How Booking.com Nails Loyalty Without Complexity Using Auto-Enrollment Program

Smart loyalty programs don't need complex tiers, points systems, or elaborate rewards. Sometimes, the simplest approach works best.

In 2021, a study published in Marketing Science showed that loyalty programs perform better when customers are automatically enrolled. The research focused on a chain of men’s hair salons.

Customers received $5 back for every $100 spent. The twist was they automatically enrolled customers to the loyalty program instead of asking them to sign up.

The results were eye-opening. Over 5 years, auto-enrolled customers delivered 29.5% more value than those left out of the program.

Booking.com's Genius Loyalty Program

Booking.com offers a great example of this strategy. Their loyalty program activates as soon as you create a free account.

Every time you book somewhere, you earn rewards that turn into future discounts. No complicated points calculations. No confusing redemption rules.

Just book, earn, save.

The Beauty of Simplicity

You don't need Booking.com's resources to make this work. Small businesses can implement this strategy without substantial resources.

You can keep it as simple as "buy 10 coffees and get 1 free." You can keep doing that over and over and over.

That's it. No apps, no cards, no fuss.

The Psychology of Automatic Enrollment

Auto-enrollment taps into a powerful psychological principle. When customers are automatically added to a loyalty program, they feel a sense of belonging. It’s like being invited into an exclusive club they didn't even have to apply for.

This approach builds a stronger connection between the customer and the business. Rewards like free breakfasts or discounts after bookings create a sense of reciprocity, encouraging customers to return.

The data backs this up: customer lifetime value increases by 29.5% over 5 years.

Yes, you'll give away some discounts and rewards. But the long-term gains from loyal customers far outweigh these small investments.

Stop overcomplicating loyalty programs. Auto-enroll customers in a simple program, offer clear rewards, and watch long-term value grow.

Hat tip to Thomas Mckinlay and Phill Agnew for the insight.

Top Tweets of the day

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Niches like Sports have casual fans with no blue check. You can use it to your advantage to stand out in a crowd. For context, blue check replies rank above others which gives you more impressions.

It is equivalent to being a celebrity in a village with poor GDP where you get treated like a star or being the only guy in a pottery class filled with women.

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Never understood pretraining, supervised fine-tuning, & reinforcement learning in AI but now I did. Andrej is easily the world's best teacher in AI.

Pro-tip: Once you learn more about AI, you learn about your own brain. Its called artificial intelligence for a reason. They are scaling human brain so whatever tricks they use in AI, you can use it on your own brain.

I realized this when studying a little bit about Neuroscience. Once you know these rules, you can snap back your focus easily. One concrete example I used was when my eyes got tired due to looking at the screen too much. So I used the Look Up, Look Far, Look Wide rule to give them rest. This only happened due to knowing a bit about Neuroscience.

And it 100% applies to AI or say an LLM. When LLM doesn't give a specific output you want, you either give it better instructions or a diverse set of examples or a volume of examples. And you can apply it to yourself too. When you are teaching yourself (or others) something new and you don't understand it, you can either increase volume or give better instructions (you can use AI to ELI5 the problem) or give yourself diverse examples.

3/

Do more of what's working. The fastest way to make $1m to $10m in today's era is just cloning B2C mobile apps that make a hell lot of money.

Around 3-4 Open AI Whisper wrappers making $100k per month. You can even go niche with your idea to target a specific set of customers. For example, just target Doctors to note down their patient's transcription (which all doctors do with pen/paper) and make it specifically for doctors. You need to do something to make it compliant but it is easily a $1m per month business. I still don't remember how many and what pills to take after visiting a doctor and an app like this will solve that problem and send a "how many/which pills to take" SMS to patients.

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