"Tiered Loyalty Program" -- any ideas?

[JimMIA]

As we approach the March 20 deadline for purchasing resale with full benefits, a lot of us have been asking "What's the next shoe to drop?"

And one of the possibilities goes back to remarks Jim Lewis made at the last owners meeting in December. I wasn't there, but as I remember the DIS discussions, he said DVC was going to create a "tiered loyalty program" of some type. The natural assumption is that he meant some sort of benefit package for owners of larger accounts, possibly similar to what other timeshare systems have had for years.

Anybody want to speculate what kind of benefits DVC might offer to owners of larger numbers of points?

 

[Sandisw]

An extra month booking window, so instead of 11/7, it will be 12/8.

 

[JimMIA]

I'll start off with two areas where I think some changes might be beneficial, would cost DVC nothing, and would provide real benefit to owners of larger contracts:

Extended Banking Privileges
Owners of large point accounts probably take more trips than most, and an extended banking deadline would be a real benefit. This would cost nothing, would have no effect on owners of smaller accounts, but you'd want to keep it as simple as possible.

So, just for the sake of argument, lets suggest this setup:

• < 500 points - the current 8 month banking period (this is my group, incidentally)
• 500-999 points - unlimited banking through 10 months
• 1000 and up - unlimited banking at any time during the UY

A New "Program Fee"
Currently DVC dues consist of a number of line items, some of which are costs of running the overall DVC system (member admin, member accounting, MS, etc) and a second category of costs which are specific to the home resort expenses (taxes, etc).

In some other timeshare systems, those costs are segregated. The good thing about segregation of these expenses is that it more accurately apportions the costs.

Every DVC contract has specific annual costs of managing, from computing and billing annual dues, to collecting those dues, billing mortgage payments, etc. And many of those costs are the same whether the contract is for 25 points or 2500. Wouldn't it be more fair -- and a benefit to large owners ("tiered loyalty") if those costs were apportioned more accurately?

I'll give you an example of one system I am familiar with -- Wyndham's. Wyndham charges a "Program fee" for the admin costs of supporting the whole system, and those fees are "tiered."

For accounts of 300,000 points or less, the current program fee is $.57 per K. And because there is a minimum cost for administering every contract, there is a minimum program fee of $88.12 per year. So if you own 154,000 points, you pay $88.12 or $.57 per K. But if you only own 77,000 points, you still pay $88.12...$1.17 per K.

For accounts of more than 300,000, the program fee is $.51 per K. Larger accounts still pay higher total fees than smaller accounts, but their rate is lower.

Wyndham has recently gone even one step further. Wyndham has numerous Every-Other-Year accounts which receive points only in odd or even years. But Wyndham has to administer those accounts every year, and in fact, those points can be used in any year. So they recently started charging the program fee every year on EOY accounts. Needless to say, EOY owners were not pleased, but logic is obviously on Wyndham's side. Every account, regardless of size or structure, has annual costs.

The home resort expenses are prorated equally among all owners based on the number of points owned, so there is no difference there in the rate between large holdings and smaller holdings.

Just a little food for thought.

 

[bwvBound]

My other point system offers the following to large account holders:

• Special phone number for Reservations. I've been truly spoiled by "zero hold time" on that special phone line.
• Free movie rental for each reservation. (This doesn't translate directly to DVC as our movie rentals are already free. Perhaps a free newspaper?)
• Staggered reservation windows for certain types of "cash" rentals. While all owners maintain the same reservation windows when booking on points -- larger account holders have longer windows for certain types of cash reservations.

As for DVC, I'd like to see the "rental points" program expanded. It could be tied to membership tiers so that owners with larger accounts receive better pricing, longer reservation window and/or better pricing. If implemented, I hope that the resulting revenue would be fed back as revenue to the HOA budget(s).

 

[DebbieB]

An extra month booking window, so instead of 11/7, it will be 12/8.

I think that would be totally unfair. If you own a lower amount of points and want a popular reservation time or room type, you wouldn't have a chance even calling on day 1. It's bad enough that people with a larger amount of points can afford to "walk" reservations.

 

[bookwormde]

The trick in any system they devise is meeting the "in the best interest of the majority of owners" standard.

bookwormde

 

[Maistre Gracey]

They could make any benefit, including 12/8, available to everybody regardless of points owned. The difference would be a fee for the smaller point holders vs free for higher owners.

MG

 

[Sandisw]

I think that would be totally unfair. If you own a lower amount of points and want a popular reservation time or room type, you wouldn't have a chance even calling on day 1. It's bad enough that people with a larger amount of points can afford to "walk" reservations.

Oh, I don't want to see that either but it is something that wouldn't cost DVC anything to implement.

 

[JimMIA]

The trick in any system they devise is meeting the "in the best interest of the majority of owners" standard.

bookwormde

I don't think that's true in any loyalty system. The purpose of such a system is to provide incentives and benefits to your biggest customers.

The fact that I get preferred seating and don't pay for checked luggage on my flights is certainly not in the "best interests of the majority" of people on my flights. They can't get the seats I can and they pay more to check their bags because I pay nothing.

I personally would prefer benefits that don't adversely affect other owners, but DVC may not have that attitude.

 

[cvjw]

What does everyone think about the loyalty program and resale/direct points, or a person who has a combination of both who bought before 3/20? Will it only be available for points purchased directly from Disney?

 

[Sandisw]

What does everyone think about the loyalty program and resale/direct points, or a person who has a combination of both who bought before 3/20? Will it only be available for points purchased directly from Disney?

I have a feeling that it will be based on direct points purchased through Disney.

 

[bwvBound]

What does everyone think about the loyalty program and resale/direct points, or a person who has a combination of both who bought before 3/20? Will it only be available for points purchased directly from Disney?

I think that all points (direct and resale) purchased (or at least received by ROFR) prior to the 3/20 cutoff will be counted equal. However, beyond 3/20 -- only "direct" points will be honored in future program announcements.

 

[Greysword]

The types of programs will likely depend on the type of motivation DVD is trying to accomplish with their members.

Using a structure that rewards larger point owners likely will not work with DVC, since the number of viable locations to use the points effectively are very small in comparison to the other large systems. In contrast, DVD appears to have made the medium point buyer (150-300 points) their primary demographic, since the initial purchase cost and reduced number of locations fit with the "once per year" vacation model. As such, a system that rewards members with large point pools may occur, but probably will not be the center of any tiered program with the intention of motivating people to buy large chunks of points.

On the other hand, a system may be made to entice members to cross the 300 point mark or even the 500 point mark, with free park tickets, inclusive dining (DDP), complimentary tickets to a signature restaurant or show, or other available items.

I can also see WDW and DVC colluding to reward members based on number of stays per year (since these members spend more money in the parks, shops and restaurants). This may motivate members with larger point pools to forgo the Grand Villa once per year, and instead spend a week in a two-bedroom then one to three smaller weekend vacations other times in the year (at either WDW or DL). Such behavior likely allows for more money spent in the park.

The tricky part is to not alienate those members with moderate number of points, since the word will get out and this demographic (likely the overall majority of point owners) will become unhappy.

If DVD did implement a series of exclusive benefits for those who purchase directly through DVD (such as discounted park tickets, an extra 20% dining discount, special events, special park hours or tours, etc), they would likely have an option for current resale owners to pay a fee to also gain these benefits, much like the OKW extension.

Just a couple of thoughts I had on the subject.

- Chris

 

[Sammie]

As to the suggestion about Program Fees, I was told definitely not. That this would be about rewarding owners with more points not about punishing anyone with less.

 

[bwvBound]

I can also see WDW and DVC colluding to reward members based on number of stays per year (since these members spend more money in the parks, shops and restaurants). This may motivate members with larger point pools to forgo the Grand Villa once per year, and instead spend a week in a two-bedroom then one to three smaller weekend vacations other times in the year (at either WDW or DL). Such behavior likely allows for more money spent in the park.

Hmmm ... measuring number of stays per year could be accomplished via rented/transfered points rather than points held in (committed) ownership.

 

[js]

I can also see WDW and DVC colluding to reward members based on number of stays per year (since these members spend more money in the parks, shops and restaurants). This may motivate members with larger point pools to forgo the Grand Villa once per year, and instead spend a week in a two-bedroom then one to three smaller weekend vacations other times in the year (at either WDW or DL). Such behavior likely allows for more money spent in the park.

- Chris

RCCL just revamped their Loyality Program something similiar. You use to earn "cruise credits" by the number of cruises you took. For instance, a person taking a 3 or 4 day cruise got the same credit I did for my 7-9 day cruise. Lots were from FL, retired, and getting on those 3 night cruises racked up the credits and put them into higher "tiering", getting better discounts on cabins, onboard, etc.
RCCL has now switched their system to base your cruise points on actual days cruising. So if my cruise is 3 nights, I get 3 cruise credits. But, you get extra credits for booking suites, although all this is done with actual cash, not points.
Much more fair to all, except those that were so close to 20 or 20+ cruises.

Anyway, although not fully the same, it just reminded me that the cruise industry is also starting to revamp their loyality program too.

I can also tell you if I was in a position to outright purchase more points (my mother purchased our 420 points without financing for our family ), I would most definately purchase resale (as was our 420), prior to the deadline and make it an even 500. I think if there are "magic" numbers, one will be 500-899 or so.

Interesting thread, I'll keep reading.

 

[aggiemullins]

Don't forget it was mentioned that Members would possibly be rewarded for Referrals too!

I would personally love better discounts for tickets and dining, but I can't see Disney giving up something that would cost them on their bread and butter items.

 

[Dean]

The trick in any system they devise is meeting the "in the best interest of the majority of owners" standard.

bookwormde

It depends on the area in question. That's not true for reservations or none contractual perks and not necessarily true for resale buyers as much as retail buyers and may not be true for fees as well. Other systems, including at least 2 large ones based in FL, have successfully transitioned to tiered VIP benefits without much incident even when the majority of owners were not necessarily happy with the change. Bluegreen successfully gave higher tiered owners waived fees, additional options and early booking windows. They got around the reservation timing by allowing a tiered wait list but actually reserving at the legally appointed time of 11 months. Marriott did it by essentially creating a new system and allowing owners to cross over but limiting current owners who did not ante up to the system they had already without any hope of expansion or new resorts (simplistically put).

 

[bookwormde]

The best interest of the majority standard applies to managment pratices and policies (I think the actual wording is "Will be run .....). Since there were more direct purchaser than resale, what the other timeshares did fell within the regs. Most of the large point benefits were set up at inception so that is not coverd by the standard.

New classes are another issue that is far from resolved, and it still be activly persued in the courts.

 

[Dean]

The best interest of the majority standard applies to managment pratices and policies (I think the actual wording is "Will be run .....). Since there were more direct purchaser than resale, what the other timeshares did fell within the regs. Most of the large point benefits were set up at inception so that is not coverd by the standard.

New classes are another issue that is far from resolved, and it still be activly persued in the courts.

If they found ways around any possible restrictions that have held up, so can DVC. For Marriott's recent change your statement would be accurate to a degree because they essentially created a new system, however, it would not be accurate for the change, maybe 12-13 years ago, where owners of multiple weeks could reserve a month ahead of owners who only owned a single week. For Bluegreen, there have been several changes over the years. As you suggest the rules would apply, BG would not have passed because even if you added up all the members that qualified for the higher VIP tiers, it would not have equaled a majority.

From my info your statement is accurate but only to the degree that it applies to an individual resort. It would not be applicable to club functions or none contractual functions. Also, as worded in the POS, it would not necessarily apply to reservations system changes.

Anything is always open to the courts. Marriott has 12-13 years history of having two tiers and 1 year for a more formal process, Bluegreen has 6-7 years, Wyndham maybe 10 years or so.

Given that two other FL based system have made similar changes, saying DVC can't do it would seem inaccurate. Personally, I don't think they will, but for other reasons that are not related to any contractual or legal restrictions.