HOTEL BUSINESS REVIEW

October FOCUS: Sales & Marketing

 
October, 2011

Sales & Marketing: Effective Hotel Loyalty Programs

What do customers look for in a hotel loyalty program? How well do they work? The short answer: not as well as they might. While most hotels have loyalty programs, most are not living up to their full potential. Research has shown on average, less than 40% of program members regularly accrue points toward award redemption. That means missed opportunities for hotels to capture an even larger market share of repeat and loyal guests. This issue examines specific industry and market characteristics that make hotel loyalty programs popular. It also explores what hotels should do to make sure their loyalty programs appeal to the widest segment of travelers. We will also show you how to design and implement effective retail loyalty programs, presenting a series of best practices that hoteliers can adopt to create effective loyalty programs that establish competitive advantage and generate measurable return on investment over the long term.

This month's feature articles...

Naomi Stark

Clearly when a program is just about rewards, loyalty isn't achieved. Loyalty is defined as "faithful" and faithful is defined in part as "allegiance" and "trust"; neither of these can "points" alone achieve. After all, aren't points what programs share in common? Loyalty results from one's ability to gain trust. Loyal guests are actually saying, "I trust that you will recognize me as the individual that I am." READ MORE

Erich  Steinbock

Frequent travel programs present much value to weary travelers, who often consider their benefits as well deserved awards for the not so glamorous experiences associated with air travel. Furthermore, these programs create loyalty by recognizing the select few as more valued customers. They provide travelers with the perks of convenience and a feeling of importance. Understanding each business' unique strengths is necessary in order to allocate the right amount of resources to retain their customers. An increase of the quality of experience when staying at a hotel necessitates focus on those areas which are key drivers to creating loyalty. READ MORE

Laurence Bernstein

The Holy Grail in the hotel business is, obviously, customer loyalty. The way in which most hotel brands achieve this - or try to achieve this - is by means of customer loyalty and frequent guest reward programs. They are all extremely expensive and occupy a disproportionate amount of management time and focus. While there is no suggestion that this approach be dropped (it's far too late for that), this article discusses some of the inherent weaknesses in these programs and some of the ways in which individual properties can build true customer loyalty by focusing on the experience they deliver to their guests in their city in real time. ? READ MORE

Robin Korman

Who is a loyal customer? Often, people think that those who frequent businesses on a regular basis are loyal customers but the reality is frequent guests might not always be loyal guests. True loyalty is about emotion. In the hotel space, loyal customers prefer your hotel or brand to the point where they develop a personal attachment, one that compels them to go out of their way to stay with your hotel or brand, making them more immune to higher prices or a less convenient location. READ MORE

Ashish Gambhir

As the volume of feedback from traditional customer feedback sources continues to decline - response rates from these channels have fallen from 50% in 2007 to 28% in 2011 - mentions per brand, region, and even unit (or product) per year on social feedback channels are increasing exponentially. Customer satisfaction can no longer be relied on as a metric to predict loyalty. The presumption has been that satisfied guests will remain loyal. Research shows, however, that customer satisfaction does not always equal customer loyalty. READ MORE

Jim Coyle

Loyalty is a very complex, emotional concept, which is why it presents danger when training programs are built around increasing guest loyalty. If businesses want loyal customers, they have to get in it for the long haul and they will earn loyalty only after they have gained trust. Trust is built by a series of repeated actions, not words, or flavor-of-the-month campaigns. READ MORE

Michael McCall

Customer loyalty programs have continued to proliferate in a wide variety of firms both inside and outside of the hospitality industry. Customers have come to expect some type of reward in return for patronage. Despite this widespread growth, managers frequently question the actual value that these programs contribute to the bottom line. In this paper we offer a number of bases that might help managers think beyond their current program. READ MORE

John Swinburn

Loyalty programs are under fire these days; from being cookie cutter to not producing a return on investment. Is your loyalty program missing opportunities to maximize the experience - and the spend - of visitors who might fall through the cracks? READ MORE

Steve Earwaker

Brand loyalty can mean many things. Most hoteliers would agree that loyalty certainly means likelihood to return to a hotel, likelihood to return to the brand, and likelihood to recommend the hotel and brand. With the rise in popularity of social media, the last component-recommending the hotel and brand-has taken on even greater significance. Similarly, a loyalty program can be many things. Today's hotel loyalty programs are highly evolved marketing campaigns and should contribute to brand loyalty as defined above. Some of the questions and concerns hoteliers have are discussed in this article. READ MORE

Mark Johnson

With the earn-and-burn rate of loyalty programs slipping, hotels are looking for innovate ways to engage guests in their loyalty programs and drive point redemption. From incorporating corporate social responsibility, games, and more experiential awards into their strategies, several hotels are blazing new trails in guest loyalty. READ MORE

Shannon Dooley

How do your best customers feel when their reward reservation is mysteriously cancelled while on a weekend getaway…and your brand's reward office is closed until Monday? Chances are, not too good. One too many service disconnects like this will make your guests rethink just how "elite" they really are. In an increasingly competitive marketplace, how are you creating a world-class experience for your best guests? Heightening the service level at every stage - from corporate to property level - may help you keep your best guests' heads in your beds. READ MORE

Michelle Wohl

Before the boom of social media, hotels could attract bookings based on brand, loyalty programs, location and price. Today, recommendations and reviews are driving more bookings that anything else. So how can savvy hoteliers drive sales and loyalty in this new era of user-generated content? This article will examine practical steps hotels can take to drive loyalty and describe how leading hoteliers are winning over guests on Twitter, Facebook and other social networks. READ MORE

Mark Johnson

Many marketers mistakenly equate loyalty with rewards. Loyalty, however, denotes advocacy and commitment, not a points-based reward scheme. This belief is supported by the June 2010 Cornell Hospitality Report which contends that loyalty programs focusing on price-oriented rewards actually encourage more comparison shopping as customers seek out the most profitable loyalty program benefit. The points system, says the report, promotes loyalty to the best offer, not loyalty to the brand. READ MORE

Mark Simpson

Hotel CRM, loyalty programs, reward points and status levels can significantly boost customer retention and long-term brand loyalty. Even better, these programs give hotel marketers and on-the-ground team members deep levels of personalized data on guests that can be used to significantly improve their experience from the time of booking to the time of checkout. Your digital assets are the perfect lynchpin for achieving an exceptional guest experience. But there are a few steps to aligning business objectives with customer needs. READ MORE

Claude Guay

With brand presence on the internet being almost universal, the hospitality space has become increasingly competitive. This, coupled with the fact that price and location are major drivers in the booking decision, means that securing loyalty to any one brand is a challenge. The recent economic downturn saw many travel providers leveraging their loyalty programs in an effort to stimulate bookings and brand loyalty. And while 2010 saw a consistent increase in the share of loyalty program members, the end result is that travelers are members of multiple programs and loyalty is a fragmented commodity. This underscores the need for hospitality providers to stimulate loyalty in other ways and continuously differentiate themselves so that they remain front and center in the consumer's brand consideration set. READ MORE

Vanessa  Horwell

Hotels cannot simply attach a mobile element to their existing loyalty programs, call it mobile loyalty, and hope for the best. Both traditional/existing loyalty programs and the mobile channel (the mobile features the hotel wishes to implement) need to be integrated with each other. Vanessa Horwell looks at how future implementations of programs that revolve around points, and/or traditional recognition-personalization loyalty programs can tap into the mobile customer's psyche through both form and function. Find out the characteristics of the mobile consumer, and some recommendations for integrating loyalty programs and mobile elements into a potent reward program. READ MORE

Holly Zoba

Legendary customer service doesn't just happen overnight. If you decide to go the extra mile to keep your customers loyal, rather than just "satisfied", you will find yourself and your team investing in opportunities to increase the value of your property. This decision requires a shift in your thinking, values, and training, but one that will definitely pay off as you make great customer service a part of your culture. READ MORE

Jonathan Barsky

With improved benefits and guest-friendly rules, hotel loyalty programs are increasingly becoming one of the primary reasons for selecting a particular hotel. Loyalty programs now rank fourth among reasons why consumers select a hotel (the top three reasons are "Location", "Price", and "Past Experience"). Across the industry loyalty program membership is on the rise and the percentage of "Elite" members in these hotel programs rose sharply in 2011 (up 5%). This is good news for hotels because members of these programs are more likely to recommend the hotel, spend more per room, and are less sensitive to price increases compared to non-member guests. READ MORE

Steve Curtin

Earlier this year, American Express conducted a survey exploring attitudes and preferences toward customer service. The survey revealed seven in ten Americans (70%) are willing to spend an average of 13% more with companies they believe provide excellent customer service. Even so, the same survey indicated that six in ten Americans (60%) believe businesses haven't increased their focus on providing good customer service. Among this group, 26% think companies are actually paying less attention to service. Consider these three truths about exceptional customer service.. READ MORE

Joyce Gioia

The Front Desk is your front line for guest services. Most hotels do a very good job training their front desk people to be cordial. They understand the opportunity... and the liability. At one time or another, we have all experienced walking into a hotel and receiving a luke-warm reception from the person behind the counter. When that happens, in my brain, I hear the words, “Oh boy, I'm in for a mediocre guest experience here―at best”. In addition, not surprisingly, that less-than-optimum experience usually happens. READ MORE

Didi Lutz

Understanding the new rules of the crisis management game is important to protecting your hotel's reputation. While the real time that social networks offer these days can be horrific when a crisis hits, at least you will be prepared to face the worst. With a crisis plan in place and a great team behind you, your business will be ready to tackle any questionable social media post… Read my story READ MORE

Mike Handelsman

Hotel owners looking to sell their business often make a few common mistakes, ranging from not properly preparing for the sale to not offering seller financing. However, in a competitive marketplace there is not much room for error. These tips will guide you on increasing your chances of having a successful sale by paying attention to details that are often overlooked. READ MORE

Kalen Willis

A hotel stay doesn't begin when guests walk into your property - it begins with the design scheme and the purchase of FF&E elements. Working closely with your interior designer and your FF&E supplier, your objective should be to turn a "hotel stay" into a "hotel experience." So what are some practical yet economical ideas for enhancing the look of your hotel? This article provides some tips for achieving your objective effectively as you keep one eye on design and the other eye on the bottom line. I hope you find these suggestions helpful. Let me know your thoughts and if I can answer any questions. READ MORE

Bonnie Knutson

If your hotel is moving towards being green, it is undoubtedly addressing each of the 3Rs - reduce, reuse, and recycle. Since I am not even close to being an engineer, how to implement these Rs best left to these experts. I want to put the spotlight on being green by looking at the most important element in your hotel's existence - marketing to current and potential guests. Aside from the long-term ROI of going green, being a green hotel is a positioning tool for the brand. Research by the American Marketing Association shows that the primary reason for any business to go green is to generation good Public Relations; the second reason is to reach specific target markets. And in this ecologically conscious business environment, both reasons are critical to your hotel. READ MORE

Kristine Sova

While seemingly unimportant, those pesky one-pagers known as the “Form I-9” that all employers are required to complete for new hires can be the source of significant liability. In fiscal year 2010, ICE agents recovered penalties of $6.9 million from businesses, criminally charged nearly 200 business owners and managers with immigration violations, and conducted more than 2,000 compliance audits of employer-prepared I-9 work eligibility forms. READ MORE

Soy Williams

A line of travelers gliding effortlessly through the city scape on SegwayR PTs might invoke scenes from a 20th century sci-fi movie. Less commonplace might be an amputee among them using a seat that has been retrofitted onto the device. Something of a novelty still, SegwayR PTs have been at the hub of activity in the disability rights realm. These and other power-driven mobility devices have the United States government requiring lodging establishments to permit individuals with mobility disabilities using them in any areas of these facilities. READ MORE

Gary Cardono

Water conservation is an important practice to adopt in today's uneasy economy as it is a cost control and a way to enhance efficiency for a hotel property. In an industry that thrives on recreating the home experience away from home, hotels have much to gain by employing water conservation practices. Guests enjoy unwinding from a long business day in a warm shower and relaxing by a pool surrounded by beautiful landscapes. But these amenities can result in significant water costs for a hotel. Fortunately in today's energy efficient world, there are effective ways to decrease water consumption that will result in significant cost savings. READ MORE

Christian  Koestler

The formal practice and profession of revenue management continues to be one of change and evolution. Keeping up with advances in technology, changes in marketing and increasing numbers and types of distribution channels requires more flexibility than ever before. Amid these developments, the online travel agency (OTA) has forever changed the rules of revenue management, affecting areas ranging from communications to rate parity. Here, Christian Koestler of Lixto, Inc., outlines some of the significant ways OTAs are impacting revenue management today, and what managers can look forward to in the future. READ MORE

Michael Wildes

United States immigration laws provide ample opportunities for American businesspersons to thrive despite current economic conditions. Specifically, the Immigration and Nationality Act's (INA) EB-5 program allows foreign investors to funnel their resources into local business projects in exchange for visas. Notably, the hospitality industry has achieved unprecedented success from EB-5's attractive provisions, with its latest projects largely funded by millions in foreign capital. As a result, hotel and resort owners are strongly encouraged to visit their local regional centers and take advantage of the laundry list of opportunities still available to market to overseas investors. READ MORE

Rani  Bhattacharyya

In this article I will try to explain the recent efforts by local governments to develop green business programs in partnership with resident companies. These programs not only help the communities present a better image of themselves, but can also be a leveraging tool for property owners and managers interested in defining a new niche within local and national markets. I will also provide a few reasons why these programs can benefit the hospitality industry and actions that property managers and owners can take to make these partnerships improve their market position. READ MORE

Josiah MacKenzie

Online guest feedback is one of the biggest opportunities hotel companies have today for improving product quality and maximizing revenue. Yet too many hotel executives do not have the adequate supporting technology to take advantage of this opportunity. This article will provide some criteria to help you select a tool that fits your needs. READ MORE

Benu Aggarwal

In the recent months Google has been trying out new projects and applications at an almost feverish pace. They seem to have made the transition from using names that made no sense in relation to the project (Google Hot Pot) to taking a page from Prince's playbook and going with a symbol that throws wrenches into grammatical structure and HTML code (Google+). You may be asking yourself these questions: what is Google+, what relationship does it have with the Google +1 Button, what are Circles, what is a Hangout, and most importantly, how do I get involved in this? READ MORE

Jennifer Nagy

It is important for the public relations and marketing industry to continue moving forward as the world of media and technology changes, updating yesterday's strategies and tactics to ensure that we, as marketing professionals, are most effective at spreading the word for our clients, our companies or our brands. So to help you to update your PR strategies, here are three ways to rethink your outdated hotel marketing and media strategies and become more effective at generating consumer interest and inspiring action (i.e. bookings). READ MORE

Jesse Boles

Are your employees masters of their crafts? How well do you think they are meeting your standards when you're not around? Developing your employees into true masters of their crafts requires holding them accountable to your hotel's standards. By offering up reinforcement that encourages the right behaviors and providing corrective coaching when your standards aren't being met, you can teach employees how to provide a guest experience that keeps people coming back, and even make your job a little easier. Jesse Boles of FreemanGroup tells you how to make the most of your ongoing training efforts. READ MORE

Bob  Kelleher

They're entering our hotels every day! They're not going away! They number in the millions! We're not talking about bedbugs! We're talking about Generation Y, and they're entering your hotels as employees, guests, suppliers, conference attendees, wedding guests, and vendors. And they're not going away. Your hotel's success will be dependent on knowing how to embrace them, communicate with them, hire them, engage them, and recognize and reward them. I use to tell my managers "treat people they way they you want to be treated! The new message is "treat people the way they want to be treated." READ MORE

Janine Roberts

Buying Groups, also known as Group Purchasing Organizations (GPOs) have been around for almost a century, and provide value to a number of industries, including Hospitality. The concept behind Buying Groups is laudable - small, independently run businesses can combine their purchasing power to negotiate better discounts traditionally only available to major enterprises. By participating in a Buying Group, businesses can theoretically save on purchasing costs by 'outsourcing' their purchasing capabilities to a Buying Group. READ MORE

Clara  Rose

How does the ADA community affect your bottom line? Is your property ADA compliant? Beyond compliant, is it actually ADA friendly? According to the U.S. Department of Labor, this demographic (the ADA community) has more than $175 billion in discretionary spending power. The business owners and hospitality properties that recognize the ADA community and their potential revenue contributions, surely have the edge. Such companies are working hard to be not just ADA compliant but truly ADA friendly. They are making a difference, while capturing some of the revenue dollars that affect their bottom line. READ MORE

Kathleen Pohlid

There is only one chance to make a good first impression. Trite as it may be, creating a good first impression can pave the way to attract business, establish a positive brand, and thwart potential liability. Hotels and other establishments which neglect their parking lots miss out on the opportunity to attract business. Worse yet, they may raise the potential for costly litigation and non-compliance under the Americans with Disabilities Act. As we will discuss, ADA compliant parking involves much more than designating a few parking spots as handicap accessible. READ MORE

Caroline Cooper

The success of our relationships determines the success of our business. Studies have shown that one of the bases of good leadership is the trust and confidence your team has in you. If they trust you they will go through hell and high water for you. Trust and confidence is built on good relationships, trustworthiness and good ethics. But where do we begin in engaging people to build these relationships, and in creating a climate of understanding and trust? READ MORE

Paul van Meerendonk

In today's highly competitive hospitality market, a heightened understanding of a guest's preferences and total worth will enhance a guest's experience, maximize revenue and ensure loyalty, while establishing market share for your hotel. While there have been many advances in revenue management throughout the years and market segmentation and channel management strategies have become more targeted in identifying and reaching guests who could add revenue to a hotel, some hoteliers do still not understand the full value of their guests. READ MORE

Jamie Womack

Social media has become an integral part of the industry's marketing mix to build brands and drive bookings. However, when it comes to using social media for talent recruitment, organizations are still learning this powerful tool. A recent survey conducted by CareerBuilder found that one in four job seekers expect companies to have a presence in social media. Find out what candidates are looking for in social media and how some of the industry's leading companies are using social media to enhance their employment brand and engage employees and candidates on a more personal level. READ MORE

Joyce Gioia

Are you ready for the recovery? With the economy improving in parts of the world and others not far behind, sellers' market for labor will be quickly upon us. Hoteliers will again find themselves struggling to recruit the talent they want and need. To help you with these challenges, we have brought together solutions from around the world that you can implement tomorrow. These proven ideas have worked for others and can certainly work for you―without spending a lot of money. READ MORE

Coming up in March 1970...