Customer Loyalty in the Hotel Industry: Challenges, Strategies and Digital Outlook
CHALLENGES, STRATEGIES AND
DIGITAL OUTLOOK IN THE HOTEL
STRATEGY & BRANDING CONSULTANT
Geneva School of Business Administration!
12 December 2013!
Customer loyalty is like
Everyone talks about it,
nobody really knows how
to do it, everyone thinks
everyone else is doing it, so
everyone claims they are
Adapted from David Laniado!
BRIEF HISTORY OF THE
Proﬁt & loss
HOTEL MANAGEMENT FIRM
Own the hotel asset!
Manage the asset!
Pay operating costs!
Budget and manage operating costs!
Pay refurbishment costs!
Recommend appropriate design and
equipment (brand guidelines)!
Receive the proﬁt and the loss!
Receive management fees, trademark
fees and distribution fees!
High variable cost!
High ﬁxed cost!
Stock / on demand production!
No stock (”perishable inventory”)
Production and usage locations are
different (factory + retail + outside use)!
Production and usage
locations are the same!
Few or no third parties distributors!
Many third party distributors!
Mainly leisure customers!
Mixed customer base!
“make the tangible intangible”!
“make the intangible tangible”!
MARKETING SPENDING SHIFTED
FROM PAPER TO SCREEN…
MARKETERS MUST DECIDE
WHERE BEST TO ALLOCATE
3 screens ready (responsive)!
Booking engine optimization!
Analytics + campaign tracker!
DIGITAL TOOLS MUST BE AT THE CENTER
OF A HOTEL MARKETING STRATEGY
of travellers book
their trip online.!
of travellers consult
of business travellers
from a mobile device.!
IN ESSENCE, MARKETING GETS
DOWN TO 3 SIMPLE STEPS…
… AND BUILDING LOYALTY
IS ABOUT 3 THINGS TOO
WHAT ARE THE TOOLS AVAILABLE
TO BUILD LOYALTY?
Gathering points to
be exchanged for
Gathering points to
reach status levels.!
TIER LEVELS (THRESHOLDS) ALLOW TO ISOLATE AND
REWARD THE MOST PROFITABLE CUSTOMERS
INTRODUCED A TIER
LEVEL PROGRAMME IN
FOOD FOR THOUGHTS!
HOW MANY LOYALTY CARDS DO YOU HAVE?
HOW MANY DO YOU USE?
DO THEY IMPACT YOUR BRAND LOYALTY?
ALL MAJOR HOTEL BRANDS HAVE BUILT GIANT
POINT BASED LOYALTY PROGRAMMES
BUT LOYALTY PROGRAMMES ARE
EXPENSIVE TO SET UP AND TO OPERATE
SO, WHAT OPTIONS DO INDEPENDENT
MANY AFFILIATIONS OFFER LOYALTY
SCHEMES TO INDEPENDENT HOTELS
FINANCIAL IMPLICATIONS OF LOYALTY PROGRAMMES!
THE MORE POINTS
ISSUED, THE MORE
LIABILITIES ON THE
THE AMOUNT OF AIRLINE MILES ISSUED IS
BIGGER THAN THE NUMBER OF EURO BILLS
DESPITE HUGE INVESTMENTS MADE, LOYALTY
PROGRAMMES ARE NOT FULLY DELIVERING
of hotel loyalty members
are “at risk” of switching
their preferred brand.!
of hotel loyalty members’
annual hotel spend is not
with their preferred brand.!
of managers consider
their CRM strategy
of companies believe their
loyalty programme lacks
SATISFACTION VS BEHAVIOUR
A TRUE LOYAL CUSTOMER BUYS A LOT, OFTEN AND IS HAPPY ABOUT IT
The feelings towards a service
(willingness to recommend)!
The actions toward a service (frequency
of purchase, average spent etc.)!
Hotel stay for a
THE CHALLENGE WITH
Moving from behavioural to
Frequency of purchase!
Recency of purchase!
Reduced price sensitivity!
High emotional switching costs!
The rise of digital marketing led to an
increase of customer touch points!
SOCIAL MEDIA, BLOG AND ONLINE STORE
CAN INCREASE CUSTOMER INTIMACY.
W Hotel online store!
Instagram menu by Comodo restaurant in NYC!
Four Seasons’ gastronomy map on Pinterest!
The blog from the Standard Hotel, NYC!
APPS CAN ENHANCE THE
Intercontinental created an app
that allows guests to browse
hotels and obtain local
information about destinations.!
W Hotel launched an app that
offers exclusive DJ mixes. The
idea is to “bring a part of W
hotel” back home.!
Marriott developed a mobile
app that permits guests to
make ‘in-meeting’ requests
such as coffee reﬁlls and room
The combination of gamiﬁcation, digital marketing and social
circles have the potential to radically change the way loyalty
IS PEER MARKETING THE FUTURE
OF LOYALTY PROGRAMME?
Using information from social media circles, loyalty
programmes could become more personalised and addictive.!
COULD LOYALTY PROGRAMMES
BECOME THE ULTIMATE REAL
GAME = LUXURY?
FOOD FOR THOUGHT
Gamiﬁcation is a powerful way to create
behavioral loyalty. But is it appropriate for
luxury products and services?!
To add value, loyalty programmes must get “personal” with
their customers. Design thinking tools such as personas
and journey mapping allows to build empathy.!
The business traveller!
The young traveller!
The senior traveller!
Personas allow you to build empathy
with different customer segments.!
CUSTOMER JOURNEY MAPPING
mapping allows to
identify all the
digital touch points
1. STAY ON BRAND
Don’t be everything to everybody. Be
consistent with your brand core values. !
2. BE SOCIAL
Leverage online social circles to foster
competitive behaviour as well as a sense
3. PLAY YOUR PART
Use game mechanics to engage customers
and give them goals to achieve.!
4. KEEP MOVING
Business got mobile and your
loyalty programme should to.!
.5. THINK DIFFERENT
Forget the copycat approach
when trying to be different. !
The loyalty rate isn't
that high. I could have a
big hit, then put out the
next single, and they
say, Oh yeah, who are
you? Prove it again.
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