The Power of Loyalty

It has been a busy few months for me this summer and I find it crazy that 2015 is flying by at a breakneck speed.  We had one of our long term Front Desk agents leave to move back across the pond to the UK, so her position of Loyalty Champion opened up.  I had expressed an interest in having a role with the Loyalty Program at the hotel and subsequently in April this year the position was offered to me.

I think it is essential to firstly define what Loyalty is and more importantly why it is so critical to the Hotel industry.  To be loyal is to be faithful to another person, cause or organization for a variety of reasons. You can be loyal to a particular supermarket chain because perhaps they offer some of the lowest prices and most consistent price matching plans. Perhaps you are loyal to a loved one or a friend because you have developed a connection with that person that is bound in concrete.  Within a hotel perhaps you are loyal to a hotel brand for the consistency in low rates it provides. However things can get more detailed than that. Perhaps you are loyal to a hotel property because Joe at the Front Desk always brightens your day with his efficiency and courteous service.

Here are a few interesting statistics on consumer loyalty:

·         28% of consumers are loyal to their providers and brands (Accenture)

·         Top 3 customer frustrations: failure to quickly resolve an issue, lengthy hold times, and interacting with representatives who cannot provide a solution (Accenture)

·          “Fully engaged” customers (those with a strong attachment to the brand, or brand ambassadors) deliver a 23% premium over the average customer in share of wallet, profitability and revenue (Cap Gemini) 

·         “Actively disengaged” customers (those who have negative feelings towards the brand, or spread negative word-of-mouth) represent a 13% discount in share of wallet, profitability and revenue (Cap Gemini)

It’s quite clear to see the importance of loyalty from some of the above statistics. To be loyal to a brand you have to trust that they are delivering on the key factors that make your stay special to you. If a brand is consistent in the delivery of these factors or services, then chances are high they will return. So you could say that the great product that drives 77% of loyalty for millennials and the brand recognition and trust which drives 69% of loyalty actually go hand in hand (NewsCred). One cannot exist without the other.

In my role as Loyalty Champion for IHG Rewards Club, I have two focuses. One is to drive member enrollment at our property. Why is enrollment important? Well primarily due to the fact guest loyalty can be easily swayed. Interestingly the potential revenue up for grabs due to changes in consumer spending and switching among brands and providers is $1.6 trillion, a 29% increase from 2010 (Accenture).  There is intense competition between the various hotel loyalty programs to sway these guests between brands.  For this reason it is essential to keep those member enrollments consistently high to account for the lost members over the course of the year.

My second focus is in regards to member recognition. Member retention begins with proper recognition. The IHG Rewards Program has taken strong steps over the past couple of years to switch the focus from a traditional reward based loyalty program to a “relationship” based program. More on that later… Relationships don’t work if you can’t get the greeting right. When that rewards member walks in the door and approaches the desk it makes a huge difference when you look them in the eye and not only thank them for their stay but you also recognize them as a member and subsequently a part of the IHG global family.  

Member recognition is essential because it is terrific indicator of how well a hotel property is doing with its member engagement. Guests have an opportunity when they receive their satisfaction surveys following their stay to not only identify if they were recognized as members but for the higher membership levels we even ask if there membership levels were correctly identified. These numbers are tracked and goals are set and taken very seriously due to the direct impact our members have on our properties. 

Above I mentioned the old school traditional rewards program where you get points for each dollar spent at a hotel. I also mentioned that IHG Rewards is pushing towards a “relationship” based rewards program. Now this doesn’t mean that they are no longer offering points to our guests. This is still a major component of the program and probably THE key benefit of membership. By focusing on relationship building, IHG is taking concerted steps to ensure they are rewarding guests and members who are truly loyal to the brand.  This includes ensuring that emails and communications sent to members are personalized and customized to fit member preferences. The more preferences we can capture, the more personalized the interaction and therefore the better the stay.

In the few months now that I’ve been in this role, I have to say it is right up my alley. There is a strong focus on guest satisfaction and more so with our members and return guests. I feel I have an important role to play to ensure that not only are we continuing to build enrollments and keep our recognition scores high, but as we go into an extremely busy renovation period over the next few months, keeping our regulars coming back and keeping them happy will be the challenge.