Winning Customer Loyalty in the Hospitality Business
Summary: As a hospitality program manager, you work hard to curate amazing guest experiences. And while a big part of that effort takes place within the context of your face-to-face interactions with them, that’s only part of the customer’s “journey” with your brand. Hospitality loyalty programs can help you close the loop on providing a review-worthy experience with your hospitality brand, from start to finish.
What do Hospitality Loyalty Programs Really Mean for You?
Part of any phenomenal guest experience is the magic that makes it all work. As hospitality program managers, anticipating our customers’ needs before even they have them, is important. We go the extra mile (if not several more) to make sure that guests want for nothing. And we create seamless interactions that leave the impression that each, of what could be hundreds or even thousands of customers, is the only one that matters to us in that exact moment.
Yet, we often have a difficult time translating that commitment to other aspects of our guests’ journey. We don’t leverage these experiences in driving new business. We sell significant aspects of the customer path-to-purchase off to the highest bidder. We don’t do a great job at understanding who our most valuable guests are, or what we can do to increase their ranks.
Many of us are looking to technology in order to help better understand and manage the guest experience in a way that mimics our general ethos, providing a seamless value-based experience over every platform, channel and device where they engage with us. More than that, we’re looking to leverage each experience to help tell a story about what we value, and use it to drive repeat business.
A loyalty program may not be the first solution that pops into your head for meeting these goals, but there’s a lot to dig into here. In fact, more advanced loyalty and rewards software offers a lot of value by way of tools that can help you improve your overall guest experience, drive word of mouth, and make a significant impact on your bottom line.
Before You Get Started
If you’re new to loyalty and aren’t sure what this all means, you may want to check out our “Guide to Getting Started with Customer Loyalty”, first. This post is going to skip over loyalty program fundamentals and dig straight into how hospitality programs specifically can optimize customer retention and engagement with loyalty software. If you’re ‘old hat’, but are looking to upgrade your customer retention capabilities, you may want to take the strategies we’ve outlined here into account, as you move forward with figuring out your next steps.
Spreading the Word
Word-of-mouth is likely one of the most powerful components in your hospitality marketing toolkit. In fact, Hospitality.com stated referrals drove more than 40% of hotel reservations, worldwide in 2017. Our choice then isn’t between whether or not to focus on word-of-mouth, but how well we can leverage loyalty programs to help drive it?
Love ‘em or hate ‘em review aggregators like Trip Advisor, Yelp, Google Reviews, and others can have a big impact on your business. In addition to driving revenue, they’re valuable components of your SEO, PR, and PPC strategy. Using loyalty to drive reviews of your program with marketing automation
- Solicit – “The answer to every question you don’t ask is “no”’. Garner reviews from your loyalty program members by sending an automated follow up email surveying various aspects of their experience. Offer additional loyalty program points for the customers that do.
- Record – One of the great things about omnichannel loyalty software is that it allows you to maintain a single unified customer record, across touchpoints. Where possible, attach customer reviews to each members’ unique profile. This will give you insight as to how their experience has evolved and help your employees closely monitor future engagements.
- Engage – The way you respond to a negative review often says as much about your business as having the review, in the first place. Leverage your rewards program to help offset negative experiences.
Get Social Shares
Social media is a powerful tool for earning word-of-mouth business. The average facebook user now has about 338 friends. How much would you pay to connect with each of these people?
Your program should offer rewards for sharing your experience on social with a check-in or other recommendation. Some mnichannel loyalty programs like bLoyal have tools to identify a guest by their social media handle. Track these mentions with almost any social media monitoring tools and apply discounts directly to the guests account based off of your branded hash or name tags.
Leverage Brand Loyalists
We’ve talked quite a bit about how referral, or ambassador programs can drive revenue over the past couple of years. One of the most frequent questions we get, with regards to hospitality-based businesses (especially if they’re a larger spend, like a cruise or tourist destination) goes, as follows:
“Customers don’t visit me very often, but they spend a lot. How can I use loyalty to expand beyond my customer base when I may only transact with a specific guest once or twice per year.”
Ambassador programs are a great place to start. Past guests should be able to earn points and other rewards, based on the new business that they’re sending your way. If a guest who only does business with you, once yearly, recommends your cruise line to ten other people who subsequently purchase cruises, it would be well worth your time to offer them a steep reward, for doing so.
The end user isn’t always your target, though. In the case of a restaurant located in close proximity to a hotel, for instance, it may make more sense to offer rewards directly to concierges. If the concierge has directed ten families to your restaurant over the course of a night, it’s equally valuable to pay for their dinner.
One of the important lessons that retail businesses have learned in the last ten years is that you can learn a lot about a customer by what they purchase. Using purchase-level segmentation build into most integrated loyalty systems helps you build more relevant content. What does this have to do with spreading the word about your loyalty program? More relevant messaging means that guests are more likely to pay attention to and share your content. The more attention they pay to you, the more likely you are to be top-of-mind when friends ask for recommendations.
On the whole, the average hospitality rewards setup is pretty basic. They tend to run a bit like a frequent buyer programs; you stay, dine, or book a certain number of times, earning “X” in the process. Many programs never move beyond that model, however. Omnichannel rewards have come a long way, and most hospitality-based customer retention strategies leave quite a bit of money on the table, in terms of opportunities to use their loyalty program in driving the bottom line.
Here are some suggestions for using your loyalty program to get a leg up:
Winning the Affiliate Game
The website Static Brain says that 57% of hospitality based reservations, across verticals, are now made online. An increasing share of that traffic is happening through affiliates like Expedia, Kayak, or Travelocity. And with good reason. These sites offer major discount to customers. But that occupancy often comes at the expense of loyalty to your brand. While you may be filling in vacancies, profit margin shrinks and your guest’s allegiance transfers from you to the affiliate, in the process.
This isn’t exclusive to the likes of hotels and car rental agencies, though. Many restaurants and smaller independent businesses face a similar dilemma. With sites such as Yelp, Bite Squad, and Open Table, getting thousands of reservations every hour, they become a major onramp for new and returning guests. As a hospitality program manager, you already know that.
Whatever the case, you don’t want to sacrifice your value proposition, but you need to both leverage and compete with these sites on a value-added basis, in order to get the best of both worlds. The most pertinent question is “What does a customer have to gain by reserving or purchasing directly through you?”
Offering a simple point multiplier is a great place to start when addressing ways to get a leg up on affiliate programs. Without the profit cut by third-party partners, you have more margin to work with and giving clients who book through you added points for doing so, can make a big difference in your bottom line. Split the difference with a point multiplier that will keep members coming back to your brand, vs outside discount sites.
VIP program Access
Your VIP programs can be especially important for hospitality-based programs and it’s something that affiliates don’t have much access to. Be careful not to turn your VIP program into a simple
“Buy 10 get 1 Free”, though. Many affiliates offer similar programs and merchants should offer an incentive that third-party companies can’t possibly compete with. For example:
- No cost cancellations, instant check-in, reserved seating.
- If you’re a business that has premium upgrades, leverage them as awards for clients who faithfully engage your program at the local level.
- Use other hospitality industry partnership to increase your loyalty program value proposition.
Add-ons are an important part of your hospitality business – whether it’s a day at the spa or a high-end bottle of wine. Use your loyalty program to introduce premium products by rewarding members with additional % off discounts on sister products.
For example, if your hotel has a spa, leverage the points earned during the booking process, towards a reward that offers a free seaweed wrap. If completed, you’ve used your rewards to introduce customers to a new product or service and provided additional value to the guest, that will keep them coming back.
One of the most important ways that hospitality managers need to rethink the way they use awards programs to drive business, is how they are accessed. Many of the affiliate programs we previously spoke about are winning over customers, based simply on the fact that they’re accessible over all the devices where customers now spend time.
Building an omnichannel loyalty program, isn’t as difficult or expensive as it once was. Many cloud-based programs integrate (either through custom development or pre-built integration) directly with the most popular hospitality, food-service, and entertainment-based checkout solutions.
Grow Your “VIP” offerings
Recognizing your most frequent (and valuable) guests is important. They spend more, visit with greater frequency, and talk your business up to their friends. Integrated omnichannel loyalty provides us lots of new tools for expanding your programs and controlling the guest experience, from beginning to end.
On a recent SlideShare presentation, the bLoyal team talked about tiered offerings and how they can drive more loyal customers. Tiered programs provide guests with increasingly more valuable rewards based on how often they performs a desired action. The more, visits, spends, or referrals the guest has, the greater the value of their program.
In order to stay in this tier, the guest must continually meet a defined goal. This drives personal investment for those who want to get the best benefits.
You may not think of a service like “Post Mates” as a hospitality based business. Yet they essentially provide a concierge style experience for your home. Several months ago, Post Mates launched a subscription model, in which they charged top users a monthly subscription fee for unlimited uses.
Hospitality loyalty programs can leverage these unique tools to drive subscription revenues with special offers for their most regular guests, including business travelers, neighborhood residents, and more.
Other Hospitality Loyalty Program Ideas
Looking for other great loyalty program ideas for your establishment or hospitality business?
- Restaurants can create locals-only discount programs to drive their base diners.
- Taxi services can create awards for booking airport runs with them.
- Multi-unit hotels, motels, and lodges can build awards around local attractions
- Wineries and Breweries can create club based wine or beer “of the month” clubs
- Theme parks can award points based on awards and social mentions
- Cruise lines can provide exclusive perks for loyalty program members
If you’re looking to build an incredible hospitality loyalty program that generates repeat business with increased word of mouth, bLoyal can offer you a place to start. Learn more by requesting a free demo, above, or contact us at firstname.lastname@example.org.