Marketing

16 Nov

The formula for creating loyalty

Written by Stephen Barr

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The first rule of customer loyalty is this: if your guests don’t have a requirement, they won’t come back.

This is obvious but it’s worth stating because marketers often forget it. If there is no reason for a guest to come back to your hotel, they won’t, however great their experience was.

So, the business person who books an in-week stay for the first time and doesn’t have reason to stay again in the future isn’t likely to make a repeat booking. It’s not a reflection on you, it’s entirely down to a lack of requirement and no amount of marketing will change that. 

In light of this, the most important thing you can do with a first-time guest is to find out whether their stay is driven by a one-off requirement or whether there’s potential for a return visit. As a marketer, no other piece of information is worth more to you. Once you have it, you can do two things:

  • Build a CRM programme around guests who might stay again;
  • Ignore those who won’t

Only guests who have an ongoing requirement can become loyal.

The second rule of customer loyalty: you can’t make people do what they don’t want to do.

Let’s revisit the business person who booked for the first time. We found out that she’s got an ongoing requirement and, while our brand has seen her for the first time, she’s regularly in town on business trips. 

So, what we can do—with her permission—is send her reminders about our brand, why she had a great experience, and tell her we’d love to see her again. Now you have the start of an eCRM programme, designed to attract repeat business.

We can and should use the data in our database to predict how likely a return visit is, when this is likely to be and what the future value (£) of her business will be. We should base this on what we know, not least that she’s told us she has a requirement for business trips. 

We can even begin to ask whether she might like to stay at the weekend, during which time she can have a different experience, like a leisure break rather than a work trip.

But (and it’s a big ‘but’) the data we have does not support the idea that she might be open to a weekend stay. This means that we’ll have to examine the marketing responses even more carefully. Why? Because these are the things that lead to a change in guest booking behaviour, i.e. that they stop being a customer at all. 

Marketers don’t like this fact and often ignore it, preferring to focus on response rates and revenue derived from communications. In contrast, the moment after I’ve looked at those statistics to check on the direct response, I also look at the non-response rate, the unsubscribe rate and other measures of negative behaviour, such as overall revisit rates, especially for my best Guests. 

You can’t make people do what they don’t want to do, and trying too hard to get them to do something new often ends up with you losing the business you had in the first place.

Instead of focusing on the new, marketers should instead focus on encouraging guests to repeat their behaviour (remembering also the first rule, which is: “If they don’t have a requirement, they’re not coming back”).

The third rule: give me a peak experience (occasionally)

Loyalty isn’t driven by what happens to guests; it’s built from what they remember.

My son and I were in London a couple of years ago, staying one night at a hotel I regularly use. When we went to reception to check out, the receptionist said: 

“Good morning Mr. Barr, good morning Toby. How are you today?”

This greeting preceded one of those short, pleasant, forgettable conversations that people often have at checkout. As a guest, I expect the staff at checkout to be polite and friendly, and at this hotel they are. It’s not a reason I stay, but I wouldn’t return if they weren’t. 

My son had a different experience. As we left, Toby said to me in an excited tone, “Daddy, they knew my name!”  

He’d just had a ‘peak experience’. 

Now, every time I’m staying in London and he’s aware of it, he asks if I’m staying at the same hotel. It’s also the only hotel in London he knows by name and the only one he ever wants to stay in, and all because of one peak experience.   

Do I want lots of peak experiences? Does he? Does anyone? No, not really; it would be exhausting for both the guest and those given the task of creating those experiences. But they’re nice on occasion and they’re the things we remember.

So, to encourage my loyalty you’ll need to occasionally surprise me, but what I really want is something else.

The fourth rule: everyday delivery

There’s a reason successful businesses spend a lot of time and money on their branding; it says something. It says: “This is what you can expect”

It doesn’t matter whether the brand is budget or 5 star, branding says ‘consistent and predictable’. And that’s what most people want, most of the time. 

It doesn’t really matter which industry we’re talking about, either. If your favourite restaurant happens to be a chain, you’ve got an expectation built on previous experiences, even if you’ve never been to a particular branch before. This is also true of experiences shared among friends, who will each have their own impression of the establishment. 

Branding makes it easy to know what you can expect, so you can make a better (for you) decision about where to go this time. It doesn’t matter whether it’s a restaurant, a shop or a hotel, just 

Do what you did, last time, every time.

Independent hotels may think that branding doesn’t matter, but that couldn’t be further from the truth. Your brand isn’t simply your logo, your website or your uniforms, it’s also the look and feel of the buildings and the culture that your staff share and the way everyone treats the guests. The brand is the embodiment of everything you stand for, whatever the size of your business or your budget. 

How this helps engender loyalty is obvious: if the guest’s everyday expectations are met every time, then staying at their chosen hotel doesn’t generate questions, queries or concerns. Most often, all the hotel needs to do to be successful, is to be consistent in delivering what the brand promises.

Bringing it all together, I often think that we can sum up the recipe for growing loyalty as follows:  

“Don’t surprise me (apart from the occasional nice surprise), just do what you did last time and if I’ve got a requirement, I’ll probably be back.” 

Exciting? No. Essential for creating a Loyal following? Yes.

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