Let’s talk about loyalty. We write songs about it; we study it; we try to identify it in friends, potential suitors, colleagues, and customers – loyalty is an omnipresent force in our lives, whether it exists in abundance or, in some cases, is perceivably lacking. Specifically, loyalty has gleaned no shortage of attention over the last few years in the business world. Across industries, marketers and business owners find themselves ruminating over the same question – is loyalty dead? Are modern customers incapable of exhibiting loyalty to the brands they purchase from? If not, why does customer loyalty feel increasingly elusive, if not entirely absent from the marketplace?
In the hospitality industry, specifically, this conversion continues to rear its ugly head at every turn. Why? Because our industry is perched atop a somewhat shaky foundation of antiquated processes and technology and, nestled right in the center is the traditional hotel loyalty program. At one time, these programs might have been considered the beating heart of hospitality, wrapping around guests like a warm hug that kept them coming back time and time again. But today? The hug isn’t just lukewarm – it’s often rejected altogether. Travelers have noticeably cooled towards providing generic loyalty programs, especially those of the point-based variety, which offer impersonal or otherwise intangible incentives. The list of grievances is not only lengthy but well understood; guests are tired of complicated loyalty programs and grand promises that fail to deliver, especially when hospitality brands seem to dangle an increasingly small carrot of a reward just beyond reach at every turn.
The inconvenient truth our industry needs to come to grips with is this: loyalty isn’t dead… it’s just really boring, and the way we’ve been doing it is no longer working.
Loyalty Shouldn’t Be Lackluster
Think back to your childhood – do you remember a holiday during which gifts were exchanged, where you were given a gift that was completely out of the scope of what you wanted? Now, think about that sinking feeling as you opened that gift and forced a smile across your face before surveying the room to make sure no one had picked up on your internalized disappointment. This is a meaningful scenario to depict because almost all of us have received a gift or a gesture that we didn’t like at one point or another. Unfortunately, the hospitality industry has made a habit of this exact exchange – giving lackluster gifts to unsatisfied parties. Where is the fun in that?
To put it simply, traditional loyalty programs often aren’t designed in a way that can elicit delight and surprise in the modern world. It’s not to say they aren’t well-intentioned; they simply aren’t built to offer an ‘on the nose’ experience in a world that demands personalization and relevance. Structurally, point-based systems may offer up some enticing rewards at a high tier, but those rewards cannot make an impact if guests can never reach them (or if their points expire before they get there). With this in mind, I urge hotel brands to consider the following questions:
- Are your reward options diversified, personalized, and high-value?
- If utilizing a tiered loyalty system, is the rewards hierarchy accessible enough for most of your guests to benefit?
- Are the redemption rules attached to your program complicated, and do they change frequently?
- Do you offer your guests instant gratification?
- Do you clearly communicate your loyalty incentives to guests to maximize touch-points and prolong the delight of a purchase moment?
- Are you mistaking habit for loyalty?
- Do guests ever offer feedback that highlights or praises your loyalty offers?
Answering these questions should not only help you discern the quality of your current loyalty program but will also help guide you towards a new kind of loyalty.
Loyalty – Reimagined, and Reinvigorated
Every industry, and every industry segment, needs a make-over. Guest loyalty, in this instance, was long overdue and now ripe for transformation. We can bring a new kind of loyalty into view by loosening our grip on the point-based loyalty programs of the past. If hotels are promising guests an exceptional, meaningful, personalized experience, they need to deliver.
After all, failure to deliver on that brand promise erodes guest trust. According to Edelman’s Trust Barometer, people’s trust in those around them has imploded, reaching an all-time low. Their 2022 report indicated that trust in business sits at 54% – for hospitality brands looking to build loyalty with their guests, this is important to understand. Loyalty and trust go hand in hand – if you want a traveler to express loyalty towards your brand, you have to earn their trust. Establishing a rewards-based loyalty system that builds dynamic customer relationships and drives guest engagement is, in my opinion, the best place to start.
Today, more than ever, travelers seek cohesive and seamless experiences that indicate mutual investment. If a hospitality brand wants a traveler to invest in them, they must also invest in that traveler. Fortunately, personalization is a meaningful currency and offers hotels a great deal of ‘bang for their buck’ in the realm of guest loyalty. Relevance drives revenue, and loyalty is a dish best served personalized to the wants and needs of the guest sitting down to eat. With this in mind, Laasie’s rewards-based loyalty platform uses artificial intelligence and big data to present an attractive (and more importantly, relevant) selection of instantly-selectable rewards to guests at critical touchpoints during their journey. Whether rewarding a traveler for clicking ‘book now’ or simply participating in a survey, hotel brands can offer current and prospective guests moments of instant delight and surprise via our network of high-value reward partners (like Whole Foods, Sephora, Doordash, Nordstrom, Nike, GQ, and more).
Using this turnkey solution, whether on its own or paired with an existing loyalty system, hotels can send guests a clear (and increasingly necessary) message: We know you. More importantly, we care about your satisfaction long before you even step foot on our property. And if you still needed convincing, well, the numbers don’t lie. Using a loyalty model based on instant gratification can garner a 43% higher direct booking conversion rate and a 35X greater return on investment. More importantly, it provides guests with instant gratification and relevant rewards and recognition that they’ve always wanted, that traditional loyalty programs always failed to deliver.
So, is loyalty dead? It certainly doesn’t have to be. The way I see it, hospitality brands have two options: continue to rely on a broken system or breathe new life into a core aspect of business that benefits hotels and their guests equally. I don’t know about you, but I’m opting for the latter.