Exploring Current Loyalty Programs From Industry Leaders

By Mark Johnson President, Loyalty 360 - The Loyalty Marketer's Association | July 10, 2011

While most hotels have loyalty programs, research is showing that many are not living up to their potential. Loyalty Lab reports that on average, only 20 to 40% of program members regularly accrue points toward award redemption. That means hotels are losing out on significant opportunities to encourage at least 60% of their customers to become repeat and loyal customers, and repeat customers can be the most profitable ones.

So what do customers look for today in a hotel loyalty program? Which rewards will be most popular in 2011? What should hotels do to make sure that their loyalty programs appeal to the widest segment of travelers?

According to a new survey from the Chief Marketing Officer (CMO) Council, customers are craving the notion that hotel operators understand them and their needs. More and more customers are expecting highly personalized content with offers that feel as if they were designed specifically for them. And this revelation means that the days of mass blasts with general offers are no longer acceptable.

Loylogic's 2010 Frequent Traveler Survey echoes these findings. The survey of over nearly 40,000 people representing more than 140 loyalty programs worldwide was undertaken to better understand frequent travelers' opinions towards their current loyalty programs and reward redemption. The research found that with almost 2 billion travel loyalty program memberships in the U.S. and more worldwide, the "one-size-fits- all" loyalty program will no longer suffice. Consumers have more options and more control than ever, and to keep customers (especially frequent travelers) engaged, excited and loyal, brands need to offer rewards they want. The next generation of reward programs should, according to the research, offer unique, desirable and, importantly, attainable reward options.

Programs should also offer more value and simpler reward redemption to remain attractive to today's consumer. Ease of redemption is key; guests can become more excited and loyal to a hotel or chain after their first redemption, facilitating their transition from dipping their toe in the loyalty program waters to profitable, consistent members who keep coming back.

Taking a look at what some industry leaders are doing to engage their customers will also give great insights into how to drive ongoing participation in your loyalty programs.

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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.