Brand Loyalty – The Rules of Engagement

by Jan 31, 2018Hotel Operations

“In the world of Internet Customer Service, it’s important to remember your competitor is only one click away.”

– Doug Warne

T hink about the brands you use often; are they the same brands that you were using five years ago? Odds are that they have changed, and your loyalties have shifted, but ever wondered why? Customers, especially the Millennials, generally love variety at a good price, and sellers are beginning to understand that. E-commerce, in particular, has enabled consumers to change their preferences with the help of just one swipe, and Amazon’s #AurDikhao campaign is a perfect example of the company targeting this change in consumer behaviour. The campaign showcases the wide variety of product choices Amazon makes available to its customers conveniently on their phones. What’s more, the “swipe right” feature (to show liking for a product/service) is now being used by several apps, allowing you to choose and share your preference for almost everything – a service, a merchandise, a restaurant, and even a hotel.

Therefore, it’s no surprise that customers these days are a lot more aware of the offerings of a brand vis-à-vis its competitors; and keeping them loyal has become more challenging. Brand loyalty is built on the cumulative effect of multiple satisfying experiences with a certain brand. In the world of hospitality, brands across board are striving to constantly engage with their guests and provide memorable experiences; however, this has become increasingly difficult with the constantly evolving guest preferences. Consequently, loyalty programs are being revamped and made more attractive to consumers, even if they are costlier to maintain now for the brands than in the past. Hotel companies justify this as a worthwhile investment arguing that retaining a loyal customer is five times less expensive than attracting a new one.

In the Indian hospitality sector, where every brand is marketing the unique experience it offers and its ability to address the exploding micro-expectations of the customer, the loyalty card holds great value. Previously, word of mouth marketing was mostly limited to one-on-one interactions; this has drastically changed in recent times. Digitalization and the mass use of social media have enabled consumers to share their experiences with a much larger audience at anytime, anywhere. Thus, the industry is now trying to create loyalty programs which fall into the “ecosystem brand category”, where the brand’s distinctive characteristics are impressed upon the customer across several different touchpoints. Having said that, there’s more to be done as customers have now realised that loyalty programs across brands are similar without many meaningful distinctions.

Going forward, brands would have to focus on the below rules of engagement to increase their loyalty base and stay relevant in the minds of customers:

Rules of Engagement

Data: The better we understand the needs of our guests, the better we can serve them. Data mining & management is one of the biggest challenges that hotel chains face. The first step is to obtain the data from customers without being intrusive and keeping in mind that no guest likes to give information twice, especially the loyal ones. The next step is to leverage the customer data and create a personalised experience for the guest right from booking up until checkout, and perhaps beyond. This can be achieved via staff training, use of a robust customer management software, and an organisational culture that focuses on creating loyal customers. The merger of Marriott International and Starwood provided a database across geographies and demographics, which would enable them to make more customer driven decisions.

Social Media: Social Media has tremendous influence on consumer behaviour. Many guests determine their travel plans based on the social media scores of hotels, airlines and restaurants, among others. Therefore, social media sharing and posting should be integrated into the loyalty programs, encouraging brand promotion across all platforms such as Facebook, Instagram, Snapchat, Twitter and the likes. Indeed, social media now acts as a jury for a hotel which influences the purchasing decisions.

Mobile App: Mobile app is quite a game changer in the world of customer engagement. It provides ease of access for the guest as well as the brand. The former can get instant updates about the latest member offers and exclusive benefits, while making redemption of reward points simpler than ever before. The brand, on the other hand, can send real-time notifications to customers, with a much higher probability of these being read in comparison to emailers and text messages that were sent earlier. Presently in the hospitality sector, the only brand in my view that is truly exploiting the potential of mobile apps is Hilton, with the Hilton Honors App. The app allows you to Check in, choose and unlock the hotel room and check out. The customer can also choose what they want to order when they arrive. They have tried to eliminate the customer service gap because as we all know, time is money.

Instant Gratification: Customers are now looking for instant gratification. They want to be immediately incentivised or rewarded for their loyalty to the brand. Recognising this need, few hotel chains have started giving incentives as soon as the customer downloads the loyalty program app or joins the membership program. Ultimately, it’s all about the perceived value of unexpected rewards; they don’t cost much to the brand but can go a long way in gaining a loyal customer. Wyndham may have the most rewarding loyalty program according to a study published by Ideaworks. The customer gets a return of 16.7% on every dollar spent on a room booking. (Sorensen, 2017)

In closing, the above rules of engagement focus on providing satisfying customer experiences via effective data management, use of technology and digitalization, and offering incentives to attract and retain loyal customers. One must remember that today, advertising and marketing are just as important as offering a good product and/or service. So, to capture the present and next generation of loyal customers, companies need to work harder on all fronts.

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