Chances are that your hotel or brand operates a frequent guest loyalty program. Chances are also good that you are not entirely convinced that those frequent guests are really loyal. Instead, you might suspect that those guests are just in it for the rewards. It’s hard to prove that the program is actually building customer loyalty if your guests are staying with you until they earn some reward level and then they move on to a competitor to earn rewards there.

 

Since your brand is probably not going to cancel its loyalty program, perhaps the best plan is to figure out ways to make it work for you. The goal here is simple—keep guests coming back (perhaps building true loyalty) at a reasonable cost. With those ideas in mind, three researchers put together 10 ideas for improving your guest loyalty program. You’ll find them in a new report from the Cornell Center for Hospitality Research, which can be downloaded at no cost (http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2010.html). The report is based on observations of existing frequent guest programs and the underlying psychological principles.

 

The researchers suggest that some or all of the following 10 points may help you improve your loyalty program.

 

1 Keep customers engaged. Give your customers many chances to interact with your company, either on the Internet or in person, even if this does not involve a purchase.

 

2 Design your program to offer rewards that provide high value at a low cost. For example, offer a free service instead of free rooms.

 

3 Know your customers so you can structure your program and its rewards for what your customers really want.

 

4 Create customer tiers that are meaningful. If the gap between your reward tiers is too great, your customers will give up once they’ve earned their first reward status.

 

5 Develop partnerships with other suppliers. Use corporate alliances to exchange products and services so that all parties benefit.

 

6 Make your customer tiers dynamic. Offer different additional rewards as appropriate for those who are working toward a higher tier.

 

7 Give your customers choices and make the program fair. Rewards can be made flexible, for example, by allowing guests to choose when they receive their tier rewards. Customers want to feel that they have earned their status.

 

8 Find ways to make your program different, perhaps as an extension of your brand concept. If all frequent guest programs are alike, they give you no advantage, and they still cost you money.

 

9 Avoid focusing your program on price discounts and financial rewards. A program that focuses only on price discounts will call your guests’ attention to pricing. Thus, instead of loyal customers, you will have price-sensitive customers.

 

10 Use technology to involve your guests. It goes without saying that your guests expect to be able to manage their accounts on the Web, but you can use technology to track guest spending and to make appropriate offers.

 

 

Glenn Withiam is executive editor at Cornell University.