Using the Loyalty Program to Drive the Customer Experience
By Mark Johnson President, Loyalty 360 - The Loyalty Marketer's Association | October 2011
Does your loyalty program promote loyalty?
While your initial response may very well be "of course it does", I encourage you to give this question more thought.
If yours is like most hotels, chances are your loyalty program focuses on the accumulation and redemption of points. Accrue points in return for free or discounted rooms. But do reward programs such as these drive loyalty?
Many marketers mistakenly equate loyalty with rewards. Loyalty, however, denotes advocacy and commitment, not a points-based reward scheme. This belief is supported by the June 2010 Cornell Hospitality Report which contends that loyalty programs focusing on price-oriented rewards actually encourage more comparison shopping as customers seek out the most profitable loyalty program benefit. The points system, says the report, promotes loyalty to the best offer, not loyalty to the brand.
The most effective loyalty programs are an integrated part of an overall loyalty marketing strategy that is aimed at fostering a deep, emotional connection between the customer and the brand. This type of connection is not derived from points-based discounts or repeat purchases; it comes from continuous positive experiences with a brand. Effective programs are also considerate and developed in a manner conducive to adding value to multi-channel communications.
As Accenture research points out, a consistent branded customer experience plays a greater role in creating loyal customers than any other customer-facing activity - responsible for one-third of a business' ability to maintain customer loyalty. When Loyalty 360 asked our members what makes them loyal to a brand, a whopping 78% said that great customer service is what makes them loyal.