What if your loyalty program could tap into a $20 billion opportunity that most of your competitors are overlooking? Imagine increasing engagement by offering rewards that your customers are already looking for—are you ready to drive loyalty through car rentals?
Today, we’re diving into strategies for boosting engagement in loyalty programs with Aleksander Kaczmarek, VP of Loyalty Partnerships at CarTrawler. We’ll explore findings from their Driving Loyalty report, which reveals how loyalty programs can tap into the growing car rental market to unlock new revenue opportunities and year-round customer engagement.
About Aleksander Kaczmarek
Aleksander Kaczmarek has over 13 years of experience in loyalty, specializing in identifying, launching, and growing strategic partnerships across the travel, financial services, and retail sectors. He has previously held roles at IAG Loyalty (Avios) and Affinion International (CX Loyalty). Currently, Aleks serves as the VP of Loyalty at CarTrawler, the world’s leading B2B technology provider of car rental and mobility solutions to the global travel industry.
Resources
CarTrawler website: https://www.cartrawler.com
CarTrawler Report link: http://bit.ly/4hBT7kF
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Transcript
Greg Kihlstrom:
What if your loyalty program could tap into a $20 billion opportunity that most of your competitors are overlooking? Imagine increasing engagement by offering rewards that your customers are already looking for. Are you ready to drive loyalty through car rentals? Today, we’re diving into strategies for boosting engagement and loyalty programs with Aleksander Kaczmarek, VP of Loyalty Partnerships at CarTrawler.. We’re going to explore findings from their driving loyalty market insights on car rentals and rewards programs report, which reveals how loyalty programs can tap into the growing car rental market to unlock new revenue opportunities and year round customer engagement. Aleksander, welcome to the show.
Aleksander Kaczmarek: Thank you, Greg, and I’m excited to be here and looking forward to talking to you about car rental and the opportunity it brings to brands and loyalty programs.
Greg Kihlstrom: Yeah, looking forward to this. Before we get started, though, why don’t you give a little background on yourself and your role as VP of Loyalty Partnerships at CarTrawlertroller.
Aleksander Kaczmarek: Yeah, so first to introduce your listeners to CarTrawler, we’re a B2B tech business providing car rental solutions to some of the world’s biggest brands, including American Airlines, Uber, Hilton Honors, United, and many, many more. And our platform connects these partners to over 1,700 car rental suppliers across 50,000 locations across the world. And we enable their customers to book car rental within their own ecosystem, generating revenue and enhancing customer engagement. And in fact, most of your listeners would have booked a car with our technology without knowing it. We’re based in Dublin, Ireland, and Carsport has been around for over 20 years, solely focused on car rental. And it sits in a very unique marketplace between customers, brands and car rental suppliers. So Cartroll has a strong understanding of the sector and what opportunities lie ahead. I am VP of Loyalty Partnerships. I’ve had a long background in loyalty, identifying, launching and growing strategic partnerships with some of the largest loyalty programs in the world. And I’ve held previous roles at British Airways and Athenian International. In my current role at CarTrawler, I help brands expand and optimize their loyalty proposition by incorporating a sophisticated car rental offering into their programs. I wanted to start off, Greg, if you let me ask you a question. Yeah, sure. Tell me about the last time you rented a car.
Greg Kihlstrom: Yes, so fairly recently I was in Stockholm and I rented a car from Hertz from my loyalty program with Delta.
Aleksander Kaczmarek: Yeah, and that’s great. And I guess that’s what I want to start with, just an overview on where customers can rent a car and frame what we’re going to be talking about today. But there are many ways to rent a car. You can book directly with a supplier, what you’ve done, or you can book via an online travel agent, or you can book via a third party, such as a loyalty program. And as these loyalty programs have started to grow and develop their travel offerings, we believe there’s a huge opportunity for lots of programs and brands to capture much more of this car rental market. And our recent report, which we’ll be talking about today, it came from a desire to better understand how customers book car rental through their loyalty programs. what their needs and what their desires are. And it was based on a comprehensive survey of over 3,500 US participants and uncovered some really key takeaways that should resonate with many brands.
Greg Kihlstrom: Yeah, great. Well, yeah, let’s dive in then. And I want to start with what I introduced at the beginning of the show, this $20 billion opportunity in car rentals. So Car Trawler’s recent research report, it’s called Driving Loyalty Market Insights on Car Rentals and Reward Programs. It highlights this $20 billion opportunity for loyalty programs to incorporate car rentals as both earn and redeem and discounted options. Why do you think this rewards category has been historically overlooked and how can loyalty programs capitalize on this potential?
Aleksander Kaczmarek: Yeah, and just to be clear, some loyalty programs don’t offer car rental, but many do. It’s just we believe that they’ve not been giving it enough attention. As loyalty programs have expanded and launched travel propositions, their focus has been on flights and hotels because these are core travel offerings. Car rental is often considered as an add-on to these bookings. But the car rental market is significantly sized, over $38 billion in the U.S. alone this year, and approximately 60 million U.S. adults rent a car annually. That’s one in four Americans. And this presents a huge opportunity for lots of programs. A key finding from the report identifies that 45% of respondents are likely to rent cars through their loyalty program, but only 12% did. And this points to a massive gap in awareness and access. And interestingly, 63% said that earning loyalty points on car rentals would increase their likelihood of booking through that program. So if you have a points program, you’re really missing out if you don’t offer car rental.
Greg Kihlstrom: Yeah. So how can loyalty programs then position themselves as the leading channel for car rentals, especially when competing with, you know, whether it’s OTAs, airlines, some others?
Aleksander Kaczmarek: Well, loyalty programs tend to already have an existing trust and strong relationship with their members. And by leveraging this trust and integrating car rentals directly into their program, they can create a more sophisticated experience than any OTA. Secondly, loyalty programs tend to be closed user group. meaning customers have to log in to access their rewards. And this enables them to offer exclusive member-only discounts, points or cashback that can be sourced directly from car rental suppliers. And this adds additional value, which isn’t available via OTAs or other channels. And of course, the car rental offering has to be robust and sophisticated. And that’s what we’ll talk about in a bit more detail.
Greg Kihlstrom: Yeah, yeah. And so I want to talk also, there’s there’s some other trends happening as well. So you know, a lot of people listening probably think of car rentals as you know, vacation travel, maybe seasonal business travel. There’s also some, you know, some shifts in demand for car rentals for everyday use, things like visiting friends, moving, other things like that. How can loyalty programs leverage this shift to create some more consistent engagement with members throughout the year, not just seasonal travel?
Aleksander Kaczmarek: Yeah, so this was one of the most powerful takeaways from the survey and one which I’ve seen come as a surprise to even seasoned travel professionals. Nearly a quarter, 24% of all car rentals in the US are booked for everyday purposes. And by that I mean they’re not part of any wider trip, be that a vacation or business travel. And only 10% of everyday rentals are booked through OTAs, giving loyalty programs a huge opportunity to fill that gap and become the customer’s go-to place for these types of bookings. Loyalty programs can tap into this opportunity by offering tailored rental options that fit with members’ everyday needs, positioning car rental as part of everyday life rather than just the vacations. And the customer will engage and we’ll start seeing a shift in where these bookings are made. And what’s more, as you mentioned, these bookings aren’t seasonal. So you can engage customers across the calendar year, something which a more one size fits all travel offering will struggle to do.
Greg Kihlstrom: Yeah. Are there some strategies that you’d recommend for loyalty programs to do this, to, you know, to capitalize on this, this opportunity?
Aleksander Kaczmarek: Yeah, so above everything, it’s about giving customers the best experience from searching for the right car, accessing the best price, and being looked after right through to returning the vehicle. And this will ensure customers will return to their programs and book car rentals again and again. With this as a goal, there’s a few tactics that can help loyalty programs deliver this. Firstly, personalization can make a huge difference. loyalty programs inherently have an incredible amount of data on their customers. And using this data effectively allows them to create a highly personalized rental experience, presenting their customers with the right car, the right time at the right price. And this can create a seamless customized experience that will drive customer satisfaction. Secondly, integrating flexible payment options. 63% of respondents regularly use a combination of points and cash for redemptions. And this shows a preference and growing trend for versatile payment methods that can maximize the value of their points. And finally, offering exclusive member benefits is a powerful way to encourage frequent usage. So member-only discounts makes members feel rewarded and valued. In fact, 62% of respondents ranked member-only discounts in their top three criteria. highlighting just how much people value exclusive loyalty program rates. And these strategies can be very hard to deliver when car rental isn’t your core business. And that’s why partnering with technology partners like CarTrawler can help. So for example, we provide access to a broad range of car rental suppliers, from corporates to independents, which can give customers a greater choice when renting a car. We also negotiate market-leading rates and access closed user group pricing, which can help when it comes to offering exclusive member benefits. And we execute personalization strategies that are aligned to our partner’s loyalty programs, and that will deliver the customers the best booking experience.
Greg Kihlstrom: So another trend beyond the seasonal or I guess the year-round aspect of this is looking at demographics. And one of the things pointed out in the report was 56% of 25 to 39-year-olds are highly interested in renting cars through loyalty programs. So how can loyalty programs specifically tailor their rewards to this demographic, and one that’s typically hard to reach?
Aleksander Kaczmarek: Yeah, it’s actually by far the highest out of any age range in terms of interest in renting cars through loyalty programs. And the reasons for this is that millennials have very distinct values that shape their consumer behavior. And it’s this that’s seen the rise in the success of loyalty programs in recent years. They prioritize experiential rewards and travel opportunities above others. They demand personalization, something that loyalty programs can give them. And they tend to be purpose-driven customers that really want to connect with their loyalty proposition. They’re highly emotive. And to engage this demographic, it comes down against personalization. There’s a reason why we keep hearing this word in the sector, right? This generation craves rewards that resonate with their lifestyles and with their values. They’re not just looking for a typical incentive. They want options who reflect who they are. An example from our report was that 55% of renters under the age of 50 would consider choosing an electric vehicle compared to just 27 of those aged over 50. And this clearly shows the importance of tailoring eco-friendly options to a younger demographic who value sustainability. And also many in this demographic rely on car rentals for everyday needs. They might live in larger cities where they don’t own a car. And so tailoring rewards for local rentals or local suppliers can really meet those broader lifestyle demands.
Greg Kihlstrom: Yeah. Yeah. So last topic I want to talk about is the concepts of both trust and convenience. We’ll start with the topic of trust. And this was one where in the report, 43% of respondents cited trust as a key driver of loyalty program membership. And as a top reason for joining, how can offering trusted and convenient car rental options strengthen these relationships and help to build that long-term customer engagement?
Aleksander Kaczmarek: Yeah, and whilst it might seem quite obvious, it was actually a key finding from the report that trust was the number one reason why a customer joined a loyalty program across retail, banking, and all membership associations. Trust ranks much higher than other reasons such as access to discounts or security of your funds or the ability to earn and redeem points. So trust is a powerful driver of both loyalty program membership as well as the ongoing long-term engagement. And what does trust mean? I mean, for members, trust means that what they see is what they’ll get. No surprises, no hidden fees, just straightforward benefits with a reliable experience. And when it comes to car rentals and even wider travel, This trust is even more important. Consumers want transparency in pricing, an easy, hassle-free process. And if loyalty programs can deliver a consistent and enhanced customer experience, they can become the go-to choice for car rentals, both for everyday needs and travel, strengthening their relationship with their customers. Yeah, yeah.
Greg Kihlstrom: So what about convenience then, too? Because the report also pointed to that as a as a key factor. So, you know, what role does convenience play in integrating rentals into a loyalty program? And how can programs ensure that this process is seamless and convenient for their members?
Aleksander Kaczmarek: Yeah, if trust is the foundation of loyalty program membership, then member exclusive perks and convenience are what keep the members actively engaged. Our reports show that 39% of consumers ranked a straightforward online booking process as their top three criteria for renting a car, which indicates that ease of use is essential to a positive customer experience. Offering perks such as the ability to bypass the desk will provide a wider range of pickup locations, i.e. local branches away from transit hubs like airports or train stations, can go a really long way to enhancing this experience. And these added touches make it very easy for members to rent with confidence and keep them engaged with the program long term.
Greg Kihlstrom: Yeah, yeah. So what didn’t we talk about here? You know, what are what are some other untapped opportunities that you see in the loyalty space that could further drive engagement, create new revenue streams and ultimately produce more loyalty?
Aleksander Kaczmarek: Yeah, a big one is building a diverse portfolio of rewards that complement your loyalty program and go beyond just the usual offerings. Car rental is a good example of that because they cater to both travel and everyday needs. bridging the gap and delivering value that keeps members engaged all year round. But if your loyalty program can add to that and become the go-to place to access additional perks and wider offerings, members are much more likely to increase their spend within your program and become what you could call super active, right? So they’re constantly checking the loyalty program first for all of their needs. And as I mentioned earlier, personalization is key here. There are now highly advanced tools for loyalty programs to offer truly customized reward packages, dynamic content, flexible redemption options that are tailored to each member’s preference. And together, these strategies can create a truly loyal and unique experience that’s versatile, engaging, and benefits both members and businesses.
Greg Kihlstrom: Yeah. So looking ahead, how do you see the role of car rentals evolving and loyalty programs? You know, what, what innovations are out there or, you know, what are, what are we on the cusp of that loyalty leaders should consider to stay competitive and meet these rising expectations of, of their members and consumers in general?
Aleksander Kaczmarek: Yes, a couple of points that the car rental market, which we’ve already discussed, the size is growing tremendously as well. And it’s a unique position to transform loyalty programs over the next five years. As I mentioned earlier, 45% of respondents are likely to rent cars with their programs. And that just demonstrates a wider shift that we’re seeing in the loyalty sector. towards flexibility and convenience, and that’s bringing a new relevance to loyalty programs. One that many customers still might not know, might not understand. So I see huge growth there. Current tools were also the most popular points redemption option, surpassing categories like health and wellness, clothing and homeware. And the future success of loyalty programs will depend on their ability to innovate and meet the evolving needs of their members. To stay competitive, loyalty leaders need to think about beyond simple points accumulation and create a comprehensive personalized experience that really delivers value to their members.
Greg Kihlstrom: Yeah, that’s great. Well, Aleksander, one more question for you before we wrap up here, something I like to ask everybody. What do you do to stay agile in your role and how do you find a way to do it consistently?
Aleksander Kaczmarek: Yeah, good question. I was listening to some of the other podcasts to hear their answers, which is probably cheating a bit. But I try to focus on listening and learning. I am an incredibly curious person, as I’m assuming you are too. And it generally keeps me up at night sometimes. But I’m fortunate that I get to work with so many incredible, talented and intelligent people across the loyalty sector. all of whom are able to answer these questions and have in-depth discussions with me. So I put a lot of effort into ensuring I develop host relationships across the industry. And this isn’t easy in today’s age. People are very busy working remotely, but I go to a lot of conferences, set up as many in-person meetings as possible, dinners, and all of this helps me keep a really close eye on loyalty trends and insights, as well as all of our partners’ evolving needs. you
