I recently contributed to an article for The Caterer on loyalty so wanted to share a little more insight on this topic, especially from a communications perspective.
The discussion in the article highlighted the critical role of technology in fostering customer engagement and establishing effective reward systems. Both are great for driving data capture and relationship building, but hospitality businesses need to ensure they understand and question the ‘why?’
Asking the Why
Before investing in a programme, hotels and restaurants must ask some fundamental questions: ‘Do we truly understand our best customers, and what are our objectives in cultivating these relationships?’
While many pursue loyalty, what they often seek is frequency. Encouraging recurring bookings and spend while gradually building rapport to earn recognition and rewards becomes the aim.
Authentic loyalty works way beyond the transactional benefits; it entails advocacy, brand resonance, word-of-mouth promotion, and shared values. Failing to differentiate could lead to incentivising the wrong booker or diner, potentially resulting in diluted reviews and negative social feedback.
Drawing from personal experience, I’ve come to appreciate the power of advocacy. Despite not meeting the stringent criteria for top-tier rewards, my allegiance to British Airways remains unwavering. Loyalty isn’t solely about the frequency of transactions but about creating brand ambassadors who choose you and endorse your business above your competition.
So here are some questions to ask yourself.
- Are you going for market share?
- Do you want your guests to remain loyal to you for that mid-week bite to eat or weekend escape?
- Are you trying to encourage your already loyal customers to keep booking and push the needle to more incremental bookings?
- Are you genuinely keen to reward your customers?
- Are you trying to amplify your business messages through word of mouth?
- Are you trying to find out more about your customers?
For me, the last question is the most pivotal. Without comprehensive customer insights, devising an effective programme becomes challenging. Advocacy can only work if it’s hinged on personalisation and clever communication which must rely on robust data. Before you do anything, you need to understand your customer base and their preferences.
Build a strategy to support personalisation and you’ll not only create a route to frequency, but you’ll be able to adapt and learn from the results which in turn can craft and create new products and services that will lead to increased profitability.
Loyalty done right
Since The Caterer article appeared I feel my awareness around loyalty has been heightened. So, I have two great examples to share and inspire.
The first which is also mentioned in The Caterer, is Pizza Express. When you visit, you’ll see branding and marketing everywhere to encourage you to be part of the club – in return you get free dough balls on the spot. Easy enough. I give my data, my preferences, my location etc and I can a free dish.
Now layer that with some extra incentives to move up the food chain in their programme from bronze to silver, and you create a seed of desire to visit and spend more. Excellent. Works for me. They aren’t too intrusive, I have an app downloaded for ease, and I can also pay using the app, so they are doubling up on the intelligence on me and I know that next time I visit, I’m going to get something free! Hoorah. So, time will tell how personalised their comms are going to be.
Now second to this is what I feel something important for hoteliers to do and that’s look beyond our industry and understand what’s happening in the retail sector.
Here is where we look to the Rituals brand. Home scents, bathroom amenities and more, this clever brand has really captured my attention when it comes to increasing spend and I can honestly say I’ve been drawn in by their heady marketing.
The personalisation is outstanding, and the incentives are so pinpoint accurate and timely it’s like they are in the bathroom checking what the situation is with the shower foam. They have created a loyalty platform that is super easy to use and genuinely recognises spend. The messaging conveys value and relationship, and their incentives are more about recognition and reward. For me this brand is getting it right from technology to purchase behaviour. They’ve struck gold.
In conclusion, the industry can derive valuable lessons from both within and beyond its sector. Embracing technology, investing in personalisation, and gaining a stronger understanding of behaviour and response can help define a successful approach to loyalty and foster enduring relationships and profitable growth.
