Loyalty used to be as simple as status. A guest stays with you, he or she gets points and you give them something, maybe a room upgrade or a free breakfast.
NB: This is an analysis by Carolyn Murphy, marketing content manager for Revinate.
The trouble is, guest expectations are changing and generic loyalty perks are no longer enough to impress and retain your best customers.
Of the 238 million US consumers who are members of a hotel loyalty program, only 44% are considered active members, according to a Sabre report, Traveler Loyalty & the Modern Brand.
Fifty per cent of a loyalty program member’s annual spend is not with his or her preferred brand, and 30% of members are at risk of switching programs entirely.
It’s not that the idea of loyalty programs is dead - more than eight in ten (83%) of loyalty program members believe that they should be rewarded for loyalty - it's the experience that falls short.
Seventy-one per cent say that they receive irrelevant perks from their preferred brands.
So the problem isn’t that consumers are disenchanted with the concept of loyalty, rather consumer expectations have changed. Hotels need to rethink what loyalty means to the modern-day traveller.
The question hoteliers should ask themselves is:
"What constitutes loyalty?"
Does the prospect of an occasional room upgrade really inspire loyalty and repeat customers? As the Sabre paper shows, generic, hum-drum programs as the go-to option for fostering guest loyalty are not enough.
True loyalty has been achieved when a customer chooses to stay with your brand, even when an equal or potentially better alternative is available.
Hotels should be using loyalty schemes to create a more personally relevant guest experience.
To engage your guests effectively, you’ll need to consider the following factors:
Building relationships vs points accrual programs
Hoteliers need to start by structuring loyalty programs around building a one-to-one relationship with guests. Points accrual programs give an air of exclusivity but fail to deliver the personal touch that today’s hotel guests crave.
When anybody can stay with your hotel a specific number of times, achieve a Double Platinum Super Cool VIP status and get the same rewards as everyone else, how is that special?
Today's guests want rewards that mean something to them personally. Marketing data backs this up: personalized emails are shown to have a 25% higher open rate and 51% higher click rate than generic emails, according to Formstack.
Forward-thinking hotel marketers are creating targeted promotional offers and marketing campaigns that incentivize guests to return to the hotel.
Relevant messaging
Taking this notion of a one-to-one hotel-guest relationship further, your marketing communications will have a much higher degree of success when your hotel can target specific guests with personally relevant offers.
According to a Pardot report, 67% of consumers indicated that they are more likely to consider buying if the content they received was both authentic and helpful.
On the other hand, irrelevant email content is costing you business. The above report found that 23% of those who were disappointed by content they received would never read content from that company again with a further 41% only slightly likely to read content from that company again.
Generally speaking, your guests will be delighted when you finally learn how to give each of them something that feels uniquely crafted just for them.
When you can offer a business woman traveling solo a hotel-approved taxi ride to her meeting, you’ve succeeded.
But, if you continue to send generic emails, that same guest could receive a discount on admission to the local water park, which could turn her off to your brand entirely.
Brand consistency
The third piece of the personalization puzzle is brand consistency. Your best customers should feel that personal, one-to-one connection every time they interact with your brand.
Hotels with multiple properties should be sharing data across every location to maintain consistency in the guest relationship. Your guests should feel like you know them personally, no matter where they are in the world.
When this happens, you will create loyal customers for life.
The hospitality industry’s need for CRM and marketing automation
Overall, hotels need to focus not only on better collection of guest data but also using that data to deliver targeted guest communications.
This is possible with software such as inGuest that combines customer relationship management and marketing automation technologies, which can help hoteliers increase revenue per guest with targeted offers.
NB: This is an analysis by Carolyn Murphy, marketing content manager for Revinate. It appears here as part of Tnooz's sponsored content initiative.
NB2: Want to understand more about building loyalty with repeat guests? Click here to register for our free webinar with Tnooz and learn how you can improve your revenue per guest with guest lifecycle management.
NB3: Image by Shutterstock.