Corporate dining network Dinova now allows corporate
travelers to collect loyalty points for personal use if their company will
sanction the program. Travelers create a myDinova account, registering their
corporate cards, and Dinova tracks each member traveler's total restaurant
spend—both in and out of the Dinova network—based on credit card data. The loyalty
tool rewards travelers per the dollar amount of in-network spending and
additionally at specific percentage thresholds, and travelers exchange points
for gift cards to in-network restaurants. The program is enabled for American
Express corporate card holders, and Dinova will onboard additional card brands
by the end of the second quarter.
CEO Vic Macchio expects Dinova's corporate clients—which
include 40 of BTN's Corporate Travel
100, along with a host of enterprises and midsize businesses—to embrace the program
in a big way. In fact, he said, they're the ones who asked for it. "Dinova's
fundamental value proposition to our corporate clients has been to earn rebates
on dollars spent in the restaurant marketplace, given a little bit of
concentration of their spend into the preferred network," he said.
Over the seven years since Dinova rolled out its primary
program, however, corporate culture has changed, said Macchio. "Travel
managers are looking to implement policies that not only help the company but also
benefit their end users, as well. They've found that to be the current best
practice to drive compliance, so they asked us to develop something to answer the
question, 'What's in it for me?' We've been working on this for about two
years. It represents a change in our model, but it's a challenge we were up to."
Gut Check #1: Where
Traveler Loyalties Lie
Macchio said myDinova works like an airline or hotel loyalty
program. "We wanted to make our program dovetail with everything else that
[travel managers] already do," such as airline loyalty programs, he said. "That
is not a program that the company is going to mandate, but the traveler can
sign up for that program and most companies will allow the traveler to retain
the loyalty points. … Ours is exactly the same."
That said, travel managers have reported a mixed
relationship with air and hotel loyalty programs. Many align with preferred
suppliers that have popular loyalty clubs and then leverage those loyalty
schemes for compliance. Traveler-level loyalty programs, though, also can siphon
travelers away from preferred channels. That's especially true when suppliers
offer bonus rewards for booking direct. Travelers also tend to book with their
loyalty-program suppliers even in instances when those suppliers' rates are more
expensive than another brand's comparable hotel rooms or airplane seats, a
travel manager pointed out at a recent BTN
conference. Typical loyalty programs, in other words, can spur not only
noncompliance but also overspending.
The myDinova program, though, avoids this pitfall because
Dinova is not a typical supplier. It's a tool that drives spend into a
preferred network, and thus there are no competing restaurants to worry about.
It may actually help travel managers compete against consumer-oriented networks
like OpenTable that offer their own loyalty programs.
Macchio said there is no plan to enable individual restaurants
to pay for increased exposure or to market bonus points to travelers. "We
will be testing lots of different ways to offer bonus rewards, but our
commitment is to our corporate clients and to maximize their rebates."
Gut Check #2:
Reducing Potential Rebate
Rebates are another concern with traditional rewards
programs. Like a corporate card program, Dinova rebates are based on spend
volume, and the more a company spends within the network, the rate at which the
company earns rebates increases. Following this familiar model for managed
payment makes the Dinova value proposition easy to understand and implement
with clients.
Typically, bringing a traveler-level loyalty rewards program
into a rebate scenario means taking a hit on the back end: As travelers redeem
points for rewards, it often chips away at the basis points upon which payment card
rebates are calculated.
"We asked clients if they would be willing to fund a
rewards program from their rebates, and the answer was a very quick and
emphatic, 'No.' They want employee rewards, but it can't diminish the value of
the primary program," said Macchio. "So we are funding this on our
own economics with the rationale that the rising tide will lift all the boats.
When more spend goes into the network, that's going to be worthwhile for everyone.
We'll have a bigger business … and we'll be more than able to cover that even
if we have a bigger business at smaller margins. Loyalty programs are here to
stay."
Gut Check #3: Driving
Up Check Costs
Like any loyalty program that rewards travelers on dollar
amount spent, there's a potential downside for myDinova: travelers overspending
to reap greater rewards. Restaurants in the Dinova restaurant network already
report that business
travelers spend a huge premium over average individuals or family customers.
Stoking that fire with additional incentives could be bad news for corporates.
Macchio played it down.
"In reality, we don't think it's an issue, and neither
do our clients," said Macchio. "Here's why: Dinova is not about
policy; it's about procurement. We are not controlling or suggesting how a
company spends its money. We are addressing where it's spent from a procurement
perspective. The reality is that nothing about Dinova or the myDinova loyalty
feature trumps policy." He went on to say that if a company has an allowance
[by city or country], employees are still required to comply with that
allowance. "On top of that," he added, "all company dining
expenditures must be approved by a superior, typically a direct supervisor. That
will be business as usual."
Should manager approval not prove a bulletproof assurance,
Dinova does offer reporting on average per-check data, top spenders and other
key indicators per month that could help manage the issue more aggressively. "But
there are many reasons per-check averages could increase," Macchio pointed
out. Still, Dinova is looking for more ways to help travel managers guide dining
spend more closely.
Macchio said Dinova is considering filtering Dinova's
13,000-plus-restaurant network by tier and then allowing corporate clients to configure
policy around those tiers. The initiative could, for example, group high-end
restaurants into a single tier and enable clients to pull a lever that would limit
that tier to business meals with clients or prospects. The next tier down could
encompass restaurants for individual dining or internal groups. Macchio
suggested that such a feature would query travelers about their plans first,
then display restaurant choices according to the corporate policy.
"We're in the business of shedding light on
the [dining] category and providing our clients with the tools necessary to
manage it," said Macchio. "MyDinova is a tool that will help our
clients get higher rebates and drive more compliance to the program."