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