Anyone running a hotel knows that excellent facilities and stellar service remain the most powerful driving factors for repeat business. But hoteliers shouldn’t sleep on other strategies to further encourage customer loyalty and patronage. One particularly effective marketing strategy is the loyalty program.
A loyalty program aims to reward customers for returning to an establishment, therefore encouraging them to support the business more often. For instance, travelers looking for hotels in Pasay are more likely to book a hotel they’ve been to if they enjoyed the service and the facilities, and a loyalty program might be the only nudge they need to rebook.
In terms of marketing strategies, loyalty programs make good business sense. When marketing your services, it’s easier and more affordable to drive repeat business than to look for streams of profit. A loyalty program would therefore be a smart and cost-effective inclusion to every modern hotel’s business strategy.
If you’re looking for creative ways to engage your customers and to welcome them back to your establishment’s doors, here’s a briefer on how loyalty programs work and why it’s worth implementing a loyalty program to boost your hotel’s business growth.
How Do Hotel Loyalty Programs Work?
While hotel loyalty programs employ different methodologies, they all have similar goals. The logic is to reward customers for spending money at their property and to drive repeat business.
Following a point system, like that of Kabayan Hotel’s Privilege Card, most hotel loyalty programs encourage members to collect points by booking nights or spending money at the hotel. Customers can use these points for room upgrades, discounts on dining or services, or even future stays. In addition, some hotel loyalty programs reward members for using partner credit cards or shopping with affiliate brands.
What Are the Benefits of Rolling Out Your Own Hotel Loyalty Program?
A loyalty program can be a valuable tool to encourage repeat business and to build long-term customer relationships. For proof, you can look at the results from a two-year study conducted by the Cornell University Center for Hospitality Research in North America, which surveyed 50,000 hotels to assess the effectiveness of their hotel loyalty programs.
According to the findings, guests who enroll in a hotel’s loyalty program tend to book stays at the same hotel 49 percent more often than non-members. The same study indicated that loyalty programs contributed to a 57 percent increase in bedroom revenue.
To illustrate further, below are some specific benefits of rolling out a hotel loyalty program:
When employed successfully, customer loyalty programs can boost your bottom line. Thanks to the program’s incentives, members are more likely to spend more money at the hotel during their stay by upgrading their room or purchasing additional services, such as dining options or spa treatments.
Another bonus benefit of rolling out a hotel loyalty program is word-of-mouth marketing. Loyalty program members will be more likely to recommend the hotel to friends and family, which can lead to increased bookings and revenue.
It’s no surprise that hotels with loyalty programs are more likely to be chosen by customers than those without. Rewards or incentives for repeat bookings, such as a free night’s stay or a discount at an on-site restaurant, can encourage previous customers to return and stay loyal to a particular brand.
In addition, loyalty programs can help strengthen the emotional connection between the customer and the hotel brand. Customers who feel appreciated and valued by your staff will be more likely to support your hotel than to take their business to a competitor’s doorstep.
A hotel loyalty program is an affordable way to market your hotel as it’s designed to retain existing customers rather than make new ones through costly promotional and advertising campaigns. Acquiring new customers can be heavy on the pocket, as it requires significant investment in marketing activities.
Conversely, loyalty programs are designed to reward customers who have already shown an interest in the hotel, making it far more cost-effective. If you want to be careful about your marketing budget, consider dedicating a significant chunk of it towards your loyalty program.
A 360-Degree View of Customer Data
Customers who sign up for a hotel’s loyalty program are often required to provide their personal information, including their name, email, phone number, and address. With customers’ consent, hotel operators can use this data to create a customer profile that notes their past stays, preferences, and other relevant information.
Hotels can use this demographic data in many ways. For instance, hotel owners or operators can create targeted marketing campaigns that align with the preferences and needs of each customer segment and drive more revenue for occasions like holidays, family vacations, and milestones like weddings and anniversaries.
What Makes an Effective Hotel Loyalty Program?
A successful hotel loyalty program should not only be easy to join, but easy to participate in. Loyalty program members should have full access to rewards information to track their rewards or update their personal information whenever they want to.
Most importantly, successful hotel loyalty programs should offer near-instant gratification. Members shouldn’t feel like they need to jump through hoops to collect points or gain access to rewards. Racking up points and using them for rewards should feel like a natural process.
As seen above, a hotel loyalty program can increase customer retention, generate repeat business, and be a powerful marketing tool for cultivating valuable customer insights. Consider leveraging the unique benefits and rewards of your own hotel loyalty program to build brand loyalty and establish your brand as a leader in the hospitality industry.