Looking into the top lists of hotel loyalty programs in 2017, there is one common factor that begs the question:
Where is the promise of exclusive and individual service? Customers are often treated as pure data, based on how much and how often they spend with the brand. In these listings, some of the most personalized services called “Insider benefits” meant including complimentary internet access, discounted room rates or exclusive access to discounted vacation packages. As most of the hotels already provide free and limitless internet access, and “exclusive access to discounted vacation packages” doesn't really sound that luring, it raises the question of how these brands can retain their loyal customers.
Brand switching seems to be a common issue for many companies nowadays. A loyalty program that treats customers based on numbers doesn’t create brand loyalty or an experience that attracts customers to stay with a specific brand. In all simplicity, relying on a point-based discount loyalty program isn’t enough anymore, since it doesn't take into account the share that customers spend with other brands. According to a survey by Deloitte’s Travel, Hospitality and Leisure practice roughly one third of hotel loyalty members are at risk of switching their preferred brand, and 50 percent of their annual hotel spend is not with their preferred brand. In the hospitality industry a retention rate of a mere 35% is considered adequate, but it also points out that brands could do more to have their customers return. Studies show that a returning customer can spend up to 167% more than a first-timer, and that the customer acquisition cost is generally 7 to 11 times more expensive than customer retention. The conclusion of these studies suggests brands should rebuild their loyalty program by encouraging specific behavior with unexpected rewards, making rewards personally meaningful, not penalizing behavior that loyalty programs encourage and by reshaping the customer experience. These suggestions are identical to the solutions PRE:MIND offers to its client brands.
PRE:MIND makes this data actionable
If the customer could be recognized by your staff, the opportunity of creating a meaningful level of customer loyalty and utilizing the knowledge of customer preferences could be used to preserve brand loyalty. The common pattern is that the relationship between the customer and the hotel they frequently stay at, is actually between the customer and a specific staff member - not the brand itself. Teaching new staff individually to recognize a frequent stayer would not only be inefficient but also time consuming, if not impossible. On top of that, the data for solving this problem already exists: consuming frequency and amounts are listed within the loyalty programs, and the staff is aware of how an individual regularly wishes to be treated. Some brands have moved their CRM-data into cloud services, yet still struggle to utilize that information in its fullest potential. PRE:MIND makes this data actionable to our client brands, and brings all these components into one platform. If the knowledge of a customer’s preferences and their consuming patterns with the brand could be shared between all staff members, the experience wouldn’t be restricted as personal communication between individuals—it would be communication with the whole brand.
In the quest for delivering on experiential retail, stores have morphed into things resembling anything from amusement parks to living rooms. And while there is nothing wrong with that – it hasn't done much to personalise the experience.Read "Customer identification key to experience shopping"