Creating Guest Loyalty
By Erich Steinbock Managing Director, The Carlyle, A Rosewood Hotel | October 23, 2011
There are two ways to create guests loyalties: Buying or earning. Where would you prefer to allocate your resources?
Buying can be the easiest solution to create guest loyalty as chances are it will show immediate results, but it also tends to be costliest. Whereas earning a guest's loyalty is harder to obtain, but the rewards are felt longer creating a more fulfilling relationship between service providers and its customers.
Complimentary upgrades, value add-ons and frequent traveler programs have saturated today's tourism market place. They have become the signs of the industry's commoditizing. They encourage repeat business and increase short term earnings, but they do not necessarily result in loyalties to the providers themselves. These types of programs create customer allegiances to the various programs versus the service providers.
The airline industry has cleverly found ways to add more benefits to its loyalty programs by adding surcharges to previously complimentary features for the everyday traveler but creating them as a benefit to its loyal passengers. This practice not only helps the various carriers increase their profitability as they fight for financial survival but also create a benefit to customers in frequent flyer miles programs.
But how would this type of program work for hotels? Should they offer a special menu of services and amenities to its frequent guests only? Should they begin charging the everyday guest for shampoo or television access? It seems unimaginable, but then again who would have thought airline carriers would charge for snacks on a five-hour flight.
In many cases, buying loyalty is like a broken faucet, it can easily be turned on to increase flow of traffic and revenues but it is harder to turn off. The danger with buying loyalty is that they tempt service organizations to lose their focus on creating emotional connections with their customers, which could be of greater, longer term value for both parties involved.
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