Customer Experience Management: Best Practices for Brand Loyalty Programs
By Steve Earwaker Vice President, Medallia, Inc. | October 16, 2011
Brand loyalty can mean many things. Most hoteliers would agree that loyalty certainly means likelihood to return to a hotel, likelihood to return to the brand, and likelihood to recommend the hotel and brand. With the rise in popularity of social media, the last component-recommending the hotel and brand-has taken on even greater significance.
Similarly, a loyalty program can be many things. Today's hotel loyalty programs are highly evolved marketing campaigns and should contribute to brand loyalty as defined above. Some of the questions and concerns hoteliers have are:
- Is our loyalty programming delivering return on investment?
- Is our loyalty program a crutch? Are we better known for our outstanding loyalty program or for our outstanding hotel experience?
- Is our loyalty program still effective, or have we reached the point of diminishing returns?
These and other questions are crucial as you design your loyalty program to align with your brand objectives.
The Role of Loyalty Programs
For the consumer, and particularly the highly coveted frequent traveler, loyalty programs have become a value proposition rooted in the psyche. Ideally, they drive brand preference and therefore incremental hotel stays based on members' individual choices on any given trip. For the brand itself, these programs pose huge costs, so it's important to understand and maximize ROI. But increasingly, brand marketers, owners, and franchisees question whether the incremental returns loyalty programs generate are dwindling.
Since their introduction in the hotel industry, the use of loyalty programs has soared. Loyalty programs have worked so well that they have been adopted widely by other industries, initially in the travel sector and now in practically every transaction you make on a daily basis. Buy a cup of coffee and punch your loyalty card. Stop for gas and receive some coupons or points. Pay with a credit card and pick up some travel points. And on it goes.