Disloyalty keeps consumers coming back for more

By Kirsty Bisset, HYH Durban MD. Naturally, we are all familiar with the concept of loyalty programs – brand initiatives that incentivise and reward people for their loyalty. Rewarded behaviours can include repeatedly purchasing certain products, visiting certain venues, or performing certain tasks. The common theme across these platforms and programs is repetition.

But as Gen Z comes of age and begins to impact the economy, so we are seeing shifts in consumerism that align with this generation’s values and philosophies. Consumers are increasingly seeking uniqueness and novelty – a departure from the norm. Why would they want to visit the same restaurant or hotel repeatedly? Buy the same products over and over again? The very premise of what a loyalty program is, goes against what consumers aspire to.

According to McKinsey, 30% of Gen Zers surveyed in the US and UK said they would “revert to their ‘go to’ brand for a new product or service” when making purchases; 62% said they would check out other options, even if they have a favourite brand; and among those with a favourite brand, more than half of Gen Zers would switch it up if another brand were cheaper or of higher quality. In fact, a key driver of Gen Z behaviour and purchase decisions is the desire to be the “first” to try a product. This is further compounded by their use of products to help express their unique identity.

Building loyalty

The term “disloyalty program” is not what it may seem (a program designed to lose credibility in the eyes of your customers). Instead, and perhaps surprisingly, it is a form of effective loyalty-building based on a partnership premise and exploration. People are not being rewarded through some complicated points tiers, but rather this different kind of food and travel membership for a new generation that does not want to be limited to the same experiences and destinations repeatedly. Those who are tired of a lack of variety and exploration will be drawn to the way members of this membership are encouraged to be adventurous and actively rewarded for being disloyal.

In contrast to conventional loyalty programs, Disloyalty members are not required to accumulate points or progress through tiers to access rewards. Instead, they receive instant perks from the moment of sign-up. This membership turns traditional loyalty schemes on their head and speaks to consumers who want to experience more and spend less time worrying about points and tiers.

The term disloyalty reared its head back in 2013. A disloyalty program first gained traction in the coffee shop market, when a group of 10 indie brands decided to take on the might of the Starbucks chain in the Greater Boston / DC area. The brands came together to reward people for visiting different stores. And surprisingly, it worked. For SMMEs this can be a great way to partner with like-minded businesses to garner interest and support.

According to Ennismore, a global lifestyle hospitality company, loyalty may be harder to achieve, but there are ways to foster it by aligning with a consumer’s habits. To encourage loyalty, Ennismore has launched a travel and food membership program called Dis-loyalty that aims to encourage consumers to embrace new adventures and acknowledges them for their openness to explore. The program brings together more than 75 hotels and 150 restaurants and bars from the company’s collective of 10 brands.

“We want to break the traditional loyalty model by not rewarding members for how often they stay with us, but by encouraging them to discover the new,” a spokesperson said. This lifestyle program unites more than 75 hotels and 150 restaurants and bars from Ennismore’s collective of 10 globally renowned brands to offer 50% off just-opened hotels in the first three months after opening, 20% off every first-time stay in every hotel, 10% off food and drink in any of our restaurants, bars and coffee shops and more.

Trend themes

1. Dis-loyalty Memberships: A new generation seeks variety and exploration through a different kind of membership that actively rewards disloyalty.
2. Variety and Exploration: Consumers are drawn to a lifestyle program that offers a wide range of options and actively encourages adventurous experiences.
3. Turning Loyalty Schemes Upside Down: Traditional loyalty schemes are being transformed to cater to those who prioritize experiences over points and tiers.

Industry implications

1. Hospitality: The hospitality industry can capitalise on dis-loyalty memberships by offering unique experiences and incentives to attract adventurous travellers.
2. Travel: The travel industry has an opportunity to cater to the new generation of travellers seeking variety and exploration through disruptive membership programs.
3. Food and Beverage: The food and beverage industry can tap into dis-loyalty memberships by providing diverse dining experiences and rewards for trying new establishments.

Customer loyalty is the “prize” that every business seeks. Appealing as it may seem, loyalty programs pose some hidden risks that businesses may not notice in the short run, but they can have negative effects in the long run.

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