Photo: Remember Group.
The lodging industry’s efforts to “own the customer” with direct deals are worrying some travel agents, who are concerned that special offers will shift their clients’ loyalties. But a recent panel of loyalty experts said it’s personal interaction and attention that ultimately win the hearts and minds of consumers.
At a discussion hosted by Intercontinental Hotels Group (IHG), loyalty marketing executives from some of the world’s top brands said points are increasingly less important than experiences and personalization. They also debated what makes a customer loyal, and how businesses can deliver on a brand promise to retain those customers.
Panelist Stephan Henneberg, professor of marketing strategy at Queen Mary University of London, said that despite their resources and advantages, large companies still are struggling to understand how consumers define a relationship with them. “There is a very important distinction between loyalty membership and emotional loyalty,” he said, and companies are just beginning to develop programs that instill true emotional loyalty.
“The key is personalization,” said Susanna Freer Epstein, IHG’s senior vice president of customer loyalty marketing. “2017 will be the year of the human touch, and being real,” something travel agents can deliver on because personal attention is the hallmark of their brands.
Personalization requires marrying profile information, booking and operations data, and the information gleaned from individual feedback, focus groups and personal interactions between clients and frontline staff. Combining “big data” with this “little data” will empower better marketing and customer service, the panelists said.
Ford Motor Company has hired anthropologists and psychologists to help interpret its big data through a human lens, and shape a corporate culture that wins consumers’ hearts and minds, said David Sanabria, head of connected consumer experience.
As companies grow their understanding of what loyalty looks like, “we are going to see personalization take two or three steps forward in the next few years,” Freer Epstein said.
This could result in more tiers in frequency programs, like IHG’s Spire, launched in July 2015. Spire members, who stay 75 nights or more per year, benefit from more choices in how to earn and spend reward points. “Clients told us they would reward us with more loyalty if we provided them with more choices,” Freer Epstein said.
Or it could be something “less packaged and polished,” she said. “We want to surprise and delight. So say a loyal customer checked into a hotel and without expecting it, the front desk simply welcomed them and said, ‘We have two tickets to a Broadway show for you.’ We want to deliver things that are relevant, benefits that are useful for guests during their journey, like we are traveling side by side with them.”
For travel agents, this might mean inviting clients to social events, the panelists said. Dow Jones chief marketing officer Suzi Watford said, “you’re going to see companies hosting more live experiences, where groups of customers come together. This sense of community gives back to them more of what they came to us for in the first place,” to be with and share with like-minded peers.
IHG holds regular social events for its frequent guests. “I’m always blown away by how many people will take a day of holiday to spend a day with us, sharing their stories and their passion with other [IHG] customers,” Freer Epstein said. “I think we have to do more of that. That’s what connects us as human beings.”
A loyal customer base comes at a cost
Henneberg warned businesses that as they identify their most loyal customers, they will find these clients are also the most demanding. “If something goes wrong, a simple apology won’t do,” he said. “They will want to know where service broke down and want to be assured that you know how to prevent it from happening again.”
Freer Epstein at IHG agreed. “It’s terribly important for them to know you remembered what happened and took action to fix it,” she said. “We must assure the customer that we have addressed the issue.”