Skift CMO Interview Series: Wyndham Searches for Fun in the Economy Space

Editor’s Note: Following our previous CEO interview series in online travel, hospitality, and destinations, Skift has launched a new series, this time focused on Chief Marketing Officers.

To better understand the big marketing challenges facing travel brands in an age when consumers are in control, Skift’s What Keeps CMOs Up at Night will talk with the leading voices in global marketing from across all the industry’s sectors.

These interviews with leaders of hotels, airlines, tourism boards, digital players, agents, tour operators and more will explore both shared and unique challenges they are facing, where they get insights, and how they best leverage digital insights to make smarter decisions.

This is the latest interview in the series.

Wyndham Hotel Group announced the debut of new rewards levels for its loyalty program, Wyndham Rewards this morning (see separate Skift post) to welcome both new members, as well as recognize those who stay often with Wyndham’s variety of 15 different brands occupying the economy to upper upscale space.

Josh Lesnick, CMO of Wyndham Hotel Group, has made it his mission, since joining Wyndham in July 2014, to market not just to luxury travelers or big spenders, but to a larger population of customers who place a premium on value.

Last year, at the Skift Global Forum, Lesnick delivered a presentation on that very topic, talking about the unseen power of Middle America.

Today, with Wyndham’s announcement regarding the next evolution of its loyalty program, Lesnick is more determined than ever to show that (1) marketing economy brands doesn’t have to be painful or challenging and (2) the best way to build customer loyalty is by being direct, appealing to their emotions, and having a good sense of humor about all of it.

A case in point would be Wyndham’s recent “Not So Super Art Fair” event. To promote the fact that all of Super 8’s North American hotels were replacing their old (and arguably ugly) artwork with newer, sleek black-and-white photography as part of a brand-wide design refresh, Super 8 enlisted the help of author and actress Amy Sedaris. Last week, during New York Art Week no less, Sedaris hosted a pop-up art gallery show where guests could literally grab the artwork — all old pieces of art donated from Super 8 hotels across the country that were each named by Sedaris herself — and take it home with them.

And then there’s the new Wyndham Rewards program, which was launched last May. Built on the promise that it would be simple and easy for members to understand, it requires 15,000 points for a free stay at any property within the Wyndham Hotel Group family, with no blackout dates.

To promote the new program, Wyndham spent $100 million to market it. The company also introduced the world to the Wyndham Rewards Wyzard, played by Kristofer Hivju, a Norwegian actor best known for his role on HBO’s “Game of Thrones.” Today, the company is seeing the rewards of its investment with increased membership and redemptions.

We spoke to Lesnick to find out how Wyndham is focusing on this often overlooked segment, and how important it is for brands to appeal to customers’ emotional core, no matter the price point.

Skift: What keeps you up at night as a CMO?

Lesnick: What keeps me up as CMO is how to create deeper relationships with our guests. With all the changes and opportunities in today’s marketing world there are so many incredible opportunities and touch points that we can use to leverage and strengthen these relationships with guests. It’s thinking about these opportunities that is so exciting and challenging at the same time.

Skift: What would you say were your biggest successes of 2015 and what did you learn from them?

Lesnick: I think, by far, our biggest success was the rollout of the Wyndham Rewards program. We spent a lot of time talking to customers. What we’ve learned in doing that is that loyalty programs become very complicated, very confusing and devalued, quite frankly, by the competitors in other industries. After a lot of work, we turned it upside down and blew up that whole model and came out with a really simple, generous, obtainable program. Fifteen thousand points gets you a free night anywhere in the world at a Wyndham property.

It has been met with phenomenal success. We have enrolled over 5 million new members. Redemptions are up over 90 percent. Owners have embraced it. Now we have rolled out another exciting addition today, which you experienced with member levels. But what we really learned is that you can really drive loyalty. Loyalty programs work if they’re clear, simple to understand, and transparent to the customer where they understand what they’re getting and how valuable that is.

Skift: Even though it seems like customers are so much more savvy about loyalty programs these days, it’s interesting that Wyndham took that simple, direct approach. Why do that?

Lesnick: It’s really interesting; when you talk to customers they will tell you loyalty programs and rewards programs really do influence their stays. They can tell you so many nuances of the programs and how to get the best deal and how to redeem your points or your miles. On the same note, when you ask them, in a lot of cases, ‘Well, what does it take to get a free night?’ because of the way most of these programs are set up, they don’t have a clue. What we want to do is just make that really easy for guests to understand. I think we’ve accomplished that. That’s what the feedback is saying. Our customers are definitely more savvy and they want you to be transparent and honest with what you’re doing.

Skift: Is it more of a challenge for you to market in the economy sector versus the luxury space?

Lesnick: It’s interesting. What I’ve really learned is actually marketing the economy sector is really fun and it’s actually really easy. Because they know what they are so it’s really easy to define what the brand is, what it stands for and who you’re targeting. We’re not trying to be something we’re not.

Now with that said, it doesn’t mean that just because it’s economy it can’t have a great personality and have a really fun set of benefits. We’re having a ton of fun as a company, and really beginning to innovate around Super 8. The owners have invested over $100 million over the last few years into refreshing the properties, and it will be done by the end of this year. They’re really upgrading the design and making it much more modern. Surprisingly, it’s a lot more fun and it’s almost easier to market the economy brands. Because you can really stay on brand, on point, and you know who you’re talking to.

I would say these are iconic brands that have been part of the American travel world for decades. I grew up with these brands and I stayed at Days Inns and Howard Johnsons. When you talk to people, there’s such a rich history and heritage around these brands. What we want to do is capitalize on that heritage and on that awareness. Some of these brands like Super and Days have 96 and 98 percent awareness; it’s just phenomenal. What we want to do is build on that and the heritage, but add in a little more modern sort of flair and personality.

Skift: Are you trying to change people’s perceptions about these brands or build on the emotional connection that they have? Or both?

Lesnick: I think we’re trying to build on the emotional connection. There’s a lot of interesting demographic changes that are going on the marketplace. One obviously are the Millennials who love to travel, love experiences, but they have limited budgets. Then you have this enormous growing middle class that’s 2 billion people today. Over the next 15 years it will grow to over 4 to 5 billion people who also have limited budgets. I think what people are really looking for today is a great experience at a great value.

Skift: What gets to travelers’ emotional cores these days?

Lesnick: I think they are value-driven customers. Certainly a lot of the products and brands that we have. In addition to taking the brands and invigorating them with new personality and new flair they’re really looking for value-driven offers.

This summer we rolled out the richest offer we’ve ever done in the history of the company, where if you book direct you get to save an additional 10 percent. You get a 25 percent savings on your summer rate as well as for every two stays, you get a $100 in Wyndham Rewards gift cards. We’ve really introduced a value element, an additional savings element to these customers.

Skift: What impact can you market to consumers to tell them that you have the lowest prices online and they should be booking direct?

Lesnick: We’re making a very big investment this summer with our summer campaign. Once again, features the Wyndham Rewards Wizard. As part of that campaign, we’re giving a hundred dollars if you stay all for direct bookings. If you book twice, you get a hundred dollars of Wyndham rewards gift cards and you save an additional ten percent. You save a total of 25 percent if you book direct. We are deploying that strategy. We also use a very focused, targeted, direct approach, too, once people are in the program to continue.

Skift: What about the online travel agencies? How do you compete with their marketing muscle?

Lesnick: In many cases, the online travel agencies help to fill a need but what we ultimately want to drive is direct bookings. The best way we can really do that is through our Wyndham Rewards program because once someone joins up for the program which is free to join, we can give them as a special member benefit extra savings, extra value offers, other services. We also know them better, having that deep personal relationship with the guests so we can really give them an extra value to their stay. That’s really the way we sort of balance our distribution. Ultimately, we would love to drive them to direct, but with a system of our size, we rely on our value.

Skift: What types of marketing channels/strategies have proven to be most successful for you — social media or traditional advertisements — and why did you choose to use a spokesperson like the Wyndham Rewards Wyzard to promote the new loyalty program?

Lesnick: I think it’s certainly through brand and content. The Wyndham Rewards Wyzard is a great enabler; it’s a third-party device that’s really a purveyor of value. What he let’s us do is sort of cross promote our entire portfolio. Because our brands are so different and span from economy all the way up to upper upscale, we needed a device that would enable us to sort of talk about all of our brands and all the different experiences. Because I do believe travel is very situational.

I really do believe that people do buy up and down the various hotels and brands within our portfolio. The Wyndham Rewards Wizard gave us a really fun device to sort of link all that together. There’s also a way which is so important in our world to engage our associates and our employees and owners and they have really sort of taken a liking to the Wyndham Rewards Wyzard. It has really helped us to energize our entire own system.

Skift: How about social media and digital channels?

Lesnick: The Wyndham Wyzard has been a terrific device within the social media channels. We found the most effective channels are Facebook and YouTube, actually. We took all of our commercials with the Wyndham Rewards Wyzard, we did some outtakes and put it on Facebook. For example, we’ve gotten over 10 million views from that which has been an enormous way to extend our campaign in a much more personalized way. We’ve also found YouTube has been terrific. We launched Wyndham Rewards TV which is a fun take on two travelers using their points. We put that out through YouTube and Facebook and had several million people engage with us that way. Social channels have been a great way to extend our message, and create awareness. We do that in an authentic, sort of fun way. It’s not a commercial over commercialized message. It’s more like an engaged level of content that people are looking for.

Skift: Do you still think it’s important to think about traditional channels like print, TV, or radio? How do you balance that with Wyndham’s digital push?

Lesnick: Sure, because when you think about our portfolio, 40 to 50 percent of the people that stay in our hotels, drive up and make a decision that night. Having a very strong brand awareness through traditional channels is very important to us. We’ve seen that especially on the leisure travel side where someone may be driving to their destination and they’re not sure whether they’re going to stop now or go for an hour. Having that eye for familiarity of awareness is so important.

We launched a really interesting component to our mobile app. It’s called Booking Magic. What that allows you to do is, before your trip or, say you stop along your trip, you can set a time that you think you want to drive to in the app. One of our agents at our call centers will call you back and they know your geo coordinates and they can actually recommend hotels that are nearby at that time. We embedded a digital wallet on top of that. We’re the first company to roll out with Visa checkout and it makes it really easy to pay. We’re trying to use mobile which we’ve seen explosive growth in over fifty percent year after year. We’re coming up with unique and creative ways to help people based on the type of hotels that we operate and based on the travel patterns they use.

Skift: What’s next for Wyndham?

Lesnick: I think what you’re going to see over the weeks and months to come is really exciting innovations into our brands. We’re going through a big process right now where we’re clearly redefining each brand. We want each brand to have a unique personality and unique benefits. We think we have a brand that meets every possible travel needs. We have a hotel or brand or experience for every type of traveler. We really want to build the positioning and strengthen those brands with their perspective customers. I think we have an opportunity to really inject a lot of personality and bring out really exciting futures with each individual brand. It’s sort of like what you saw with Super 8, with the new room designs.

Travelodge, for example, is a brand that has hundreds of hotels near national parks. We’ll work in partnerships, for example, with the national parks to bring that sort of look and feel in artwork into the hotels. To really localize it. People that stay in Travelodge hotels near national parks we know they sort of want to get up and go so we work at engineering different food options where it’s more of a grab and go energy breakfast or meal plan where they could just get up and get to their attractions. You’re going to see a lot of that stuff. We’re going to infuse a lot of personality and a lot of energy into all of our brands, especially the economy brands.

This series is presented by Boxever. The Skift content team maintains complete editorial control over these interviews and the selection of subjects.

For more insights from Boxever, please see the following reports:

• Free Skift Report: The Psychology of Customer Experience
• Free Skift Report: The Habits of Travel Bookers: How Americans Take Vacation
• Free Skift Report: What Travel Brands Can Learn from Behavioral Economics