Home

On Loyalty, Rewards, and Squandering Loyalty Capital: Thoughts Spurred by the Palomar Los Angeles

March 29, 2015

When properly motivated, NPS is about as loyal a traveller you could get. Note that this behavior is less motivated by rewards than it is by habit. NPS knows what it likes in a service company and it knows where to go to get it (and where to avoid going to not get it…hah parse that). Once we find what we like at NPS, we go over and over again back to the well.

But when things go south in a loyalty relationship, NPS does not shy from corrective action. Just trawl the United airline entries here and see what we mean. After 1,590,963 miles on United (ten years as a 100K flyer), Jeff Smisek’s terrible operational leadership finally squandered and squeezed every iota of loyalty out of NPS. So what did we do? We pledged to fly any other airline possible in 2015. And we’re doing it (thanks Virgin America! Jet Blue! Delta! American!). For the record, Virgin America seems a bit surprised by just what a business traveller firehose of cash looks like!

NPS is run by capitalists—the kind of capitalists who remember who has the money, who is paying for the service, and how capitalism is supposed to work. Woe to the business that forgets this, because at NPS we mostly vote with our hard cash (oh and we tweet sometimes too).

Loyalty programs are a nice perquisite of abundant travel, but as mentioned above, NPS never choses a hotel chain, airline, or rental car organization for its loyalty program. Accumulating frequent whatever status is just a side effect of habit.

Given all this, it is high irony indeed when a theoretical “reward” associated with a loyalty program screws things up in a loyalty relationship. Consider Hertz. NPS chooses to rent only from Hertz because price differential in rental cars is completely arbitrary and, most important of all, remembering which flavor of car you have rented takes cycles we don’t have to spare. If we have a rental car reserved for a trip, we don’t want to dig around in our stuff trying to remember which company it is. So it’s Hertz for NPS.

A side effect of always renting Hertz is membership in the super gold plus “presidential circle” which as far as we can tell is utterly meaningless, oh, and accidental accumulation of points. Recently NPS looked into the points reward thing to get a bunch of cars lined up for the #collegeandthearts tour. Multiple free cars on multiple legs is great and makes us feel good! But wait, you wanted a convertible to take one way from LA to San Fran up the Pacific coast with your son? Well that will cost you more! You see your “free” reward involves a generic car type that you don’t rent by default. Talk about squandering loyalty capital, Hertz did it in spades! To make $300 in short term revenue Hertz chose to made NPS unhappy, crumpled up all the loyalty and threw it in the trash can by the door. That tradeoff is just ridiculous if you think about it. So, yes, NPS will spend the $300 bucks, but we may also switch our business cash spending hose to Avis.

Instead of “stickiness” the Hertz loyalty reward has led to brand “slipperiness.” FAIL.

What prompted this tirade was some Kimpton behavior that NPS does not approve of involving its loyalty program. Read the entries here and you will see that Kimpton has NPS right where it wants us. We love Kimpton. If we are in a city with a Kimpton, we thank our lucky stars and stay there. But do we do it for the inner circle status or the rewards? Nope. We do it because we abhor plastic showers, terrible hamster cage room design, and Disney-world-Walmart-shooper consumers (in precisely that order). Plus over the years we have come to know many Kimpton GMs and executives and we are pleased to count them as friends (I’m talking to you Joe Capalbo, Steph Vogel, Jacques Bezuidenhout, Brian Means, Chris Smith, Matt Hurlburt, and Mike DeFrino! You guys rock.)

In fact, back when the Kimpton loyalty program first started, NPS provided lots of advice to the setter uppers, most of which was operationalized. A compliment/complaint to Mike DeFrino long long ago regarding training 14 properties about NPS habits one at a time (and its relationship to arbitrary leadership from different GMs) was met with a fantastic solution. NPS was inner circle back before there was such a thing, and watching Kimpton build such a strong chain and associated brand has been a joy.

Then there is the rewards system, which should be icing on the cake, but somehow misses the mark. Just for the sake of repetition, we stay at Kimpton to see our friends and avoid plastic showers. So when we get a reward night at a new property what would we expect? Certainly not a plastic shower. NPS is not in it for the free night, heck, we have plenty of money. We’re in it for other reasons. A generic rewards program that ignores that fact does so at its peril. Give us a free room with a plastic shower and watch us become upset.

A quick aside on social media is worth a few words. Part of Kimpton’s brand strength comes from decent use of social media. But Kimpton needs to make sure to engage just as well with the hard lessons of dissatisfaction as they do with happy happy back slapping bonhomie of people who don’t travel much. NPS will aim its pea shooter in whatever direction it pleases and hopefully make the world a better place for spoiled travelers in some way. Better pay attention!

What does NPS do when unhappy? Is this all about social media and rampant complaining? No not really. NPS votes with cash when push comes to shove. So brand managers, here is a lesson for you: do NOT let your rewards system squander so much loyalty capital that you cut yourself off from the cash flow river.

The good news is Kimpton has a store of plenty of loyalty left in the lake, so there is no danger of NPS jumping ship anytime soon.

OK enough of that. Dismount.

Now on to College and the Arts hotel number 2, the Palomar in LA that got all this thinking started. NPS has sent spies here, but we have never been here ourselves. Usually, a first visit to a new property is a joy. This time, not so much.

Do tell, we hear you saying…

Wine hour in the packed lobby

Wine hour in the packed lobby

We arrived from the arts part of the day (at the LACMA) right at wine hour. Optimal! Free wine is a great Kimpton perq. The lobby was abuzz and there was even a DJ and a long line to check in.

At the front desk they told us we had been “upgraded” to a special room. But if room 1020 is superior, this property needs some work. You see, we have stayed at many a Palomar over the years and we expect way better than a gussied up hamster cage with a plastic shower. Yes, Kimpton, you have created a monster. Please just do your homework before we get there.

1020 at the Palomar Los Angeles is supposedly an upgrade?!

1020 at the Palomar Los Angeles is supposedly an upgrade?!

Anyway, our reaction to 1020 is “this sucks,” which frankly is not the reaction Kimpton is probably looking for what they dole out a loyalty reward?!

A plastic shower at Kimpton's Palomar in Los Angeles

A plastic shower at Kimpton’s Palomar in Los Angeles

As NPS readers know, we spend endless hours avoiding plastic showers. The worst variety is the kind with the bent out obesity-friendly shower curtain bar designed for Walmart shoppers. Here’s a picture of what we can’t stand.

PLASTIC SHOWER. Look at that light shine off the curtain.

PLASTIC SHOWER. Look at that light shine off the curtain.

So we called down and let the front desk know about the plastic shower thing. They were stymied because all of the glass showercube rooms were taken. BUT I MADE THIS RESERVATION MONTHS AGO IN 2014!!! Here’s the deal with loyalty. Track us all you want, but read the dang computer file and do some planning. Assign someone to read the blogs of inner circle people before they show up at your property and see what makes them tick. Free? Not us. Glass shower? That would be it.

We did say when we called down and had a chat about the room that they would hear about it. And so we took to the twitterz where we were met with cricket chirps and resounding silence from the crack Kimpton social media team who seems to have been on break for 14 hours. That meant we needed to find the GM, which we are doing in a different thread.

We’re looking forward to a chat with Rob Hannigan who has been ultra responsive so far. NPS is confident that things will resolve nicely because Kimpton is about the best there is.

Oh, and the water was still. So we went and bought some San Pellegrino ourselves when we joined friends in Topanga for dinner.

A Kimpton all time low two showerheads and an upbraiding for the Palomar in Los Angeles on this trip. You can do better Kimpton.

1020 a room with a view (and a plastic shower) at Palomar LA

1020 a room with a view (and a plastic shower) at Palomar LA

3 Responses to “On Loyalty, Rewards, and Squandering Loyalty Capital: Thoughts Spurred by the Palomar Los Angeles”


  1. Rob did in fact respond incredibly quickly and thoughtfully. He is a great guy and apparently a very good executive as well. We talked about these thoughts for 30 minutes the morning they were published.

    You go Kimpton. I am looking forward to my next LA visit.


  2. […] lesson in the “Palomar delta” between LA and SF is personal connection. People make all of the difference in the hospitality business. Thanks […]


  3. […] and Los Angeles school: UC Irvine hotels: 14 West and Palomar Los Angeles arts: LACMA highlight: visiting Bob and Espie in Topanga special thanks to: Louise Schlegel and […]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: