For InterContinental Hotels Group's IHG Rewards program, should we emphasize exclusive high-tier benefits to retain elite members or broaden lower-tier perks to increase overall participation?

Introduction

The trade-off we're examining for IHG Rewards is whether to focus on exclusive high-tier benefits for elite members or broaden lower-tier perks to increase overall participation. This decision is crucial for the program's success and member satisfaction. I'll analyze this trade-off by considering business objectives, user impact, and long-term strategy.

Step 1

Clarifying Questions (3 minutes)

• Based on recent industry trends, I'm thinking customer acquisition costs might be a concern. Could you share how our CAC has been trending for different membership tiers?

Why it matters: Helps determine if we should focus on retention or acquisition Expected answer: CAC is increasing, especially for higher tiers Impact on approach: Would lean towards retention strategies if CAC is high

• Considering the competitive landscape, I'm assuming we're facing pressure from other hotel loyalty programs. How does our market share compare to our main competitors in terms of active members?

Why it matters: Informs whether we need to focus on growth or differentiation Expected answer: We're in the top 3, but losing ground in certain segments Impact on approach: Would influence whether to broaden appeal or double down on our strengths

• Looking at our tech infrastructure, I'm thinking about the feasibility of personalized rewards. How flexible is our current system in terms of implementing targeted perks across different tiers?

Why it matters: Determines the scope of potential solutions Expected answer: Moderately flexible, but major changes require significant dev time Impact on approach: Would impact the complexity and timeline of proposed changes

• Considering our global presence, I'm curious about regional variations in member behavior. Do we see significant differences in how our tiers are valued across different markets?

Why it matters: Helps determine if a one-size-fits-all approach is appropriate Expected answer: Yes, particularly between leisure and business-focused markets Impact on approach: Might lead to recommending market-specific strategies

• Given the current economic climate, I'm wondering about our budget constraints. What's our current investment in the rewards program as a percentage of revenue, and how much flexibility do we have to increase it?

Why it matters: Sets boundaries for potential solutions Expected answer: Currently at 3% of revenue, with potential to increase to 4% Impact on approach: Would influence the scale and scope of proposed changes