ARTICLE No.2

Promises are cheap

Exclusive experiences are the new currency

Hotel brands have the ability to make a real difference in the lives of customers, so...

where is the promise of exclusive and individual service for VIPs?

It is a big promise to make but if it can be fulfilled, the spoils are boundless. Unsurprisingly, hotels like to focus on their high-end customers and ambassadors as such loyalties drive long-term growth and brand strength. Analysis reveals some personalised services to this group, called “Insider benefits”, include complimentary internet access, discounted room rates, or exclusive access to discounted vacation packages, and redemption of reward points.

In a world where those with money can independently access unique and spontaneous experiences–scuba diving one day and jungle trekking the next–are insider benefits and reward points enough?

The reality is that VIP retention rates fluctuate between 30-45%, and while loyal VIP customers usually spend up to 167% than a new VIP–in other words, losing a single VIP is a 700-1100% loss on investment. Hotels are left with a stark choice: either control costs and forget about making grand promises or make investments and deliver on the promise of genuinely exclusive and individual service.

If brands decide to adopt the latter approach then hotels and luxury brands need to find new ways to achieve exclusive and individual service. The key is knowing the profile of your top customers; what are their priorities, what are their preferences, reasons for staying with you, and what would make their lives easier. It is encouraging that CRM’s collect this information; however, it is of little use collecting dust.

Currently, the VIP experience relies too heavily on inconsistent communication and interactions with hotel property staff. When staff leave the company or a new VIP visits where there is no familiarity, the relationship to the brand becomes vulnerable.

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Hotel staff need to be empowered to use CRM information, develop their interpersonal skills and judgement to cater to the needs and wants of VIP’s. It means knowing the profile of a VIP even if the staff member has never met them before. A VIP’s relationship and trust should also stay with the brand at all times. The alternative is to risk creating a trust-gap and the opportunity for VIP’s to switch brands.

The next step is for hotels to work out how to give VIP’s what they want. The good news is that imagination is as limitless, as the number of possible promotions to be created. Brand to brand promotions are a fantastic way for marketing and loyalty teams to brainstorm new ways of creating an exciting and unique VIP experiences. Unique is what VIP’s want, but cannot buy.

Existing loyalty programs should be revamped by encouraging VIP night stays with unexpected rewards, making rewards personally meaningful, and by reshaping the customer experience.

Make that promise.