Hotels, Meet Your New Omnichannel Loyalty Program

Checked In For Success, How Hotels Plan to Engage Their 2013 Guests

By Bram Hechtkopf Vice President of Business Development & Marketing, Kobie Marketing | February 17, 2013

In July 2012, New York Times columnist Joe Sharkey wrote an article called "Frustrated With Your Hotel? No Need to be Loyal. " Sharkey reported that travelers would move upwards of $10 billion in spending to competitor hotels if they found themselves fed up with an existing loyalty program. It's a shocking number that highlights an underlying failure in customer relationship management (CRM) and customer experience management (CEM). Although many hospitality loyalty programs are doing the right things, there is an undeniable need to mitigate common pitfalls. This can be achieved by honing a programs' ability to drive, track, measure, and reward incremental behavior throughout the entire customer lifecycle. Or, simply put, through an omnichannel loyalty approach.

Improving Guest Experience and Engagement through Omnichannel Loyalty

Omnichannel loyalty is a fundamental shift from traditional loyalty marketing practices that embraces the proliferation of new, as well as more established communication channels. That means capitalizing on the blurring of marketing media, be they print, online, broadcast, mobile, point-of-sale, kiosk, digital out-of-home or direct mail, to ensure that every step of a loyalty program communicates seamlessly with another.

For hotel brands, omnichannel loyalty provides the opportunity to combat the "fall off" of loyal guests that Sharkey was referring to, as most hotel loyalty programs fail to drive or reward consumer engagement behavior beyond the purchase, regardless of the channels used. Although some traditional hotel loyalty programs do focus on driving incremental behaviors – like Starwood Hotels, which owns nine hotel brands including Westin, W, and Sheraton – most are still "me too" programs. Starwood, however, is moving beyond that paradigm. In 2012, it began an aggressive expansion of its loyalty program, Starwood Preferred Guest (SPG), after first testing it in pilot phase. Elite tier frequent travelers now enjoy 24-hour check-in and check-out and personal travel assistants known as "ambassadors." One frequent hotel guest, Karen Feeney, said of her Starwood ambassador: "I can't think of anything in my life she doesn't do." Talk about brand loyalty.

In a new omnichannel loyalty environment, brand ambassadors or advocates play a bigger role in driving the customer lifecycle. Starwood, for instance, utilized aggregated data which showed the top 2% of SPG members drove 30% of their business. Compelling cross-channel engagement and differentiated messaging empower guests, who can get what they want when they want it and in many cases are rewarded along the way for the "right" behavior.

Hotel brands can take some "omnichannel pointers" from Starwood as the brand puts its CRM and CEM to work, using what it knows about its guests to tailor a program that ensures that this elite (and profitable) group returns. By asking hotel guests how they want to be engaged, with what rewards through which channels they prefer, brands are able to better track, measure, and reward members to meet (and hopefully exceed) their expectations. The result, when carried out with precision, is a significant impact on customer lifetime value – a key financial metric in loyalty.

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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.