Consulting Journal: Style - Loyalty cards (2)

This article is reprinted from The Consulting Journal
http://www.consultingjournal.com

Style: Loyalty cards (2)

by David Blakey

In the second of three articles, we look at choosing and using loyalty cards.

[Monday 11 August 2003]

In the previous article I described four instances in which you can use loyalty cards for travel away from your home:

checking in at the airport, using airline frequent flier programmes;
using the airline's valet parking and lounges, through airline loyalty clubs;
hiring a car, using car hire loyalty clubs; and
checking in to a hotel, using hotel loyalty clubs.

In this article, we shall look at how a sole proprietor or a small consulting company can manage and account for these.

Free memberships

If a company wants you to use its services and offers potential rewards for doing so, then membership should be free. By potential rewards, I mean that they will either accummulate redeemable ‘points’ for using their services or that they will make you occasional offers of reduced rates. These rewards are potential because you may not actually claim them. Your airline points may expire. You may not need a hire car in the period of the special offer.

The rewards from these memberships should go to the individual consultant. The memberships can be in the individual's name and all correspondence can go to the individual's home address.

Paid memberships

If a company wants you to use its services and offers immediate rewards for doing so, then you can probably expect to pay for membership. Examples of paid memberships are airline ‘club’ memberships and hotel loyalty programmes. You get immediate use of the airline's valet parking, lounges and other facilities and immediate room upgrades or reduced rates.

There are two arguments for your clients paying for these.

It is reasonable for you to expect a standard of comfort when you travel on behalf of a client that will ensure that you work well when you are with them. If you are flying to a client for a morning meeting, it is reasonable that you do not have to worry about parking your car and that you do not have to walk through pouring rain from the car park to the airport terminal.
When your membership saves a client money, it is reasonable for the client to pay a contribution towards that membership. If you can save your client $100 on your hotel room, I think that it is reasonable to charge them a handling fee of $10 or so.

A consulting company should consider having all these memberships in the names of the consultants. There are three options for paying for them.

The company can choose which airlines and hotel chains to use and pay for all the memberships. With this option, any consultant joining the company would be expected to use the company's choice of airline and hotel.
The company can pay for all consultants' memberships, to a reasonable maximum number and to a reasonable total cost.
Each consultant can purchase their own memberships.

The first choice is popular with some large consulting companies. Some of these companies imagine that they have greater control over their employees' travel, although I cannot see quite what benefit this really gives. Some of these companies choose an airline because it is one of their clients. Again, I cannot see what advantage this gives them. I also cannot believe that their airline client really cares. This choice adds administrative costs, so I do not advise it for smaller consulting companies.

Which of the two other options to choose is a matter for the consulting company itself. If the company pays for all consultants' memberships, then the company can make additional charges to clients for the benefits derived from those memberships. The most useful will be for savings in hotel costs. If the consultants pay for their own memeberships, the company should allow them to make additional charges towards the cost of the memebrships, whenever they are used for the benefit of clients.

Airlines

Here are some considerations when you are deciding which loyalty programmes to join.

There are now two major alliances of international airlines, so joining the loyalty programmes of two airlines that operate locally should cover all your needs for a free programme that gives you rewards. Your choice of the two airlines will depend upon which two offer the best facilities under their paid membership programmes.

Often, the two memberships will have the same membership number. You should be aware that there are two memberships, a free one for accumulating rewards and a paid one for receiving immediate benefits.

Hotels

Sometimes a single membership can cover several different brands. Hotel chains may manage their hotels under different brands, depending upon their location, their facilities and the kind of customers that they wish to attract.