Loyalty Programs

You see them everywhere... the rental company, when you're making groceries (going to the grocery as us New Orleanians say), flying , and of course hotels. There are the gold members, diamond members, platinum premiers and the little guys. As we approach 2020, every company out there is doing everything to keep their customers and get them to spend more--- as they should. We all want to increase our revenues  and make our customers even happier. Sometimes I feel it's over the top and excessive but on the other hand I have spent the last few years understanding a lot of the rationale behind it all.

I think the stats are that these loyalty programs can generate somewhere around $90,000 over the lifetime of that customer. That's a lot no matter what business you're in. Retention rates, spending each year, word of mouth marketing and so on are all impacted by that one customer or 10 million if you're a really big hotel chain. All of this and your operational capacities go hand in hand in determining how strong your customer relationships are.

When I joined Waldorf Astoria two years ago, the Hilton Travel program offered me a great insight to the benefits behind these loyalty programs. I spend a dollar and I get 10 points. I stay one night and I get bonus points towards free nights. Free wifi, fitness access, resort fees waived are the basic perks of their program. As a team member, I am offered a fast track route in getting Gold status or even Diamond. I see what all those business travelers want: free breakfast, lounge access, more bonus points and so on. And then the interactive app just gets me even more hooked to want to spend more money so that I can have more status and get more perks. Then again, other people legitimately accrue the points for travel with family and friends at the expense of their work travel

Im not bashing these programs. I think theyre great. Perhaps a bit too much in everyday life but in my line of work, they carry substantial weight in the revenue generated in the business. So much of the typical guest is very loyal in their spending. Think about those in your customer base that spend the most money. Why do they do it? What brings them back? Is there a loyalty program? Is there service? Is it the reliability of the product? Is it all of the above? Is it loyalty status?

Until next time...