Loyalty Program Strategy Tips For Hotels
Hotel loyalty programs are a big deal. In 2015, Access Development reported that hotels have 288.7 million loyalty program members. The problem, however, is that even though hotel loyalty memberships have risen in recent years, engagement hasn’t — and it has even declined in some cases! You need to set your loyalty program apart. Here are some tips to get you started.
Make It as Easy on Your Members as Possible
One of the main reasons people don’t join loyalty programs or don’t redeem their points is because the system isn’t always easy to follow. Research shows that:
- 70% of people don’t sign up for loyalty programs due to the inconvenience and time it takes to register
- 92% of business travelers say that ease of redemption is what gets their attention with a loyalty program
- 41% of Millennials say they joined a hotel loyalty program because rewards were easy to earn
The research is clear: people don’t want to work to earn rewards. Every interaction with your members should be made as simple as possible for them, including signing up, earning rewards, tracking points, redeeming rewards, and yes, even canceling their membership.
Another thing that turns people off from loyalty programs — either signing up for them or engaging in them — is surprises. In fact, 19% of customers will skip their plans if charges are added while they’re booking with loyalty points.
Other areas where loyalty programs tend to fall short include:
- How points are calculated
- How to earn points
- How (and when) to redeem points
It’s important to be transparent about your program to ensure loyal customers remain loyal.
Tailor Your Program to Your Audience
While the above mentioned tips should get you pointed in the right direction, it’s important to remember that each strategy works only when specifically applied to your business. That means you need to know what your customers are interested in receiving before putting together the loyalty benefits. For example, research shows that:
- 40% of Millennials prefer rewards programs to be available on a mobile app
- 37% of Millennials prefer their loyalty reward to be discounts
- 51% of Millennials are incentivized to join a loyalty program if rewards accrue quickly; 50% will leave if it takes too long to accrue points
Notice, however, that these statistics only apply to one group. Gen X and Baby Boomers are influenced much differently, as are segments within those groups, such as individuals of varying income levels. The key, then, is to figure out not only who your customers are but what they want. One size does not fit all when it comes to loyalty programs, and understanding that and acting on it is what’s going to help your hotel loyalty program stand out.
Personalize Your Loyalty Programs
One thing that can contribute to low engagement rates is when you attempt to target everyone. As the saying goes, when you try to appeal to everyone, you appeal to no one. Oftentimes, reward programs are based on a select few rewards, such as free room nights. But not everyone wants or needs the same rewards. For example, a budget-conscious family that travels a few times per year might really enjoy a free night’s stay. A business traveler, on the other hand, may not care as much about the money but might want perks like early check-in.
Therefore, it’s not enough to target your “average” customer. Your loyalty program must be able to accommodate each person’s individual needs. By tracking each customer’s spending habits, you can better tailor your rewards specifically to that individual. Not only will it increase customer loyalty across the board, but it can boost your bottom line, too.
Ready to get the ball rolling on your hotel’s loyalty program? Contact our experts at Luth Research to help you collect the data you need from customers before laying out your benefits.