I have a real problem with how some marketers use the term loyalty. At least I hope it’s marketers because my bigger issue is actually with industries who don’t put marketers in charge of loyalty and retention. Loyalty is a marketing strategy and should be driven by marketing professionals.
I talk a lot about loyalty in our business because some hotels and venues struggle to create robust and relevant retention strategies. Investing in acquisition is still vital but if it means we neglect our existing customers then our marketing is flawed. I very rarely see retention on the marketing budget yet it’s the most cost effective marketing strategy with a strong ROI.
Digital marketing has created a temptation for hotels and venues to scatter their promotions across multiple platforms and channels with little left in the budget to focus on retention but some already show how successful this can be if you pay a little more attention to those who have a relationship with you and want to share the success of their holiday or event at your venue or hotel.
During the pandemic it became clear to me that the one guest or client you can rely on now is a loyal guest or client. Because loyalty is about trust and relationships. Guests, clients, customers – they all want to trust you and your service because their safety and welfare is now part of their decision making process. So loyalty becomes a primary driver for marketing again (as it should always have been).
Many hotels and venues seem to have understood this and worked really hard at communicating with their database of guests and clients and this really propelled retention into the forefront of marketing decisions which is good news. Now what we need to do is to shape and mould our loyalty and retention strategies to ensure that we continue the great work. I therefore want to raise one strong word of caution. Loyalty is not the same as frequency.
Many programmes, clubs and initiatives are about increasing frequency of bookings and repeat spend. This is great, we all benefit from this, lots of repeat business and lots of rewards and incentives for the guest. Whether it’s a free coffee or an exclusive promotion, we all want to feel we gain from being loyal. But is frequency the same as loyalty? It’s part of it but loyalty is so much more. So when driving your retention programmes and building communications to keep your guests and clients coming back, think about what matters most. Frequency or loyalty. They can still be a frequent user of your services but are they booking via multiple channels rather than direct and costing you more money? If so, they aren’t necessarily loyal to you, it’s more about convenience and price. Do they choose you over any other competitor regardless of price and promotion? If yes, then they are loyal. Do they share their experience and encourage others to use you – yes? Well that’s loyalty too. Just because someone visits once a year, that doesn’t make them any less loyal to you so don’t cut them out of your database or downgrade their status. If they are loyal to you in other ways, recognise that and capitalise on it.
The current state of the travel industry and events industry means there are going to be less holidays and less events, but if they pick you over everyone else, you should recognise that. Also remember that if they are nervous and lacking confidence about their trip and they have an exceptional time at your hotel or venue, then they’ll come back. They’ll trust you to look after them well and will feel secure. That’s going to count for a lot as they’ll be hesitant to travel to other hotels and will feel more confident in returning to your business. So automatically we are going to see a very different audience evolve over the next year – one that is more loyal and more invested in a relationship with you.
What you need to do now is make sure you are ready to prioritise retention and loyalty and have everything in place. From your channels of distribution and pricing to your promotions and personalisation. This is a time to invest in loyalty and reward, not a time for mass marketing and costly incentives.
Here are a few top tips on retention marketing:
- Audit your data. Are you collecting the right data to help plan and predict booking patterns and behaviour.
- Segment your data. Be relevant, timely and realistic in your communication.
- Analyse booking channels and distribution – has your audience evolved or shifted and has their behaviour changed?
- Analyse spend – not just room rates, but drill down into the data and find the lucrative customer who you want to invest in
- Create clever, personalised marketing messages that are measurable.
- Be compliant! In every sense.
- Reward not incentive. Thank people and then encourage them to return, don’t just incentivise
- Keep cleaning. Data gets dirty, so clean it regularly
- Create a brand/club to collect more data and provide more unique opportunities but don’t penalise people for frequency.
To find out how Custard can support with your customer retention strategy, contact a member of our team.
