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Auctioning Experiences: How Marriott, Coachella Bid For Customer Engagement

(Photo by Kevin Winter/Getty Images for Coachella)

Some experiences money can’t buy. But if you’ve got 22,500 reward points, you can bid for them.

Consider the coveted experience of staying in a tricked-out safari tent at Coachella music festival. Marriott International is designing eight of these tony tents, each to duplicate a room in one of its eight boutique hotel brands, and putting them up for auction. Seven of the Coachella tents are open for auction through April 6. Bidding for three of the tents opens at 22,500 points for Marriott reward members, and bidding for the remaining four starts at 7,500 for Starwood members. One tent will be offered via sweepstakes to Marriott members through March 31.

But instead of paying cash for the opportunity, those who want to stay in one of the tents will have to pay with points in an auction. And that means that in order to bid or qualify, they’ll have to be members of the Marriott or Starwood hotel loyalty rewards programs.

It’s a trend that has been growing among retail reward programs for some time. Reward memberships come with a variety of benefits, from early access to sales events to free alterations. However, the number of accumulated points can be daunting to account for, so retailers seek new ways for their members to redeem them. The challenge is these options have to be exciting in order to generate interest and rare enough to hold member attention.

Auctions for exclusive experiences such as movie premieres, meet and greets with music legends or a night in a tent at Coachella are perfect examples. Furthermore, because many of the experiences involve partnerships with third parties, they do not add pressure on the merchant’s ability to meet demand.

Here’s how more retailers are partnering with or using points auctions to engage members.

Hilton HHonors

There are lots of one-night-only options on this auction site, from Broadway shows to concerts in London. Members can choose from four experience categories (music, sports, culture and food) and can further narrow their searches by dates, country and state. One can, for example, seek out all food events taking place in New York through the end of May. If HHonors cannot find a match, it suggests alternative events.

Sony Rewards

Among this card’s periodic auctions are ShowStoppers auctions for hard-to-find Sony-branded collectibles and experiences, such as private events and signed memorabilia. Members who are short on points can purchase the difference for 1 cent apiece. Sony also offers 10-hour reverse auctions on the third Wednesday of every month. In these auctions, the list prices of items drops by a predetermined amount.

The Delta SkyMiles Experience

Among the items on auction for these frequent flyer miles are tickets to the Academy of Country Music Awards, a visit to the TV set of Rachael Ray (and a meet and greet with the star) and a vacation to Telluride. Members are notified by email when they are no longer the highest bidder. Miles are automatically deducted from the winner’s account only after the auction is finished.

IHG Rewards Club Auction

Intercontinental Hotel Group strives for high-touch experiences for its bidding members. Among the events are tickets to the Austin Food and Wine Festival, tickets to the Masters or passes to the BMW Car Control School, where students can test their braking and handling skills on a track. In most cases, bids run into the hundreds of thousands of points.

Verizon Smart Rewards

Members of this program can vie to win electronics or gift cards to retailers and restaurants by entering their points in its live auctions. It offers both points-only and points-plus-dollars auctions, the latter of which involves bidding to win savings, such as 75% off a $100 item. Once a bid is placed on a desired item, the member is kept apprised of whether he or she is the leading bidder or has been outbid.

Marriott International

In addition to luxury tents at Coachella, the Marriott Experiences Marketplace includes a meet and greet with Tony Bennett, VIP access to the Belmont Stakes Racing Festival and tickets to the Rock & Roll Hall of Fame Induction Ceremony.

Exclusive perks like these enable merchants to distinguish themselves from the competition. Members, meanwhile, get to enjoy two levels of experience — the first being the rush of the auction. Money cannot buy that sense of exhilaration, but points will.

This article originally appeared in Forbes. Follow me on Facebook and Twitter for more on retail, loyalty and the customer experience.

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