5 Tips for Designing a Hotel Loyalty Program that Really Works

Loyalty

In a previous post about the benefits loyalty programs can bring to independent hotels, we highlighted a study by the Center for Hospitality Research at the Cornell School of Hotel Administration that showed independent hotels enjoyed an average 50 percent increase in annual revenue per enrolled guest, due to increased room-nights purchased. The research provides solid evidence that loyalty programs for independent hotels work.

But for any loyalty program to be successful, it has to be done right. In our current travel climate, where millennial travelers are leading a hospitality revolution, the stiff loyalty programs of big-brand hotels are losing their relevance. The complicated, elitist, rules-heavy programs of old may provide value for frequent corporate travelers, but not really for anyone else.

Software Advice, a company that evaluates hotel management systems, recently conducted a survey about millennial participation in hotel loyalty programs. The study highlights the potential for boosting loyalty program enrollment among this growing traveler segment, with 86 percent of millennials not yet participating in hotel loyalty programs. The report also debunked the common perception that millennial travelers are less loyal to brands, suggesting they are just more discerning — as are a lot of Gen Xers and Baby Boomers these days, due to wide accessibility of travel information online.

Indeed, the Software Advice report found the most common reason for millennials joining a hotel loyalty program is loyalty to a hotel brand (46 percent), followed by easy-to-earn rewards (41 percent), simple sign-up (37 percent) and a variety of reward options (19 percent). To attract loyalty members of the millennial kind, loyalty programs need to be simple, meaningful and flexible. In fact, such a program will not only appeal to millennials, but to everyone.

When it comes to designing loyalty programs, independent properties have an advantage over chain hotels; unrestricted by rigid standards, independents have more freedom to be creative and to personalize rewards. Ultimately, the perfect loyalty program should be established based on your particular property, who your guests are, and what they want.

Make it Easy to Earn Rewards

It can be difficult to see the value in a complicated reward program wrought with rules, where rewards take a long time coming — especially for infrequent travelers. To attract a wider range of members, loyalty programs should make it easy for travelers to earn and redeem points, with no black-out dates and points that never expire.

For frequent corporate guests who enjoy status recognition, a program offering tiered benefits provides them with the distinction they seek. And with points that never expire, the complicated (and awkward) situation of demoting members can be avoided.

Kimpton and Marriott hotels are making it easier than ever to earn points, now rewarding guests for sharing on social media. While some have their reservations about incentivizing social engagement, awarding points doesn’t have to be limited to nights; points could be awarded for attending hotel events like wine hour and for utilizing paid amenities like the restaurant or spa.

Deliver Instant Gratification

Businesses are more transparent and accessible than ever — and, therefore, more competitive — so rewards programs should deliver tangible value that loyal customers can enjoy sooner. In addition to a simple sign-up process, hotels are beginning to offer guests immediate perks simply for enrolling, like a free drink at the bar or a small welcome gift.

While free and discounted stays are the most popular rewards, it typically takes an infrequent traveler a long time to earn them. To maintain interest (and loyalty), properties should offer more frequent rewards that could include room upgrades or dining discounts, and throw in soft perks like late check-out, drink vouchers, a free movie rental, or in-room cookies with a personal note.

It’s all about perceived value; unexpected freebies don’t have to cost much but go a long way in winning loyal, life-long fans.

Make Loyalty Members Feel Extra Special

All guests should be made to feel appreciated, but repeat guests even more so because loyal customers are a business’ most valuable asset. How do you make guests feel appreciated? Through personalized service that demonstrates you really care.

It’s important to get to know your guests and what they like in the quest to personalize service. Thanks to detailed guest profiles in customer relationship management and property management systems, properties have the ability to store rich guest data that empowers them to provide highly personalized service that earns and maintains loyal guests.

Through face-to-face interactions, phone calls, social media engagement and guest reviews, hotels can garner valuable information about guest preferences — particularly of repeat guests who engage with hotels more often. Armed with this knowledge, properties should aim to delight loyal guests with tailored service that goes above and beyond. Imagine Ms. Smith always buys certain local chocolates from the gift shop… and her pleasant surprise to find the decadent treats waiting in her room upon arrival!

Provide Easy Access

According to the Software Advice research, most respondents (49 percent) prefer to be notified about point balances and rewards via email. This information could be combined with targeted return offers and other targeted marketing campaigns. As we’ve recommended before, all email communications should be mobile optimized.

Mobile hotel apps can also offer loyalty members the ability to check their point balance, see what rewards they are eligible for, and redeem points. A combined 58 percent of millennials that participated in the Software Advice research say they would find a mobile hotel loyalty app “very” or “moderately” valuable. Integrated with the hotel’s property management system, such an app could also greatly enhance guest profile data for loyalty program personalization.

Alternatively, many hotels offer an online dashboard that allows members to log in and view their account status.

The more transparent your loyalty program is, the easier it is for your guests to understand and engage with it.

Spread the Word

While loyalty programs are expected of large brand hotels, they are not yet as common among independent properties. Let customers know about your loyalty program on your website via a dedicated explainer page (that is linked to from the homepage and main menu), as well as through social media, in-room cards, mobile hotel app, and at the front desk.

Social media is especially valuable in building customer relationships, and through the likes of Facebook, Twitter and Instagram, your loyalty program members can become your biggest advocates.

With a flexible loyalty program that offers guests what they really want, independent properties can attract and retain repeat business from all types of travelers across all generations. WebRezPro property management system now offers integration with two sophisticated loyalty programs — Preferred Patron and Stash Hotel Rewards — simplifying guest rewards management for independent hotels.

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