September 26, 2019

The exclusivity effect

Nick Richardson
PR Manager

What word connects Soho House, Coutts, Costco and BA’s Concorde Room?

The answer - exclusivity. Whilst millions of people know these brands, only a fraction are able to access their services or products due to their private memberships.

When it comes to generating demand for a product or service, the exclusivity effect is a tried and tested method for businesses. By making something available to a select few, its perceived value is automatically higher, generating increased demand and desire for it.

Of course, exclusivity alone isn’t enough. For any brand or business that utilises the exclusivity effect, it’s vital to back it up with a quality product to enable the business to thrive, which in turn drives even more demand. For every successful brand like Soho House or Costco, there are countless others that have tried to leverage exclusivity to drive initial sales and interest, only to live a short life due to lack of quality, innovation or positive user experience. Just ask Fyre Festival’s Billy McFarland. 

Whilst Fyre Festival was ultimately a highly publicised failure, it provides an example of new and creative ways exclusivity is being utilised in the digital world. With no product or past customer experience, McFarland and rapper-turned entrepreneur Ja Rule were able to generate massive demand and significant revenue by merely marketing the idea of a luxurious and highly exclusive music festival.

Launched with a verifiable, value-based product, exclusivity can lead to short-term success and long-term prosperity. When Mark Zuckerberg created Facebook from his Harvard dorm room in March 2004, membership was initially restricted to Harvard students. Within a month, driven by the exclusivity effect, over 50% of the university had created an account.

More recently, US Sports publisher The Athletic expanded their much-lauded, exclusive, ad-free sports coverage to the UK after quickly attracting over 600,000 US members in a highly disruptive form of sports journalism. And in an entirely divergent vertical, Tinder this year announced it has reached an all-time high 5.2 million paying swipers to access its members-only Gold service, growth of 248% from just a year ago.

Yet, while many industries have leveraged innovative, digital exclusivity-led strategies to engage with their customer base, one industry that’s behind the curve is hotels.

It’s important to note that most major hotel groups have made good progress in digitalising their guest experience. A quick search on the Apple Store or Google Play shows many recognisable hotel brands having standalone apps, the majority of which provide basic booking functionality. However, beyond this, if you’re looking for new levels of dynamic customer engagement, particularly on mobile, innovation is a bit thin on the ground.

Most hotels are not significantly engaging with their guests beyond the fundamentals of their onsite stay, nor are they launching creative ways to leverage the exclusivity effect outside of their own loyalty programs. Considering hotels have some of the most brand loyal and passionate customers in the world, there's huge opportunity for hotels to engage customers with far more creative and rewarding engagement. Furthermore, not all frequent, high-value, or brand loyal customers will necessarily participate in a given hotel's loyalty program - giving hotels limited opportunity to further cultivate a positive brand association with that guest beyond the stay itself.

That's one of the reasons why we’ve created Upgrade Pack. We’ve brought digital innovation and exclusivity together to provide hotels with a direct booking incentive offering, as well as a highly rewarding guest experience, all accessed as part of an exclusive group membership through our closed marketplace platform for upgrades.

We’ve also looked to address hotels’ own concerns around the strength of OTAs as a distribution channel, helping hotels to improve their percentage of direct bookings. Upgrade Pack provides our hotel partners with a more controlled platform to generate increased revenue, while delivering the type of simple, yet effective interface that today’s tech-savvy customers demand.

And by working with our banking, credit card and large corporation clients who use (and fund) Upgrade Pack as a loyalty and benefit reward, hotels on Upgrade Pack can engage with a larger, more diverse customer base, who value discounted upgrades more highly, primarily because they are exclusive and users discover them, rather than being proactively 'sold' to them.

So, at a time when the hospitality trade needs to embrace innovation more than ever, we’ve done the heavy lifting, to provide a niche direct booking channel for hotels to optimise their premium inventory. To find out how you can do the same, start the conversation with us here.

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