Is reputation the key to loyalty?
This weekend, I bought some new kitchen appliances and was automatically signed up by the sales person for yet another loyalty program with a complicated points system that I not only will never understand, I’ll never use it. My membership in this loyalty program is meaningless. Consumers are overwhelmed with loyalty programs, so much so that they are no indication of loyalty at all anymore. Far from it.
A Deloitte report on creating loyalty programs that work notes that 30 percent of hotel loyalty program members are “at risk of switching their preferred brand” and 50% of travelers’ spend is not with their “preferred” brand.
Loyalty is harder to come by, yet essential to profitable operations in a competitive market. Repeat guests are far more valuable than one-time guests, and according to Gallup, engaged guests spend 46% more than unengaged. (The same report suggests that loyalty is a product of emotional attachment combined with rational information.)
If loyalty programs aren’t a true determinant of loyalty, where will hotels find it? In reputation, at least partially, according to “The Role of Customer Satisfaction and Image in Gaining Loyalty in the Hotel Industry.” The authors contend that “the intangible nature of the service ‘product’ essentially forces customers to anchor their decision to become loyal on relatively more dependable cues-such as the firm’s image and reputation.”
Another key finding: businesses showed up to a 60% increase in sales to new customers that could be attributed to “customer recommendations—an indicator of customer loyalty.”
As hotels, and everyone else it seems, try to identify how to create loyalty among travelers in the quest for lucrative repeat guest business, reputation should be a paramount consideration. Not just your property’s overall reputation but how that reputation is conveyed. Is it simple for travelers to get an overview of your reputation or are travelers just reading 2 or 3 (often extreme) reviews? How do the reviews look? A long list of text reviews won’t do anymore. Are travelers easily able to share their experiences to generate those lucrative traveler recommendations?
Tapping into the emotional side of guest loyalty requires digging deeper into reputation to ensure travelers get the big picture in a simple and visually appealing way.