Throw your Hotel Loyalty Program out the Window
That’s right, hotel loyalty programs are part of the past. Guest behavior changes, so should your loyalty scheme.
This should not come as news to you, it’s really been out on the streets for some time now. As returning guests are key to any hotel management structure, we'll have a look at current challenges and possible solutions.
There are several simple reasons why loyalty programs have become obsolete:
- The return of being a loyal customer is not immediate
- The return of loyalty is not rewarding to the customer
- Alternatives are too easy to find and access
- There are plenty of pitfalls related to the effort of having someone become part of your loyalty program and getting them to stick around to reap the benefits.
Let's break these reasons down a bit further:
Consumers want everything now. There is no need to wait. The internet put consumption at the fingertips of anyone on the globe.
Hence there is no reason why consumers would want to wait long to get a return on their loyalty either.
In stead they’d prefer getting it now.
Programs rarely offer true value to loyal customers.
A free stay every 50 nights? Just imagine how much I would desire the 51st night per year, yet again at the chain where I spent 15% of my nights this year already.
With chains, loyalty programs are still regularly an important reason for which customers return.
But loyalty programs are starting to show cracks in their performance and most chains have de-valuated their loyalty programs over the last couple of years.
Too many alternatives
The big enemy of loyalty is choice. And if anything is readily available nowadays to consumers, it’s choice.
OTA’s enabled ease of choice. Then meta-search engines built a mash of these OTA’s. And all of these travel supermarkets incorporate reviews and allow for ever easier search and property comparison.
So if there's anything easy to avoid for consumers, it's routine.
Pitfalls before customers join loyalty programs and stick around
There are many pitfalls to keep your customers loyal to you, and the competition around the corner is relentless. A lower rate offered by the competition will easily lure supposedly loyal customers into the open arms of your competitors.
- Signing up:
If your guests need to do go through any type of lengthy sign-up process that does not guide them to something that they want immediately, then your prospects will not sign up. Fair is fair, most of your guests have enough work on their desks as it is.
- Maintaining the loyalty of any customer:
If your guests need to have a loyalty card, then I can tell you upfront that their wallet is too small for your program. And any password to access member areas is impossible to remember, especially keeping in mind your customers would only log in once or twice per year.
And whilst I personally am a huge fan of revenue management, and it almost hurts to admit this, think twice before you actively start yielding your rates to your loyal guests. To regular guests this very often feels like you are betraying their loyalty. They are coming back to you on a regular basis and as a thank you they receive a higher rate on their 4th stay.
There are also plenty of mistakes that many marketeers and sales managers are easily lured in to. Try and bug your carefully selected guests with three unsolicited marketing emails, and they’ll probably unsubscribe from your mailing list and ignore all your future messages.
A different approach toward loyalty
In short a core question to ask yourself today is why your customers are loyal to you? Is it because of your brand? Is it because of your loyalty points? Really, is it?
Most travelers have a large list of items that rank higher on their agenda then being loyal to your hotel.
So if loyalty is so hard to poor into a program, what can you do?
If everything that customers look for is about what they can get now; ensure the advantages you offer are immediately available. Think about a lower rate in the form of a discount bookable for members only. Alternatively consider a guaranteed room upgrade, complimentary access to specific onsite amenities, or a truly funny gift that will simply put a smile on their face.
Whatever you offer, try to focus on ensuring it's
- Available immediately
- Tangible, and
- Rewarding to the customer.
Don't complicate access to getting access to any advantages. Log-ins require effort. Maybe if you have a social sign-in button customers you can skip this entire hurdle.
Loyalty is not easy to obtain, and loyal customers are not to be taken lightly. Think every single one your marketing actions through. Make sure hat your offers are real, and try to push them when customers are looking for you. Don't blast them with cold offers that are not adapted to the needs of individual travelers.
Make your actions remarkable. Remarkable gifts generate word of mouth. Having said that, I believe it's obvious you should include social media in into the communication strategy of your loyalty program. Loyalty is so much easier to maintain when you listen to your guests and speak with them.
No matter how bad marketeers want to believe the contrary, traditional guest loyalty programs are a thing of the past.
Don’t get me wrong. Guest loyalty does exist.
It’s just very hard to squeeze their loyalty into a square program based on points and hard-to-obtain rewards.
Remko West @ Xotels