Ms. Stark

Guest Service / Customer Experience Mgmt

Be Worthy of Loyalty

By Naomi Stark, President, Stark Service Solutions, LLC

How would you answer: Are loyalty programs about rewards or recognition?

Is there even a difference? YES! There is a significant difference. The birth of the loyalty program was a significant milestone in the history of the industry and one that originally rewarded and recognized guests for their loyalty. Yet, over the past decade we’ve seen a shift towards a separation in rewards and recognition. This separation has had a significant role in programs not living up to their full potential. Research has shown on average, less than 40% of program members regularly accrue points toward award redemption. That means missed opportunities for hotels to capture an even larger market share of repeat and loyal guests. Another dynamic which plays into the success of loyalty programs is the rapidly evolving world of technology which necessitates loyalty programs to also rapidly evolve to keep pace.

Rewards vs. Recognition

I recently spoke with Jacob Wright, Director of Guest Services at the Wyndham Phoenix Hotel. Jacob ponders the future of loyalty programs, “I wonder if customer loyalty is a thing of the past. At least, as we know it today.” Now how can that be? Everyone wants to be rewarded for spending their money and recognized for their loyalty – that never changes. Well, it is an intriguing notion. Change in our culture has led travelers to want more than points and a welcome fruit plate which at one time was considered the tops. Jacob continues, “Today’s travelers demand hotels to be worthy of loyalty. They want to know who we are. They want to connect with us on an emotional level. Really, that’s what we are in now, the emotional delivery business.”

Can it be that social media has altered the motivating force behind how guests decide which hotel and brand they will grant their loyalty? Thereby actually altering the course of loyalty programs? It certainly appears that way. So just what do loyalty programs have to do today to achieve guest loyalty tomorrow?

One answer is revealed from Jacob’s comment that many guests are becoming more concept loyal than brand loyal. No doubt one of the hottest concepts today is fitness and wellness. Yoga has recently been described as being “as important as Wi-Fi and on-demand movies” and a “must-have amenity”. Hotels are discovering that technology can be the missing link that brings together brand loyalty perks with the wellness concept. A new App on the market is by Yo-Fi Wellness. Jeff Croy, President of Yo-Fi Wellness, tells us about it: “We’ve combined world-class production with world-class talent in the areas of yoga, fitness, nutrition, and meditation with current technology to create the most engaging media product of its type. It’s been specifically tailored to be the on-demand, on-the-go solution for travelers and hotels. Hotels are particularly showing interest in leveraging the App as a value-add for brand loyalty members as it ties guests to the brand even beyond checkout.” Today’s brand loyalty programs must be social and app centric. Yet, when it comes to sustaining a brand loyalty program there is one element that will always remain “on-demand”.

Knock Knock. Who’s there?

At HITEC this past June, Randi Zuckerberg, former Facebook Director of Marketing, told her captivated audience that, “Travel is the most social purchase we make.” This means consumer loyalty is determined by almost everyone except for the rewards card that is sitting in our wallet. Allow me to illustrate. While I have a rewards card for every major grocery store in my neighborhood, the card itself does not determine where I do my weekly shopping. Rather, I simply use the card where ever I determine to shop. If guests have a similar approach in how they use hotel loyalty programs the objective of these is lost.

This is further emphasized by Francis Prezeau, President of Signature Canada, part of the international marketing and training company Signature Worldwide, which specializing in developing long-term customer relationships: “I feel they [hotels] can maximize their business more than they think. I am not sure all the companies are at par when it comes to matching service delivery to loyalty programs. Not long ago, a report estimated that only 7% of “loyal” guests say they get special treatment from their loyalty programs. Only 8% of the customers described their experience as “superior”. Yet, 80% of the companies surveyed believe that the experience they have been providing is indeed “superior”. Or consider this: 85% of CEOs say customer experience is VITAL to competitiveness! However, only 11% have a disciplined approach to CEM (Customer Experience Management)! Service is your guarantee. Your best loyalty program is to provide personalized service.”

Clearly when a program is just about rewards, loyalty isn’t achieved. Loyalty is defined as “faithful” and faithful is defined in part as “allegiance” and “trust”; neither of these can “points” alone achieve. After all, aren’t points what programs share in common? Loyalty results from one’s ability to gain trust. Loyal guests are actually saying, “I trust that you will recognize me as the individual that I am.”

What does this tell us? When considering your marketing budget and any investment to bring business in the door, be sure to include in your strategy adequate ongoing staff training. I know, I know, your training budget has been cut. Nevertheless, there are ways to remain loyal to training in every budget. Managers with effective pre-shift meeting skills can accomplish more than periodic training classes can (without adding to your staff or payroll). In addition, the astronomical benefits this has on guest loyalty are immediate. While implementing Stark’s Formula 10™ coaching development program at a downtown Chicago hotel, I witnessed firsthand their loyal customer revenue value skyrocket by some $1.8 million dollars, in just six months.

Developing a loyalty program will indeed bring guests to your door. However, if from a lack of recognition your guests feel like they’re on the wrong end of a ‘knock knock’ joke, their loyalty is up for grabs.

Who Gets It

Leondakis An outstanding example of a company who really “gets it”, one who has earned top customer satisfaction, emotions, and likely to return scores in every quarterly Market Metrix Hospitality Index, is Kimpton. So who better to weigh in on the subject than Niki Leondakis, President and Chief Operating Officer of Kimpton Hotels & Restaurants. Let’s hear what she has to say:

Niki, from your perspective, what gets guests truly engaged, genuinely loyal, and active in accruing and redeeming points?

“When Bill Kimpton founded the company in 1981, he appealed to the traveler who wanted a more personalized experience - an experience where the staff remembers your name and your favorite glass of wine. We know that personal acknowledgement and recognition of our guests’ preferences has been a key differentiator that keeps our guests coming back. That is the foundation of our loyalty program, Kimpton InTouch.

We are passionate about providing guests with the things that help them feel cared for and comfortable on the road – such as ensuring their favorite snacks or pillow preference are in their room upon check-in. While InTouch perks such as complimentary high-speed WiFi, are appreciated by guests, it’s really the level of comfort and recognition we provide combined with that feel-good atmosphere that makes guests feel taken care of when they stay with us.”

Tell us Niki, what makes a loyalty program successful at establishing a competitive advantage and generating a measurable return on investment over the long term?

“Creating and maintaining a successful loyalty program, or any service that directly impacts the guest experience, requires constant listening to our guests. We maintain our pioneering spirit by being good listeners, in fact, we’re intense listeners. Before rolling out rewards, we solicit suggestions from employees at our hotels and restaurants who receive feedback from guests firsthand. Ultimately, Kimpton’s loyalty perks are inspired by guests.

Non-traditional rewards and offers that are both personal and unconventional are commonplace at our hotels, and embody what we stand for as a company as well. For example, we are rewarding a loyalty program member who visited his 53rd Kimpton hotel, (accomplishing his goal to visit every hotel in our collection) with a guided trip to Mexico with our Master Mixologist to become intimate with how tequila is made.”

Ok, I’m convinced! So tell us more about the unique characteristics of Kimpton’s InTouch and how it’s been successful in achieving brand loyalty.

“At Kimpton, we genuinely take the time to get to know what travelers want on the road as well as their personal likes and dislikes, to create stays that are both familiar and fun. Kimpton InTouch rewards loyal guests with customized incentives inspired by each traveler’s preferences. From greeting guests with a copy of their favorite magazine to ensuring a tired traveler has a special pillow at bed time, members can personalize their room preferences by requesting almost anything.

Over the years we’ve made significant additions to the program based on the changing travel climate and guest needs. Loyal guests enjoy unique perks, exclusive sales and promotions, and can earn complimentary nights [one for every seven eligible visits or 20 eligible nights]. Travelers that rack up 15 Kimpton stays or 45 nights earn Inner Circle status, yielding the ultimate VIP treatment.

As Kimpton hotels and restaurants open in new markets, we launched the “Passport Rewards” program that encourages loyal guests to explore new properties by providing free nights when they accumulate stays at different hotels.”

Niki, you’ve talked about listening to your guests, so let me ask you this… thinking ahead, as technology and social media continue to play an active role in travel decisions, how should hotels use these to their advantage?

“Social mediums such as Twitter, Facebook and Foursquare are critical to our guest listening strategy. The explosion of social media platforms will offer even more opportunities to reach our customers and gain insight into their needs and preferences. Our social media efforts, both on Facebook and on Twitter, and whether it’s the Kimpton brand accounts or one of the individual hotels, restaurants or chefs, have been created with the same overarching goal – to foster genuine relationships with travelers and gain greater understanding of their wants and needs.

Many of our followers are loyal guests and diners. In the same way that our hotels and restaurants appeal to certain target markets, we have found that our social media updates attract animal lovers, explorers, foodies, LGBT travelers, wine lovers and women. In addition to growing our fan and follower bases, we measure success by our ability to forge even deeper relationships with our guests and ultimately inspire brand loyalty through these channels.”

Rewards & Recognition – separate yet equally important to the successful loyalty program

Yes, reward programs are essential to a hotel’s basic marketing plan – independent or branded – as all guests want to be rewarded for spending their money. However, it is absolutely, undeniably, unequivocally the personal recognition component that gives loyalty programs their legs. Recognition is the “sustainability factor”. Both need to be understood and delivered by every ambassador of your brand and are utterly essential to the success of a loyalty program. “At a time when travelers have access to a bevy of rewards, deals, promotions and value-adds, hotels that can create unforgettable experiences will stand out among the competition.” - Niki Leondakis

Best Practices when developing a successful loyalty program

Lynch Tynette Lynch, Owner, Hospitality Business Solutions:

• Upgrades and priority booking are as important as redeemable points for complimentary rooms, food and beverage, and vacation stays.
• Corporate group meeting planners booked hotels and venues that gave them accumulative points as well.
• Feedback that we found when doing our research was that people wanted programs that they ACTUALLY got to redeem their points without close-out dates and many restrictions.
• The number one best practice for loyalty programs should be the ease of redemption.

“In our independent hotels we created our own “loyalty” program after losing corporate business to branded hotels with national loyalty programs. We did research and found that the corporate market segment chose hotels based on loyalty points and actually used their points the majority of the time to take leisure trips with families and to receive upgrades when travelling. Since we as an independent hotel, could not offer complimentary stays at other hotels, we used our redemptions for gift cards, either local restaurants or spas or at our hotel, or cash cards such as American Express and Visa. We put a monetary value to each point earned.”

Wiersma Timothy Wiersma, President and CEO at Revenue Generation LLC:

• Very few blackout dates. This is a huge plus for customers and they have come to expect to redeem their rewards whenever they choose.
• There are many opportunities for hotels to entice existing members to stay at their hotel. The marketing opportunities are endless. If a hotel has a softer time period they have an entire tool kit of rewards program offers that they can work with.

“I think the next evolution of loyalty programs is allowing flexibility on how to use hotel amenities. Example: If I am staying at a hotel and they have a spa - it might be nice if I could purchase a message using points, the same as with meals in restaurants. Why not…points are worth money in the hotel world.”

Stark Service Solutions, LLC was founded in 2001, by Naomi Stark, current Chair of the AH&LA Technology & E-Business Committee, an expert in guest satisfaction and loyalty and employee development. Stark Service Solutions, LLC is known for developing smart training and software platforms such as the Touch System. The Touch System is the only software tool of its kind, bridging HR, Training and Operations to sustain a culture of highly personalized guest experiences. This program brings a unique approach to customer satisfaction management, which consistently assists clients in all sectors of the industry. Ms. Stark can be contacted at 480.614.1009 or nstark@starkservicesolutions.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.