Customer Loyalty: Why You Should Build Customer Loyalty

Phil Benson investigates the importance of customer loyalty in today’s competitive marketplace.

With the hotel industry in recovery, building customer loyalty has never been so important. With money still tight, building customer loyalty is the only proven way to compete with rivals without having to forfeit revenue.

Loyalty to a hotel or brand results in guests willing to put up with a less-attractive location or a higher price, but still wanting the particular guest experience encountered before.

Gathering constant customer feedback to make sure the needs of the customer are being met will ensure loyalty remains strong. Loyalty programmes can be developed from this feedback, which is important, but there does seem to be a trend to suggest that these programmes are now failing to deliver.

Last year, Michael McCall, a research fellow from the Cornell Centre for Hospitality Research said, “virtually all hospitality firms have some form of customer loyalty programme, but so far there is not much evidence that these programmes actually create customer loyalty. One key point is to be careful with price-oriented rewards, which can turn the potentially loyal frequent customer into a discount-focused customer.”

The key is to reward customers with something that they want and will value. Make the most of the data gathered from guests as not all of them will attach the same value levels to services, experiences and offers as some do. Loyalty programmes have to be flexible, offering choice of the right deals to the right customers in order to maximise the greatest value.

Rigid loyalty programmes have got to be a thing of the past and should instead be tailored towards allowing guests to choose from a broad range of reward options, gearing it to individual guest preferences, permitting flexible redemption intervals and maintaining a unique selling point the differs from that of the competition.

“Loyalty can only be improved if it is set as a priority by the most senior people in the business and then actively promoted, measured and managed,” explained iBuzcon managing director, Glenn Jones in a recent interview with hotel-industry.co.uk. “Leaders must send out a clear message to staff and guests that they are committed to building customer loyalty. If a hotelier constantly works to measure, communicate and improve the customer experience, always including staff as much as possible through regular feedback session, then they have a great chance of driving loyalty and building their business.”

“I think a clear indication of loyalty is a customer’s readiness to become an advocate or stakeholder of a hotel by sharing their views and suggestions through constructive feedback. By giving customers opportunities to submit their views of the business, hoteliers can not only measure loyalty but also nurture it.”

So perhaps a move towards transforming loyal customers into advocates is the way to move forward to secure success. This should be the aim for all hoteliers – it is the most effective type of marketing and can drive unparalleled value into your business.

By Phil Benson

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