Mr. Johnson

Sales & Marketing

Addressing Guest Loyalty From a Strategic Business Perspective

By Mark Johnson, President, Loyalty 360 - The Loyalty Marketer’s Association

Comprehensive, well designed and successful loyalty initiatives are intended to drive interactivity that has been pre-determined to drive value for the hotel. The problem is that while most hotels have loyalty programs, they are not living up to their potential. The Loyalty Traveler Blog reports that on average, only 20 to 40% of program members regularly accrue points toward award redemption. This means hotels are missing the opportunity to encourage at least 60% of their customers to become repeat and loyal customers. And, given the profitability of repeat, loyal customers, this means that hotels are leaving a lot of money on the table.

Building an effective guest loyalty strategy is a three-step process:

1. Determine your objectives. Know the business outcome you want to create.
2. Understand how those objectives are in accord with your current and potential customers/guests.
3. Translate this understanding into a customer-focused strategy that is driven by the initial program design and but continually updated via voice of the customer feedback from your constituents and potential customers.

Following these three key steps requires that hotels move customer loyalty to the center of a business strategy - and not just a tangential strategy. This mindshift is critical to effectively drive a successful customer loyalty strategy and gain a deeper, more thorough understanding of the customer relationship. Yes, hotels must build competencies in defining, planning, executing and monitoring a customer loyalty strategy. But, doing so arms them with new customer loyalty insights which can then be used to refine/define their value propositions, determine how to allocate resources, increase the efficacy of their marketing spend and to enhance customer experiences.

Finding the link between your hotel’s business objectives and your customers’ priorities is where many loyalty, CEM, CRM and engagement marketing initiatives break down. Here are a few best-practice examples that illustrate the value derived of integrating business goals and customer-focused loyalty strategies:

International Hotel Group’s “Win It In a Minute”

Realizing that up to 40% of US frequent travelers play online games (as reported by Forrester Research) and that members of its Priority Club appreciate new and unique ways to engage with the program and earn more points, IHG launched “Win It In a Minute” and online game in which loyalty club members can score thousands of loyalty points for simply answering travel trivia questions. Each round of "Win It in a Minute" takes less than one minute to play - players have a maximum of 12 seconds to answer each of their five daily questions.

As Del Ross, vice president of U.S. sales and marketing for IHG tells Promo Magazine, “There are steps to becoming a loyal customer. Actively joining a loyalty program is actually pretty far down the pipe. You generally go on several dates before you get married. So if we can come up with some pretty interesting ‘dates’ along the way, we’ve increased the likelihood of a long-term marriage.”

Priority Club Rewards is the longest-established loyalty program in the hotel industry yet continues to break new ground in understanding and responding to consumers' changing needs and interests. As IHG’s press release announcing the game points out, today's frequent travelers are increasingly diverse in terms of both socioeconomic and geographic demographics, and Priority Club Rewards believes it is essential to explore innovative technological platforms such as gaming to more effectively reach young, new members and establish new ways to engage with its most valued and loyal guests.

MGM Resorts M Life Card

MGM Resorts International recently launched the first stage of its new loyalty program M Life in which members accumulate points that can be used for amenities, experiences, and rewards at any of MGM Resorts’ 15 properties in Las Vegas, Mississippi, and Detroit. The first phase of M Life establishes it basically as a casino rewards program. Later this year it will expand to also recognize guest spend on hotel stays, shopping, dining, and more.

This unique program offers personalized rewards by recognizing where members gamble, eat, and sleep, plus what concerts, shows, and spas they enjoy. For example, if a member attends a Madonna concert, they may receive an offer to Lady Gaga. A fine-dining connoisseur may receive an offer to a private wine dinner. Members who play the slots may receive credits, whereas those who prefer table games are likely to receive promotional chips.

Another hallmark of the new program is a set of insider privilege rewards members can earn unique M Life Moments including selecting The Fountains Bellagio songs for a day, enjoying a cameo role in Cirque du Soleil’s Viva ELVIS at Aria Resort & Casino, serving as a guest DJ at one of Vegas’ hottest clubs at MGM Grand, becoming a dolphin trainer for a day at The Mirage, cooking lessons with Bravo’s Top Chef Masters celebrity chef Rick Moonen at Mandalay Bay, etc.

The program also features a service that MGM Resorts is calling Express Comps, which it says enables guests to comp themselves with their points at restaurants and entertainment venues.

"M Life represents a major shift for MGM Resorts in the way we are engaging our guests," says Jim Murren, Chairman and CEO of MGM Resorts in a press release. "We've listened to our customers and designed M life to deliver on their preferences, leveraging a caliber of assets no other resort group can offer." He goes on to tell Bloomberg News that the program would add "tens of millions of dollars to our profit. It's an untapped opportunity.”

Omni Hotel & Resorts Aims to Drive B2B

Omni Hotels & Resorts is executing a new social media strategy aimed at engaging meeting and event planners to drive group sales and events across the luxury hotel brand. “Social media is often neglected by hotels and resorts for meetings and events,” said Tom Santora, chief marketing officer and senior vice president, sales at Omni Hotels & Resorts, in a press release. “Omni has been successful in building a strong social following in the leisure travel market, and we saw an opportunity to expand our efforts to create dedicated social media presences for meeting and event planners.”

While Omni already has a loyal fan base of meeting planners, they saw an opportunity to reach out directly to meeting and event planners with valuable, relevant content in order to build and strengthen the hotels group’s relationships with them.

The understanding that loyalty is the most important facet of your hotel’s marketing strategies and a realizing that loyalty is a dynamic and ever-changing process is crucial to success of such programs. As these best-practice examples illustrate, being able to understand value from all stakeholders and understanding the value that is derived from the program itself, the experiences on site, online, and after the experience all impact the efficacy of your loyalty initiatives. These links are the foundation of what will drive the growth and success of your loyalty initiative. Loyalty is no longer just about points --- but rather about the multitude of new technologies, touch points and interactions that a brand has with their potentially diverse and empowered audience.

Mark Johnson is President and CEO of Loyalty 360 - The Loyalty Marketer’s Association. Loyalty 360 is the only organization that addresses the full spectrum of both customer and employee loyalty issues. An unbiased, market driven clearinghouse and think-tank for loyalty and engagement opportunities, insights, and responses, Loyalty 360 is the source business leaders trust for industry metrics, market driven research, case studies, and networking opportunities. A sought-after speaker and writer, Mr. Johnson is frequently called upon by media worldwide to share his expert insights into customer and employee loyalty issues. Mr. Johnson can be contacted at 513-290-5147 or markjohnson@loyalty360.org Extended Bio...

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