What does loyalty still mean in a customer loyalty program?

The past decade I have travelled a lot and as such signed up with many loyalty programs. I easily climbed up the ladder of these programs to the platinum or other elite members. After all I flew a lot of miles and spent a lot of nights in hotels. My situation has changed in the past years, the crisis put a ban on travel in the company I was working for and a couple of months ago I started my own company. Hence the past 18 months I haven’t really travelled. The result is that I am being kicked out of customer loyalty programs.

Earlier this year I already experienced this by the fact that KLM downgraded me from being a gold member to ivory member. With that move skipping the silver member level. Reasoning behind it in the KLM Flying Blue rules is the fact that I haven’t been flying with them in 2009. Ironically I just completed a return flight Amsterdam – Los Angeles when that news arrived early 2010.

Tonight I received an email from Hilton HHonors there even with the threat to throw me out of the program:

Remember, to keep your account active, you must earn HHonors points at least once every 12 months. Otherwise, your membership may be cancelled and all of your points forfeited.

So I still have till July 1 to try to stay in the program and they even offer met the option to buy points to stay in the program!

Ok, true, I haven’t granted these companies any business in the past 12 – 18 months, but there is a reason for that. And normally I would have stayed loyal to them when my business takes up again and I do need to book a flight or a hotel room.

In the light of my recent article about organizations in the 2010’s era this is another element in which organizations should change and innovate their programs. The time where the provider dictates the program is over. Pushing a program to demand loyalty is passé. Organizations need to earn loyalty and hence it becomes a cooperation between provider and customer whether there is loyalty to each other. In these particular situations why would I book a flight with KLM or a hotel room with Hilton on my next trip to London in October? My loyalty has just been killed by the provider and now I will probably book with the most convenient organization with the best price instead of awarding KLM and Hilton with the benefit of my loyalty.