumptuous to even suggest that we could. But what we can do is we can try to make it right, as right as we can. So, we delivered refunds and reimbursements as quickly as we possibly could. There’s actually a DOT-based rule that says that all of your refunds have to be repaid within seven business days, and reimbursements within 20 days. And we beat those thresholds in nearly every case – certainly met them. So that’s number one. Number two is you want to go over and above, and make an additional gesture of goodwill, which we did in the form of 25,000 Rapid Rewards Points, which is a little over $300 in credit on Southwest. So, not insignificant, but again, we felt like it was an appropriate gesture given the challenges that so many of our loyal customers had faced. And then the third piece, and probably the most important one, is you want to ensure that, it won’t be the last winter storm we ever have, but you want to ensure that we are well-positioned should, as something else like this happens again, that we won’t get caught in the rears and that we were going to be capable of handling such a challenging time. So, that’s really been the focus of what we’ve been calling brand restoration over the last six weeks or so, is to put tactics and plans in place to ensure that, should something like that ever happen again, that we’re going to be better equipped to serve our customers and make sure that people get to where they need to get to.
But that’s been the primary focus, like I said, over the last couple months. What I’ll share with you is, of all the people that were impacted, nearly half of them have since either taken a flight or booked a flight with us. Which I think is indicative of the fact that, yes, a lot of customers are willing to give us another chance. But you know, there’s an adage that we’ve all heard one way or another. The way I remember it is 10% of it is what happens to you, 90% is how you respond. And we’re definitely in the response phase right now. I just want to make sure that we deliver on that, for all of our customers.
Heather: Well, I appreciate just the openness, right? To talk about it and to be honest about how you’re all moving forward. And hopefully, you know, when you meet people and they find out they don’t have their story that they’re gonna tell you, you know, it’ll be…
Jonathan: Statistically speaking, there probably are stories out here.
Heather: So, Ari, you often talk about Hyatt punching above its weight, you know, as it relates to the fact that you’re sometimes smaller than your competitors, but what you have to offer, and particularly on the experiential front, is really incredible, especially as you look at the portfolio. How do you continue to keep things fresh for customers? How do you think about innovation and what needs to evolve, what needs to stay the same? Would just love to talk about how you continue to be the challenger and yet, at the same time, the leader.
Ari: For those that you don’t know, Hyatt has about 1200 hotels today. Our main competitors, Hilton and Marriott have five, 10x. So, we do constantly have to punch above our weight and differentiate. And I think it comes down to a few things. I’d say, the first is we pride ourselves in listening to our members. We listen to their feedback, the good and the bad, and we take that to heart in terms of how we want to evolve the company, but also our loyalty program. So, I’ll use an example: in the height of the pandemic, in summer of 2020, we heard that our members needed to get out of the house. Either, you know, you had a family of four and everyone was on Zoom, and you had young kids and you had them running around in the background of your Zoom call, and we had Deloitte consultants that were trapped in a small Manhattan apartment, and, like, that urge to get out. So, we took that and created a concept called Work from Hyatt. We had hotels that had honestly empty rooms and we created a concept where you could, in a safe place, bring your family, go alone—you have your room and you can take advantage of everything we had to offer as a hotel: a pool, outside yoga. And then you got a second room where you could do your work. And that kind of cobbled together, we didn’t have technology resources and we just figured out how to do it and it blew up like crazy. So, I think that’s an example of listening to your main customers and adapting to what their needs are. And again, that was wildly successful in the time where people needed to get out. And how do you capture that moment?
Jonathan: Think about how many spouses and significant others you made happy with that.
Ari: Hopefully saved marriages, we save families. I think the second area is we really try to celebrate when people are redeeming for free hotel stays. We know that that is a memorable occasion where you are choosing to use your points. Maybe you’re celebrating something, maybe you want to show your spouse, your family, all your hard-earned points and it’s your first vacation, or you’re meeting your family, or whatever it is. We know that when you are using your points, it is an important occasion for you. So, we try to celebrate that by making sure that your redemption stays are great. You don’t have to pay resort fees. You can use all of your benefits, whether it’s a club lounge pass, a confirmed suite upgrade, we don’t treat it any differently than a paid stay, which I think some of our competitors do try to do that. They count towards promotions. And again, really capturing that celebration because that is what you’ve earned your points for. I think it’s a philosophy that differentiates us from some of our competitors where we are really leaning in to make sure that redemption stay is the best stay you’ll have with us all year.
Heather: I love the idea of really focusing on those moments and making those moments amazing. And, as you said, treating them as you would a paid stay. And I think understanding what’s important to each individual—and personalization is a very important topic. We have so much data that sometimes we don’t know what to do with it. Would love to just hear from each of you briefly, how you think about personalization and how that might be changing. I’ll start with you.
Ari: So, I’ll kind of take two sides of this. I think data and AI and personalization is always going to be important and it’s always going to be more and more of an expectation of our members. And that could be anything, from making sure that we are interacting with you in the right channel because Member A likes to use our app and Member B likes to call our call center, and making sure that we’re interacting with you where you want to be. I think as—us in the hotel space, I mean, travel in and of itself, is a relationship and an intersection where people want to get together and experience what’s out there. So, I don’t see a time where you’re going to have robots interacting with people at the front desk; that’s not what the innate nature of travel is.
Heather: We’ll come back in 10 years, and we’ll see! [laughter]
Ari: So I think that will always be there. I think World of Hyatt was actually at the forefront a few years ago with trying to allow more choice. As you progress through our milestone rewards, at every 10 nights you could choose something. And again, why should we force you, at this night you want a free night, at this you want a gift card, at this you want more points? Let you decide. And so, I think that’s just an example of giving the member more choices, so ultimately they can decide what’s best for them—in that particular year and that particular trip. I could see that becoming more and more important as we evolve World Hyatt.
Heather: Great. Georgie?
Georgie: Yeah, this is a tricky one. I’ll say something that’s my own perspective, not necessarily a company line, but I think that personalization is definitely a double-edged sword. I know that when I log on to Netflix, I actually don’t like that it narrows my options. And the options that my partner has served are very different to the options that I have served. And I don’t always want to watch reality TV. When you are a tech platform that has thousands and thousands of options, personalization, if you believe that personalization is you opening the app and it’s going to serve you the very best option of what you anticipate that you want? You know, that is hard to do, and it takes a years and years of machine learning to be able to do very well. And so, I would say that there is always a balanced approach on our side about how we get personalization done well, but we don’t overstep it. And how we also focus as much on discoverability. Particularly when we’re operating within a category that is expanding quicker than I think what the consumer’s expectations are. I would say most people in the room maybe don’t use Uber Eats right now to purchase all of their grocery products, or even some of them. And so, what we need to do is be able to keep the potential for you to do so and for you to progress into grocery there, even though personalization right now, based on your current behavior might not lead you to that. There is a balance there. That being said, I’m not from Austin, I don’t live here and I’m sure if someone else is in the room’s not from Austin, if we opened our Uber Eats app right now, we would get served two very different experiences, in-app. And so there is obviously data that does inform “I like McDonald’s, I should probably see that McDonald’s is available 10 minutes away.” But you know, someone else in the room may not.
On the ride side, I think it’s a little easier because the breadth of products, whilst there are a lot of products, you know, there are more and more products available today on Uber that help you go anywhere that you want to go, and the way that you might want to do it, you know, that is expanding. But it’s still within a set of, say, 20 products. And so the fact that, when I’m on work trip – when I’m on personal trips I always take my dog with me, means that Uber pet will show up pretty prominently, whereas is it may not for someone else. And so the personalization there starts to become much more seamless, as part of the experience. So it’s two sides to that coin.
Heather: Yeah, I think the loss of discoverability and surprise and delight, which is used over and over again, but I think people still really crave it. I think that’s a really good point. Jonathan?
Jonathan: I certainly agree with the everything that Ari and Georgie said there, in terms of the importance of personalization and the dichotomous nature of it. The only thing I’ll add is just talking a little bit about the manifestation of personalization. Where we, and where I think my colleagues probably spend a lot of time is, ensuring that the mobile environment is as personalized as it can be. And specifically, around the mobile app. If you think about when you’re flying, what the app should do and how we should personalize your app experience when you’re booking a ticket three weeks out is very different from what the app should do for you on the day of travel. So we spend a lot of time thinking about, what purpose we’re trying to serve for you at what point in the journey, and then ensuring that we have the right idea there that we’re personalizing it and making it as relevant to you, based on what we know about you.
Heather: Switching gears around—what we talk about as collaborative advantage: thinking about the partnerships, who you’re affiliating with; it’s very core to a lot of what brands are doing and seeing advantage in. Where do you see untapped potential as it relates to partnerships? How do you approach it? Jonathan, one of the things we continue to come back to is the filter with which brand becomes as to how you choose. So, would love to kind of hear how you’re approaching that and, if you have a dream collaboration that you want to put out in the world, I’ll ask each of you that.
Jonathan: Yeah, I think it’s a great question. I mean, certainly there are traditional partnerships that we contemplate, whether it be with a rideshare partner or with a hotel partner. When you think about the air occasion and then the other things that typically come with that—what are the other modes of transportation or ground resources that you’re gonna need during that trip? Those are sort of obvious partnership opportunities. I think where the untapped potential is actually maybe in finding adjacencies between partners that you wouldn’t necessarily think of immediately. Use Starbucks as an example: you don’t necessarily associate coffee with a blockchain-based NFT program, right? But that’s a partnership that they’ve recently had some success with. So for us, it’s looking for things like that, and finding ways to build partnerships that might not be as intuitive for our customers and even for us but can still be successful.
Georgie: I would say, well, Uber Eats is a partnerships organization, that is our bread and butter. You know, I think the fact that you can get Starbucks delivered to you within 10 minutes feels, you know, fairly humdrum now but essentially, that is what we do all day and every day, is bringing the best brands to you reliably and quickly. I think where there is an untapped opportunity still, are often the partnerships that should be able to be done very seamlessly and quickly are often the hardest to do. For example, you know, on the ride-side of the business, the times when a partnership is most needed is typically at very large venues where it’s hard to get there and it’s hard to get out. And those are partnerships that make natural sense for the customer in which, you know, Uber is a business, we would invest our own dollars and people power to make happen. And quite often, we’re blocked from doing that—not at all venues, there is a lot of collaboration that happens on the ground in cities, but it’s still not as obvious as you would think. And so for us, in terms of untapped potential, that’s a place of great focus and making sure that we can provide better access for customers, particularly at peak periods, not just as business as usual.
I will say, I think that the categories that are doing partnerships the best at the moment and have been for some time but it’s becoming more ubiquitous, is with apparel. You might not like the Tiffany and Nike sneakers that have just come out, but the way in which the ubiquity and the frequency with which a lot of these apparel partnerships are happening, I think is a great example of bringing the DNA of two brands together and bringing different passion points and cultures together and how we do that from a technology and experience side is something that we’re looking at, as well.
Ari: I’ll take a little bit of a different spin on it. And I think when we approach partnerships, one of the things that may be underestimated as people are looking at other companies is really making sure the two cultures of the companies jive. I mean, when you’re partnering with someone, you are working with them day to day, it needs to make sure that that cultural alignment—and whether that’s work style, target customer—what exactly is the win-win for each of the parties is clearly defined in the beginning. Because you don’t want to get down the path and all of a sudden there’s a mismatch, which makes things even harder to execute on. So I think, you know, you can create the best ideas and think about the best brands out there, but if there’s not a true cultural alignment, it’s going to fail longer term. And I think some of the best partnerships have that longevity because you have that cultural alignment from day one.
Ari: When I think about a dream partnership.
Ari: I know, I know. I think that there’s a cool opportunity for our hotels to have state-of-the-art gyms and partner with the best fitness brand out there, and maybe it’s equipment, I think there’s an interesting opportunity. People work out all the time when they’re at hotels, we know that. And I’ll be candid: our hotel gyms aren’t the best. So how could you partner with someone who really wants to create that flagship opportunity where people will actually be excited, both when they’re staying at our hotels, but imagine: someone who lives close by, and you can actually pay a membership to visit this awesome gym? So, if I had my magic wand or if there’s any gym companies out there, let’s chat afterward.
Heather: It’s making me feel guilty about not going to the gym while at SXSW, but that’s another story. Georgie, any dream collabs?
Georgie: Well, you have a reason to go to the gym. I would love to have In-N-Out Burger on the platform, that’s still one that has evaded us. And then more broadly, I think on the ride side, it is, you know, it doesn’t sound sexy, but continuing to unlock these really large venue partnerships and airport partnerships, which make your pickup experience at those really big peak moments that much more seamless and enjoyable, is genuinely a dream partnership.
Jonathan: I don’t have a dream partnership per se, but we have a lot of travel partnerships, building more lifestyle brand partnerships. And we have a really strong currency, Rapid Rewards Points. And I think investing in the ubiquity of that currency and being able to use those points for things other than simply travel is something I’d love to explore more with our partners that we have today and in the future.
Heather: So, I’m going to ask one more kind of group question, and then I’m going to pivot to having each of you ask a question of the other, but: metrics, and how we measure loyalty–for instance, is NPS a good proxy for loyalty? If not, why? I’d love to understand how you measure loyalty and what ultimately are you on the hook for, at the end of the year? So, Ari, do you want to take it?
Ari: Yeah. So, I’ll answer the second question first. Hyatt has 27 brands. I probably, no one in this room can name all 27.
Heather: You can.
Ari: On a good day. And a lot of those are new. So when we think about what we are on the hook for as World of Hyatt, as the loyalty program, it’s representing all 27 of those brands and making sure that all of our members are aware of our brands and want to try it. That is globally. When a new hotel or a new brand is launching in a new destination, we are using World of Hyatt to educate people on that brand and making sure that they know the experience that they’re gonna get at the Thompson Madrid or the Unbound collection in Scotland. That is a consistent experience, because it is brought to you by Hyatt.
In terms of what metrics we are accountable for, it’s heads and beds. So out of all the hotel nights that someone will, that people have at Hyatt and across the globe, in a year, a certain percentage of those has to come from our loyalty program members. And it’s really our obligation to our hotel owners because we know that our members stay more, spend more and book direct. And every new loyalty program member that we get in the door and staying with us, it helps every other department within the company, and our hotel owners who are building more and more hotels for us.
Georgie: Going back to the first answer I gave, it’s really about engagement. So we look very closely at the number of trips or orders the consumer places over a given period. And one of the things that I’m personally on the hook for is increasing that number and increasing it across a variety of use cases. So, we want to drive more and more orders for our merchant partners, and not cannibalize off those orders for our restaurant food partners, but actually grow the pie overall for our user space.
Jonathan: Our KPIs are likely the things you would expect. So the number of people who are enrolled in the program, the number of flights our program members take. One thing that might not be as apparent is the loyalty programs are one of the primary revenue drivers for airlines. So we get graded on dollars and dollars generated. The biggest engine there is the co-brand credit card relationship. So, if you have a Rapid Rewards—you’ve seen the Southwest Rapid Rewards Chase Visa credit card—the way that works, greatly simplified, is when the customers swipe that card or use that card, they earn Rapid Rewards Points with every purchase. The bank purchases those points from Southwest and then we turn around and we redeem the points, or we honor the points, when it comes time for the customer to redeem. So that is one that we’re very focused on, not just as a loyalty team, but as an overall marketing department. How many credit cards did we issue? How many applications did we get? How much is being spent on the credit card portfolio? Are all increasingly critical measures—and that’s not just in Southwest, it’s true at every airline.
Heather: Great. So I’m gonna let you do the work for a little bit. I’ve asked each one of you to pick a panelist and ask them a question (they didn’t share it in advance). Ari, I’ll start with you.
Ari: Georgie: I know when I think of my competitors I can name the brands, and they’re really hotel brands. When I think about Uber’s competitors, you’ve got your DoorDashes of the world. You’ve got your Lyfts of the world, you’ve got your Walgreens of the world, and the list goes on. So how do you think about making sure that your competitors in each of all those industries don’t fight in for what you are trying to do with Uber, and kind of protect what you’re trying to do against many different industries out there compared to just hotel, which is kind of what we deal with?
Georgie: Yeah. I would say that we think of our competitor set, whether rightly or wrongly, in a pretty siloed way. So how we might think of it in ridesharing is quite different to how we think of it in delivery. In delivery, which is Uber Eats, it’s fair to say that we are, we say we’re operating in a category of giants, and that’s because just the overall category of food is so enormous. You know, we’re not just, if you think just about traditional online food delivery for Uber Eats, we’re not just competing with DoorDash or GrubHub for you to order from tonight for dinner. We’re competing with: are you going to cook? Are you going to go to McDonalds’ drive-through? Are you going to go down to your local restaurant? And so we really need to stay competitive in terms of being top of mind and very salient about that decision and continuing to make sure that we expand the selection that we have, both within our core set of food and then within the broader set of food, i.e., grocery, et cetera. So, we think about that and then we think about, well, responsibly, what is the right way to play? This is a very marketing playbook tactic, but you know, how aggressive should we be with advertising? How aggressive should we be with share of mind, share of wallet? There is the broader category that we’re competing against, but we’re also, we’re a certain size because of how large we are today, based on how long we’ve been around, and do we want to invest based on the size we’ll be at in five years’ time, to accelerate that? Or do we want to be more responsible and invest where we’re at today? So, they’re all types of decisions that we think about.
Heather: Georgie, you ask.
Georgie Okay, Hello [laughter]. So, tell us a little bit about the pandemic: what happened with Rapid Rewards? What did you do to keep customers engaged? And then coming out of the pandemic, how did you think differently about engaging with those members and potential new members? Did it open up new opportunities or change the playbook?
Jonathan: Yeah, great question. So, what was fascinating about the pandemic, and this actually bolts onto to my point about co-brand cards earlier, when you surveyed customers during that period, there were two things they really missed. One was going out to dinner, although they certainly have adapted to ordering in, as the success of Uber Eats has indicated. And they missed taking trips. So even though people weren’t traveling, they still demonstrated a form of loyalty to Southwest cause they continued to spend on their card, and they continued to earn Rapid Rewards Points because A), they knew they would never expire. B), they knew that someday they were gonna take another trip, it was just a matter of when. And it gave folks an opportunity to really sort of stockpile currency and dream about the trips that they would take once they were able to do that. At one point during the pandemic, nearly half of the revenue that we were generating as a company was coming from co-brand card spend, because there was so little of it as a share, because there was so little flying happening. That was enlightening. I think what we’ve seen since is, like I talked about earlier, just trying to recondition people to flying more frequently; trying to understand how the business travel landscape has changed. I think there are certain types of trips that people used to take, business trips, that they simply aren’t taking anymore. Are those being offset by mixed, what we like to call “leisure trips” that are, you know, blended business and leisure?
Heather: Last up.
Jonathan: My turn for Ari. Okay. So, I’ve always felt, looking at a loyalty program, that you can tell as a layperson sort of who’s in charge at a loyalty program: is it the person running the program, or is it the finance department? And my sense with Hyatt has always been that the program, because you guys are certainly compared to competition, you don’t make that many adjustments for award prices, your availability is always constant in terms of the rooms you can book, your policies are customer friendly. So, my sense is that you and your team have a lot of say in terms of how that program is run. So, does that sort of characterize the Hyatt ethos, or are you just a really good arm wrestler?
Ari: Well, I’ll quote you when I go back to our finance department. No, I think it’s really about creating value and we, in the pandemic and even coming out of the pandemic, haven’t tried to decrease the value for our members. And I’ll use an example. When the pandemic first hit, when you stay with us 60 nights, you get a My Hyatt concierge. So this is your personal concierge that you can call, email, text, and they will figure out your trip for you. When the pandemic hit, we actually gave our My Hyatt Concierges money to reach out to their members to check in on them, send them a birthday gift. We knew that they weren’t traveling, but we needed to keep that engagement up. And similarly, we knew they would come back. So we made the trade-off, and when, you know, liquidity is low in April, May, June of 2020, we’re actually going to over-invest because those are our most loyal members. Some of our competitors actually cut their program that have that type of concierge. So, I think that’s just an example of how we’re going to use scarce dollars but use it well. And we’re in the business of creating relationships, and so the second that you pull back from that, you’re not going to see the long-term value that we need to have. So, I think that’s the philosophy that we take. And again, it comes back to what I said earlier: we want to celebrate redemption. And if, all of a sudden, your point does not work out as well, or when you redeem your point and your stay is bad, well you’re not going to come back to us – and then no one wins. We really want to put our member first and making sure that when they stay with us and redeem with us, they’re having a great experience.
Jonathan: Here, here.
Heather: It’s kind of counterintuitive to think, right? Things are at a point where you should be cutting back, but actually doing the opposite and the returns that that could yield. So thank you for those that have been submitting questions. I’m going to ask a few of those and then after that we’ll do a quick rapid-fire close. Did you talk about business leisure?
Heather: Is that a term that people generally use?
Jonathan: It’s a thing. You know, I don’t know how recently that term was coined. I think a lot of us have been sort of doing leisurely things while we’re on business trips or combining that, so it’s not a new phenomenon by any means. But I think you’re seeing more of it and we’re doing more work around understanding those trips, and how to appeal to people who are actively taking them.
Heather: So, building on that,
Jonathan: Sorry, I thought that was the question. [laughter]
Heather: No, that was my own question. Now the question, the real question. It brings up again this idea of all of you think about both B2B and B2C. And equally important, Georgie, you talk about the role of building the relationships with the restaurants and having that selection. We’ve equally talked about the shift in travel. What are some of the different strategies and tactics that you use as you think about businesses versus consumers? Anything that you can share with the audience? Anyone can take it.
Jonathan: We think of them separately, even though it’s the same customer who is taking leisure trips and also taking business trips, because it’s a different occasion and a different mindset. And now our strategies for customers and appealing and driving more leisure flights are going to be, like, loyalty campaigns, sales. We’re launching today a 20% redemption discount, if you’re interested in that type of thing. So that’s how we’re focused around leisure opportunities with business; we have an entire other, almost a sub-business or an organization within Southwest, which is called Southwest Business. And that group is really focused on managing relationships with corporate travel managers and ensuring that those companies are not only getting the product that they anticipate from us, but also trying to get them to book more trips with us and sign more contracts.
Heather: This one’s for Ari: would you agree that Hyatt has been acquiring loyalty through acquisition? Like Miraval, AMR collection, both of which already had their own loyal guests?
Ari: I’d actually say no. I think I’d say: we’re not acquiring loyalty, we’re building loyalty because, again, it goes back to what members want. So Miraval, as an example, there’s one 20 minutes away from here for those who live in Austin.
Jonathan: Beautiful property.
Ari: Highly, highly recommend it. That’s an example of us listening to members, where they want wellness and wellbeing. They want to go to a place where they can do, there’s over 300 experiences that you can do there. Anything from jumping off a high-altitude thing because you’re scared of heights,
Heather: That’s a way to scare it right out of you.
Ari: You can do a fortune teller. You can go with bees and watch them make honey with you. But it’s really about what you want, because it’s your wellbeing; because maybe they’ve worked their butt off and they need a respite. My wife loves the “woo-woo,” is what she calls it, and I like the fitness. And we can do that there. So I think it’s not about buying loyalty program members. It’s really about giving our loyalty program members more of what they want, and I think inevitably that builds loyalty. So I would say, it builds upon loyalty, it doesn’t acquire new members.
Heather: This is interesting because I think, Georgie, you mentioned this; do you see web3, NFT-based programs and rewards as the future of loyalty? For example, what Starbucks is doing?
Georgie: No. I’m sure it’s a part of it, but I don’t think it is the, you know, I don’t think it’s the absolute future of it. I don’t think it’s a gimmick, and I think it is, you know, it plays a very meaningful role in the way that people are thinking about the different ways they can reward at scale, and innovation generally, but I don’t think it’s the future, no.
Heather: Any other thoughts?
Jonathan: I completely agree. If you sort of peel apart web3 and what that could mean, it means decentralization, it means blockchain, it means a number of different things. There may be a future for blockchain, let’s say, as an accounting, technology opportunity in loyalty, but I don’t see NFTs replacing Rapid Rewards Points in the near future.
Heather: So, this is a question for Jonathan, but I would love for others to weigh in on it. I think we often talk about the role that the employee plays, and whether that’s the driver or the non-robot that greets the guest or, you know, the flight attendant that has the empowerment to shake things up as they’re doing the safety video. And you had mentioned, as it relates to hiring, that at Southwest Airlines, you hire for attitude and you–
Jonathan: Train for skill.
Heather: –train for skill. So, the question was: what about the loyalty of your employees, to the brand, has, and what role does that really play in delivering the promises? And has that changed, kind of post-crisis, this most recent crisis?
Jonathan: Answering the first part, first. I think it’s critical. Often, people make the distinction between emotional loyalty and transactional loyalty. The emotional loyalty is how the experience makes you feel and what you can expect when you actually are on one of our flights and you go through the travel journey with us. And the ability of our gate agents, our flight attendants, our pilots to have fun and, even though we’re very focused on all the things that we should be focused on, there’s also the sort of that license to tell jokes and things like that during the announcements. So I think that’s the type of thing, not necessarily the jokes themselves, but just the atmosphere that that creates. I think that has always kept people coming back. How that was different during the pandemic is it was literally and figuratively muted. I mean, we all had masks on, so it’s kind of hard to smile and tell funny stories when you have a mask on. There were fewer opportunities to interact, because we had removed beverage service, food service, on the flights, again as an edict from the government. So, that went away. And I think what happened when we started coming out of the pandemic, and some of those more traditional services started coming back, I think employees really embraced that because they missed doing that. And that’s one of the reasons they came to work at Southwest; because they wanted to be able to do things like that. So that’s what we’ve seen.
Georgie Yeah, well I would separate it because obviously drivers aren’t employees. In fact, you know, the very ethos of being a driver or driving for Uber or delivering for Uber Eats is that the barriers to entry are low. And so, no, you do not need to be loyal to us. In fact, on Uber Eats, it works better for all consumers if more couriers actually multi-app. That means that utilization is higher, it’s better for DoorDash, it’s better for Uber Eats, it’s better for the customer experience. And so I think, counterintuitively, that’s actually something that’s important to us as a business, particularly being the challenger in the category.
In terms of, I would just say more in terms of corporate employees, there are 25,000 of us, which is not, you know, it’s certainly not as large as many tech companies, but there are a lot of us. And something that we do actively encourage, and I certainly actively encourage it with my team, is to use the competition. Particularly when you most want to. Not just for the experience of it to raise bugs, but if there is something that I want, and I can’t get it on Eats and I can get it on DoorDash, I follow through with that. And that informs part of the experience of what we need to do to actually make the product better for our customer. What happens when you work for an organization is, very quickly, you lose all sense, and the proximity you have with the business and the brand really colors your thinking. And so it’s in those moments when you most want to use your competitor, that I encourage my teams to actually follow through with that and to remember what that trigger was, and make sure that we’re soliciting and taking that back to our sales teams, and to our product and tech teams, as well.
Ari: The only quick thing that I’d add, and I’ll use the term that Jonathan used: empowerment. A few years before the pandemic, we removed all scripts from anyone checking into our hotel. And what we told our employees, especially at check-in, is you have to read what that guest wants in that situation and use your skillset to make sure that their check-in experience is what they want. So if it’s 10 o’clock at night and someone just got off of a long flight, they don’t want to hear the gobbledygook about what the hotel is. They just want to get to their bed. So that’s gonna be a very different experience than someone maybe showing up at three with their kids and want to know about the kids’ club and what time dinner’s at. So, we actually removed all scripts and all requirements that a front desk colleague has to say. Because we need them to be their best when they’re interacting with the guest at what the guest wants at that time of check-in. So, it goes back to empowerment of your employees.
Heather: And through that, trust that they’ll to do the right thing. This is a question, again from the audience: with voice being a bigger and bigger part of consumers lives (Alexa, Siri); how are you looking to leverage voice to enhance loyalty, if at all?
Georgie: We do have voice ordering on Uber Eats. It is relatively new. I would not say it’s yet a major part of the ecosystem, in terms of the number of people that are interacting with it. But it is certainly technology that, you know, we’re leveraging and we’re making sure that it’s available. Particularly because it’s important for accessibility, as well. It’s relatively new, but it’s something that we’ve been ahead of and trying to make sure we have available to all customers.
Ari: I think one thing that we think about is, travel at the end of the day is aspirational. And it’s very hard to show what the experience is through an Alexa or through a Google or whatever it is. Now, someone could make a booking there and say, “I want to go to the Andaz Maui from these dates,” and that’s the transactional piece of it. But creating that relationship and wanting our members and our guests to want to go to Hawaii, to want to experience the Thompson Madrid chef, to want to go to the brand-new Park Hyatt that’s opening in London? You can’t do that in a transactional venue. And so we think about, again, how do you create that aspiration through marketing? Where the transaction at the end of the day could be through an Alexa, but you got to have that first piece in order for someone to want to aspire to come stay and have their honeymoon with us.
Heather: We only have a few more minutes left, but maybe we’ll end with a little bit of a rapid-fire round. First is really related to your own brands and what you’re offering: if you were to pick one initiative, signature experience or, like, MVP Perk or offer that really motivates loyalty for your brand, what would it be?
Ari: When you all become a Globalist, which is our highest tier, you get a benefit called Guest of Honor. And that means that when you use your points for someone else—a loved one, a honeymoon—they get your Globalist benefits: they get upgrades, they get free breakfast, they get more points. We are the only program that allows you, your hard-earned status, to bestow it on a loved one when you desire to. So that is something that I think, again, going back to redemption, we celebrate redemption. And that’s an example of something unique in the industry that people love because they want to bestow it on someone because they know that it’s a loved one’s milestone trip or an important occasion for them.
Heather: I love that. Georgie?
Georgie: Does this have to be real?
Heather: No, it does not.
Georgie: I should have answered this with the dream partnerships. I think it would be amazing if you could have your Starbucks order collected by your driver, so that when your driver picks you up, your Starbucks order is in the car. So a real marriage between Uber and Uber Eats.
Heather: I mean, you have to do that now.
Georgie: That would be, I think, MVP.
Jonathan: For us, it’s the Companion Pass. If you’re not familiar with it, if you earn to a certain point, earn enough points, you earn a Companion Pass, which means that you can identify a companion and that person can fly with you for free, every time you fly. Whether you’re paying for a ticket or using points on it, that person is guaranteed a seat for as often as you travel, for the rest of the year that you earned it in, and then the following year after that. It’s probably our most popular product.
Heather: But both are kind of related to the relationships you can bring along with you. I think a lot of times people come to these forums and they’re looking for trends and the next big thing, and in some cases, I think our belief is the fundamentals remain strong. But to now counter that, what’s the biggest trend that will impact the shape of loyalty in the coming years?
Jonathan: I think it’s actually the increasing willingness, and a lot of this is generational, but the increasing willingness of people to give companies information in order to improve their experience. And I think the more information that we can get, and it’s all contingent, of course, on our ability to effectively and accurately process it, the more we can get, the more we can personalize experiences, the more we can anticipate ensuring that things are gonna be the way that you expect them to be, as a customer. I feel like that’s something that we should be taking advantage of.
Heather: Georgie? Besides being able to have Starbucks picked up for you.
Georgie: Yeah, in terms of what companies may do to drive how they think about loyalty, I certainly think that optionality isn’t just increasing, it’s actually what people prefer. People prefer to have lots of choices, and they don’t necessarily want to be loyal to one brand. And as that starts to become a more avert trend that people go after, that makes it healthy because the competition is healthy. And I think that will influence how brands think about loyalty and what it means to actually have true loyalty with customers.
Ari: I think the whole notion of, and it’s already started, but the pandemic just made it go much faster, is wellness and wellbeing. And people want to have vacations where they can put their phone away, they can get away from work, they can shut off their email and really experience it. Everyone is on their phones these days. And I think it’s catching up, that when you travel, you want to do something for yourself and your body and your spirit. And I think that, again, all this existed pre-pandemic, but I think it’s only gonna get even more and more important as we get more and more addicted to our phones. Your brain needs that relaxation and that time off, and how can travel facilitate that for you?
Heather: We’ll end the way we began: is brand loyalty dead?
Ari: I still have a job, so I don’t think it’s dead… and I hope it’s not dead. I think it’s even more important now, than it ever has been.
Georgie: I think people prefer optionality, and I think there is still a place for loyalty, but I don’t think it is what it was 50 years ago.
Jonathan: Well, as probably the only person on the panel who is alive 50 years ago, I will say: I think it’s alive and well, but it is entirely dependent on what you do with it. You can’t assume loyalty, it’s not something that’s given to you. You have to absolutely invest in it and make sure that you are reciprocating with the customer who’s willing to give you that loyalty.
Heather: Thank you all so much for being part of this. Please give a big round of applause for our panelists.
It's really about giving our loyalty program members more of what they want—and inevitably, that builds loyalty.