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Hospitality Industry

How Customer Loyalty is Changing for the Hospitality Industry

Acquiring a new customer can cost as high as five times more than retaining an existing customer. A customer’s loyalty has been recognised as the dominant factor in the success of the hospitality industry where quality of guest experience matters the most. So, how can you keep customers loyal in this competitive, digital economy?

Delivering value through opportunities and convenience is the best way to retain loyalty. There are plenty of digital empires out there such as Google, Amazon who take ownership of customers and deliver value. There is a reason we are all Prime members: convenience and perks. A couple of years back loyalty meant signing up for membership, receiving emails about product promotions & discounts, getting perks and paying less in return for repeat visits. It was a generalized approach that worked because there was less competition.

How loyalty has changed

Through data collected across different platforms, we know that customers believe value doesn’t always equate to free. An experience or service they would pay and enjoy would be just as much incentive for them to join as a free stay.

Guests want to feel appreciated. After all, it is a competitive world and they have chosen you when they can spend their money anywhere. A loyalty program is a gesture of good faith and reciprocity that you acknowledge and appreciate them.

What loyalty programs mean for hospitality

Loyalty is not about tiers or layers. Loyalty is about knowing your guests. Adding a paid loyalty program option can drive higher spend and satisfaction. Willingness to pay for enhanced benefits is significantly higher among Gen Z (47%) and Millennials (46%), as well as households with children (44%) and early technology adopters (69%).  Loyalty programs drive incremental sales, higher program engagement, and other significant operational benefits.

Key components of a loyalty program

1. One size fits all doesn’t work anymore

This trend started off because it was convenient, cost-effective and easy. Today with many more options available, customers don’t want to be treated similar to the next person. With the amount of data generated through demographics and purchase history, tailored experiences are possible.

Hospitality should embrace new loyalty currencies and experiences beyond points. What can you do for a guest based on what you know that would make them loyal? Loyalty programs that establish positive emotional connections with members see more of their membership increasing their spend with the brand. Experiences need to be anchored not on price but on other more emotive or psychological factors.

2. Make customer service a priority

A Deloitte report shows that nearly 40% of guests positively, organically promote their experience when a problem gets fixed quickly. Seventy-six percent of customers believe a company’s customer service is a reflection of how much they value customers, according to the 2015 Aspect Consumer Experience Survey.

When a guest waits in line, calls with an issue, asks a question on social media or works with an representative to find what package would work best – they are keeping score. This is why you must avoid having points expire or having unattainable or unavailable rewards or personnel who don’t know the details of the program.

3. Generate Data

Today, industry leaders concur that loyalty programs and the guest data gathered through them are the best bet to increase revenue and move forward. Push surveys, reward-based surveys both on-site and online help in identifying strategies and working towards giving what customers expect and how they want it. Gaining valuable insight such as what drives purchase behaviour can be vital data that gives rise to business and marketing strategies.

4. Convenience

Streamlining the process of signing up across all platforms so that it is smooth rather than forcing customers to go through an automated maze over the phone/email. 26% of customers reported that brands ask for too much information or the enrollment process takes too long. With evolution in preferences, shopping habits and digitization the question millennials ask is, “What is in it for me?”

As a hospitality provider, you must have have a strong digital presence with omni-channel engagement to enable convenience for your customers allowing development of robust communication and in turn, relationships. Eliminate multiple information exchanges as you build guest profiles so that when the guests on-site are also greeted with instant recognition, access to information and uniform experiences across platforms. The more seamless of an experience it is for the customers, the more advantages there will be over competition.

Get started today

With an increasing number of millennials becoming travellers, their expectation of engagement across platforms provides guidance for engagement across different generations. A report from last year, shows that 82% of millennials belong to at least one loyalty program which they redeem regularly. With evolving technology, data sets across different metrics will allow predictive analysis where an organization can anticipate the needs of the guest and proceed accordingly.

With technology integrating the front and back ends, there is more room for your staff to do what they do best, personalize interaction. While software is the way to increase customer engagement, human interactions are more critical than ever and offer an elegant way to loyalty.

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