Toby Berger is the General Manager of Revinate APAC in Singapore. Previously, he held management roles with market-leading brands including Google and Expedia.
Loyalty programs have long been considered a necessary part of a hotel’s marketing and revenue strategy. However, a recent data report presented by Google identifies the customer experience as more important than loyalty programs when it comes to travel bookings for frequent travelers. When asked to list their top three considerations when choosing which brand to book travel with, customer service ranked number one (60%), followed by an easy-to-use website (55%) and online reviews (50%). Loyalty programs came in last (46%). Travelers are no longer looking at the perks of hotel loyalty programs and rather what kind of experience your product and brand can provide.
The modern-day traveler redefines loyalty
Booking hotels has never been easier, with more information available than a guest could ever want. The task for hotel marketers is to tailor their marketing strategies to feed customers’ needs and reimagine what loyalty means for hotels.
The term “loyalty” is usually associated with freebies, discounts, and points, which are easy ways to drive membership sign-ups. However, these members have probably also signed up for your competitors’ loyalty programs. They want the benefits from appearing loyal, but are they actually loyal?
Why customer service wins
Consider this scenario: a guest goes to dinner at a hotel’s restaurant after receiving a loyalty membership perk, a restaurant discount. Unfortunately, the food service is slow and the waiter is unapproachable. Even though the guest got a great discount, he will remember the poor service more than the dollars saved. The service you provide, at all stages of the customer journey, is more meaningful than all the loyalty points, discounts, and freebies you can offer.
Attitudinal vs. behavioral loyalty and the role of personalization
Google’s research into why loyalty programs are losing popularity resulted in the discovery of two types of loyalty. Attitudinal loyalty is how loyal a traveler feels, while behavioral loyalty is how loyal a traveler acts. Attitudinally loyal customers say they know which brand they will book, but that doesn’t mean they will end up booking with that brand. Behaviorally loyal customers actually repeatedly book with the same brand. After all, actions speak louder than words (or feelings, in this case).
The Google study found that only 30% of travelers express attitudinal loyalty to a hotel, and 44% exhibit behavioral loyalty. While attitudinal loyalty can feed behavioral loyalty, it is easy to mistake an act of convenience for an act of attitudinal loyalty. Just because a loyalty member has stayed with you multiple times this year doesn’t mean he won’t select another brand once a better offer appears.
Attitudinal loyalty boils down to how memorable your brand is. Is every step of your customer experience special enough for guests to want to return time and time again? Attitudinal loyalists are thinking about your brand, but getting them to take action depends on you.
How do you attract behavioral loyalists? According to the report, ‘behavioral loyalty is a matter of being present, with content tailored to your audience.’ Stop and think about the experience that you provide your guests. Is it personalized?
The easiest way to drive personalized experiences is to understand your guests. You can’t understand your guests without data. The healthiest guest databases are pulled from the PMS to enable not only personalized on-site experiences but also deep segmentation for personalized email communications.
Are guests receiving just the right content at the right time on the right platform? Are you segmenting your email lists and deploying relevant, custom communications to guests based on their stay preferences, spending habits, demographics, and more? If not, you might be losing behavioral loyalists to brands that better cater to them.
While nothing takes the place of a great on-premise experience, a guest’s experience with your brand doesn’t end when they leave the hotel. You can continue to drive loyalty even when they return home. To learn how Revinate can help you improve the guest experience through personalized communications at every stage of the journey, please reach out. We have lots of ideas and success stories to share.