Absolutdata-Customer-Loyalty- 10-Ways -to- Create- a- Program- that- Works

Sure, customer loyalty is hard to obtain, but keeping it alive is even more challenging. While many companies in the hospitality industry regularly dole out loyalty cards to try to increase repeat business, only a few actually succeed. The biggest mistake hoteliers make is putting in the bare minimum effort into the loyalty program, which results in a card used sparingly at best. Here, we’re serving up ten ways to improve your loyalty program and see results.

1. Promote Card Usage with Tier Upgrades

Customers simply won’t use a loyalty card whose benefits aren’t clear. Setting up small, achievable goals from the beginning can help incentivize use of the card while keeping the concept of the program intact.

When customers reach the initial easy targets, give them rewards to continue using the program. Customer behavior isn’t easy to predict, but simulating the anticipated steps to reach each tier can help remove the guesswork, so long as you also offer unique incentives to customers who infrequently use the card.

Nobody likes starting over, so don’t create tier programs that reset yearly. Instead, create loyalty by allowing customers to use additional points to maintain their existing tier for another year. That way, hoteliers can keep customers actively engaged at every step.

2. Use Technology to Personalize Offerings

To keep pace with millennial customers’ demands, hospitality marketers need to use sophisticated promotions with streamlined purchases and sign-ups. But technology isn’t only helpful for customer satisfaction and engagement.

New analytics and data opportunities can also capture key information that was never before available, such as preferences and experiences at the hotel. An ecosystem of information that pulls from multiple apps and platforms can capture data on birthday excursions and anniversaries and use that information for promotions next year.

3. Manage Brand Portfolios by Customer

When multinational hospitality companies manage large portfolios of brands, they must also understand the unique drivers of customer loyalty for each brand.

Customer lifecycle analytics can give loyalty program managers more insight into their guests and the types of promotions they’re interested in. If a conglomerate has a customer who has stayed with multiple of their nationwide brands, then it’s wise to target that customer with promotions for the brand that they’ve reported the most satisfaction with, or the one they stay with the most often.

4. Use Social Media, For Fun and Profit

Word of mouth is a powerful thing, and on social media the phenomenon is magnified. Loyalty programs that are truly effective need an engaging social story to help remind followers what they love about the program and keep them participating. Social media is also a treasure trove for data mining, where customer preferences can be captured and turned into highly targeted promotions.

5. Continually Improve Mobile Apps

Smartphones have completely altered the hospitality landscape. Hotel apps can now provide room feature selection, function as mobile room keys, allow for check in and even generate room service orders.

But creating an app is only the beginning, since customer behaviors and demands rapidly change. Professionals in hospitality loyalty should embed analytics into the apps, websites, and social media so that trends can be identified and capitalized on.

6. Choose Your Partners Wisely

Who you choose to partner with when developing a loyalty program has a big impact on its results. Hotel guests who have the opportunity to reap rewards from brands that match their lifestyle will not only be more likely to use the program, but will also see your hotel as relevant to their needs. So, know your travelers well and you’ll create loyalty in more ways than one.

7. Give Uniquely Desired Rewards

What’s the point of rewards that are completely irrelevant?

Skimpy rewards programs run the risk of aggravating customers. Guesswork should never be the strategy when it comes to developing rewards. Instead, utilize analytics and data mining to create unique customer personas, which can then be used to develop customized rewards programs.

Let’s say there’s a customer segment in a hotel chain that would rather have air miles than hotel points. By satisfying that desire, you can develop strong loyalty in that segment.

8. Make Redeeming Fast and Easy

Customers don’t collect points for the sake of collecting points. Rather, they want to earn products or services. If you don’t streamline the process of redeeming those points, customers will quickly become disinterested. Instead, allow them to quickly spend their points on flight deals, luxury goods, and more. This quick gratification with their build trust in the program, and incentivize them to build up more points.

And don’t forget about redemption analytics. You can help create additional promotions that customers will truly want to be part of by analyzing what’s already working.

9. Be Strategic with Resources

Bonus reward promotions are very common in loyalty programs. These types of rewards sometimes focus too heavily on sheer customer volume rather than incremental business, which only serves to drive the need for further promotions.

Some customers will come to the hotel even without being given a promotion, so targeting them with a bonus reward is simply a waste. These type of reliable customers must be separated out from those who can only be persuaded with bonus rewards. Being strategic with your resources and the budget of the program can help a stop wasteful expenditure.

10. Identify and Improve Wallet Share

Wallet share refers to the portion a customer spends on any given product or service with your brand relative to other providers. It’s hard to fully understand the success of any loyalty program without knowing wallet share data, which includes purchases made outside of the brand.

Surveys are one way to get an all-inclusive view of each customer. Acquiring this type of data requires collaboration between market research, operations, and revenue management departments. Calculating wallet share can help reveal the true nature of a customer’s life time value and inform a more holistic approach to marketing.

When taken together, these methods can drastically increase a loyalty program’s chance of success. By using data in service of the customer, loyalty program managers can strategize the sometimes fluid concept of incentivization to drive predictable repeat business.

Authored by Kunal Jain – Analytics and Partnerships at Absolutdata Analytics & Richa Kapoor – Marketing and Communication Manager at Absolutdata