Rewarding loyalty, particularly in the hotel sector, is now almost as much of an expectation as providing a bed to sleep in, and research shows that the next generation of guest - namely millennials - are big fans of loyalty schemes, meaning operators can expect it to be part of the landscape for many years to come.
However, as competition in the hospitality market continues to heat up, what can hotels, restaurants and pubs do to best reward and retain that loyalty?
Make it unique
While discounting a subsequent stay or visit may seem like a valid way to reward a customer’s loyalty, it is no longer enough to secure their booking again and hospitality operators are increasingly having to be more creative in their loyalty offering.
“There is so much competition out there, so you need to make sure that whatever you’re offering is unique and different and stands out in the swimming pool of other offers out there,” says Yvonne Ottley, marketing and communication manager at London Hilton on Park Lane.
Earlier this year London Hilton on Park Lane launched a membership programme Spa To You, allowing members paying a monthly fee to receive a 50-minute spa treatment and use of the hotel’s fitness suite.
The scheme, run by Spa To You founder Majid Hasan, not only allows the member a discount for the longer they sign up, but it also rewards their loyalty by exposing them to other offers within the hotel.
Similarly, regular guests of the hotel, both resident and non-resident, are given the chance to sign up to Spa to You and its services, which Ottley says not only makes them feel rewarded for their loyalty, but has also had a positive impact on hotel sales.
"We wanted a smarter way to cross promote our spa and gym and the wider hotel facilities, which is how the Spa Club was born,” she explains. "Our F&B offering may not have been obvious to users of the spa previously, but when they are Spa Club members we can see what they like and tailor offers accordingly."
Ottley said the hotel has already noticed an uplift in the number of afternoon tea sales since the start of the Spa Club and notably, the offering had also enabled it reach more non-residents.
"It not only gives our in-house guests a great offering, but it means we can also reach out to people in the neighbouring area who may be spa enthusiasts and looking for an experience. We have 453-bedrooms here, but our business is not just about hotel beds, we also provide an experience."
Scottish golfing hotel Fairmont St Andrews also noticed a 15 per cent uplift in the number of repeat bookings among its guests when it introduced some unique features to its Fairmont President's Club.
The free-to-join loyalty scheme offers the usual benefits to members, such as free room upgrades in exchange for points, but it also gives guests the option to join its FairmontFit programme.
"The FairmontFit programme has been designed to promote healthy living, and allows guests to book and receive made-to-measure sports equipment upon arrival," says Jane McGee, the hotel's director of sales and marketing.
Ahead of their stay, guests are encouraged to upload their measurements onto a personalised profile, and when they arrive at the hotel they are issued with equipment to wear in the hotel gym. The service is not only personalised, but guests appreciate its practicality, adds McGee.
"The scheme also saves guests on luggage space, which can be especially important for business travellers," she says.
Experience is everything
As previous research has shown, consumers are driven by a fear of missing out (FOMO) and while value and discount-led rewards still drive their loyalty behaviour, schemes that offer them money-can't-buy experiences are becoming more popular.
Last year Hilton Worldwide upped the ante with its HHonours loyalty programme when it started to offer guests 'experience-led' rewards, such as tickets to exclusive music concerts, sports matches and VIP meets and greets, as well as discounts and Airmiles. Marriott and Starwood have since followed suit.
"Hilton HHonours has always been the bread and butter of our loyalty, but last year the programme was re-imagined, so it wasn’t about giving away points and Airmiles. It has really taken it to another level, offering guests exclusive experiences that money can’t buy. We’ve had a lot of great feedback from it and guests have had some amazing experiences," says Ottley.
“I think the way the dynamics of hotels now, people are looking for experiences and the ways you can enhance that for them. It’s more than giving somewhere nice to sleep, it’s how can you add value to my experience."
Offering experiences to customers, whether they be music concerts, or invites to new menu or wine tastings, in exchange for their loyalty, can be a great idea, but it will only work if those experiences are applicable to your guests.
"Loyalty to brands can be changeable so we continue to review and ensure that each guest has their own individual experience," says Fairmont St Andrews' McGee.
"The key to long-term loyalty is knowing your customers and providing rewards applicable to them," adds James Sykes-Hagen, business development director at Zapper.
"Smart restaurateurs and businesses will tailor loyalty promotions based on deals from suppliers. Nonetheless building loyalty can be as simple as adding a personal touch; such as greeting a customer by their name."
Make it bespoke
As Jonathan Langston, the co-founder of the Annual Hotel Conference told BigHospitality last week, hospitality trails behind retail when it comes to personalising offers for their customers. Yet, due to hospitality's closer relationship with guests, it is arguably better placed in understanding their needs.
Recognising preferences and behaviours such as your guest's preferred brand of gin, their favoured location for a table or their regular check-out time can go a long way in helping to tailor loyalty offers, but often hospitality operators are not as effective in this area as their retail counterparts.
While it cannot replace the value that direct contact has in building a relationship with guests, technology has become a key way to help personalise offers for customers in a range of hospitality businesses due to its ability to capture data, which in turn can be used to tailor those targeted offers.
"In order to deliver a more personalised service, hospitality companies are increasingly using technology to combine internal and external data to create tailored and targeted offers to their clientele," says Tim Brown, senior director, F&B EMEA, Oracle Hospitality.
"For example, a coffee chain can work out how many times a customer visits in a month and then send targeted offers based on their behaviour, either to increase the number of visits and purchases, or to introduce them to a new product."
"Digital, in particular mobile, can collect a wealth of customer data which can be used to understand customer habits," adds Zapper's Sykes-Hagen, whose company captures data at the point of payment in its customers' outlets.
"Loyalty executed well will result in repeat customer visits and spend and will go a long way towards advocacy."
As Sykes-Hagen says, the brands winning at loyalty, both in hospitality and retail are those that 'have a holistic approach to loyalty', combining a personal, tailored approach with creative experiences and seamless service.
"In retail, where loyalty promotions are more advanced, Waitrose’s loyalty ethos, a mix of monetary savings with personal touches such as free coffee and magazines, ensures that shopping at Waitrose is enjoyable and part of their customer’s routine," he says. "Liberty is another good example of a brand that mixes promotions with experiences such as invitations to special events as part of their rewards systems.
"To get trust, businesses need to understand their customers and ensure that every interaction and touchpoint is as personalised and enjoyable as possible," adds Skyes-Hagen, whose company works with thousands of hospitality businesses worldwide such as Burger & Lobster and Rodizio Rico to help them speed up the payment process and understand their customers better.
"Ultimately it’s all about trust and transparency. If customers trust they are getting good value, relevant to them, and have clarity over how they will benefit, they will be more likely to exhibit loyalty behaviours," he adds.
This BigHospitality feature is sponsored by Zapper
Zapper is a fast growing, global data insights and marketing platform, enabled by mobile payments. It’s a simple solution which can seamlessly and efficiently process secure payments in a variety of different environments.