Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / How a Hotel Chain Uses Email to Reclaim Expiring Loyalty Points
Transcript
- Lucas: Luna, here's a number that stopped me: one major hotel chain found that nearly 40% of its loyalty members had points sitting in accounts that were about to expire within 60 days. That's billions of dollars in unrealized liability—and a massive retention opportunity. Luna: That's wild. So they're basically sitting on a pile of potential revenue that's about to vanish. What did they do about it? Lucas: They launched a three-email series targeted at members whose points were within 30 days of expiration. The first email was a simple reminder: 'Your points expire soon.' It included a clear link to see available rewards and a countdown timer—very straightforward urgency. Luna: Straightforward, but I bet a lot of people ignore that first one. Then what? Lucas: Exactly. The second email, sent seven days later, added a small incentive: if you redeem any points before expiration, you get a 10% bonus on the next stay booked within 90 days. So it's not just a threat; it's a reward for acting. Luna: That's smart. It shifts the frame from 'losing something' to 'earning something extra.' Behavioral economics 101. Lucas: Right. And the third email, sent three days before expiration, increased urgency by showing specific rewards the member had viewed in the past—like a free night at a specific hotel—along with a 'Last Chance' subject line. That personalization made the difference. Luna: What kind of results did they see? I'm guessing the open rates were decent. Lucas: Overall, the series drove a 25% increase in redemption bookings compared to the previous year when they only sent a single reminder. But the key metric was the redemption rate among members who opened all three emails: over 60% of them redeemed at least some points. Luna: Wow, so the multi-touch approach really paid off. And the bonus offer—was it worth the extra cost? Lucas: They calculated that the 10% bonus only cost about 2% of incremental revenue because the redeemed points drove additional paid stays anyway. Many members booked an extra night or upgraded their room, so the average ticket went up. Luna: So it's a win-win: members feel like they're getting a deal, and the hotel fills rooms during off-peak times. That's classic retention marketing. Lucas: Exactly. And the cool part is they segmented further. They tested a version where the second email offered a free upgrade instead of a points bonus. That actually performed better with their top-tier elite members—people who already have high status prefer experiential upgrades over incremental points. Luna: That makes sense. Status matters more to them. So the segmentation went beyond just lifecycle stage into psychographic preferences. Lucas: Right. And they also looked at past redemption behavior. Members who had redeemed in the past two years got the standard series; those who had never redeemed got a slightly different message that emphasized how easy it was to use points. They didn't want to intimidate first-timers with complexity. Luna: That's a smart nuance. If you've never redeemed, a 'Last Chance' email might feel more like a threat than a nudge. Lucas: Precisely. So they tailored the subject lines too. For the never-redeemed segment, they used 'Discover what your points can do' instead of 'Your points are expiring.' That small change lifted open rates by 18%. Luna: I love that. It's all about framing. And I'm guessing they also had an SMS component? The show is about SMS too. Lucas: They actually tested SMS for the third email only—the last-chance message. SMS open rates were 90%, and click-through was about 20% higher than email. But they decided not to use SMS for the earlier reminders because they didn't want to feel too pushy. So it was a hybrid approach: email first, SMS as a final nudge. Luna: That's a good balance. SMS has that high urgency, but you don't want to burn the channel. Lucas: Exactly. And the whole campaign reinforced something we talk about a lot on this show: retention is not just about preventing churn; it's about making sure customers get the full value out of what they've already earned. Luna: Speaking of value—I know we've talked about how listener support helps keep this show ad-free. If these conversations have sparked something you've actually used in your own marketing, consider supporting us at buy me a coffee dot com slash fexingo. It really helps us keep the episodes focused on tactics that work. Lucas: Yeah, we don't run ads, and that's only possible because of listeners who chip in. No pressure, but if you find value, that's the place. Now, back to the hotel chain—one more thing they did that I think is brilliant. Luna: What's that? Lucas: After the redemption booking, they sent a post-stay email thanking the member for using their points and automatically credited a small 'return bonus' of points for the next stay. That turned a one-time redemption into an ongoing cycle. Luna: So they closed the loop. The member redeems, gets rewarded for redeeming, and then starts building points again. That's a flywheel. Lucas: Exactly. And the whole campaign—from the expiration reminder to the post-stay bonus—increased overall member lifetime value by about 8% over the following year. That's a massive return for a few automated emails and SMS. Luna: So the key takeaway: don't let points expire silently. Use a multi-touch, segmented series that combines urgency with a genuine incentive, and follow up to keep the momentum going. Lucas: And always test the framing. What works for one segment might alienate another. That's the art of retention marketing. Luna: Great episode. We'll link to a sample workflow on the show notes page.