Basic principles for a loyalty program

. 4 min read

Reward those who return and trust our product is crucial to the health of your hotel, however the size and format it adopts. Gone are the days when access to loyalty programs was something selective, creating idea of ​​exclusivity and only practiced by major brands.

The goal is simple: Capture, retain and make this guest a business promotion partner. “Word of mouth” is the most honest and fair way to recognize the value of what we do and the most inexpensive way to acquire new guests. In terms of costs, it is much more efficient to retain satisfied guests than to invest to capture new ones.
Nowadays, we even find this system reversed. Some people sell loyalty programs even before the person becomes a guest or a customer.

How can we recognize and reward those who trust and return to us?

The entire team must be involved in the process, as several points of contact with the guest are required. We will have to establish distinguishes them from others guests, create and implement systems and procedures. Not only is it a way of thanking the trust, but also encouraging this relationship to continue in the next visits.

Examples of rewards:

  • Points that can be exchanged for discounts on rates, for free nights or even services
  • Access to exclusive or limited services such as priority check-in or late check-out
  • Free room upgrade
  • Partnerships with external entities at special prices
    As far as rewards are concerned we must be creative, but do not be limited to it but also the way we identify the guests. You can and should establish a grid of levels with different rewards, in order to maintain the idea of exclusivity and add value

Promote the loyalty program

Broadly promote the advantages associated with who visits us again as well as the loyalty program. You can even take the chance to ask a simple question at check-in. Ask if you can associate his visit to the loyalty program. Then, if the guest has not signed up yet, he will know then the associated advantages if he returns on his next visit to the city. Check if there is in-room information about the program and make sure this information is visible offline and online. Involve the team to make known the program and its advantages.

Even if the guest identifies himself with the hotel, in terms of brand, location, amenities, design, is its human factor that touches him deeply, in all interactions during his stay. It is the staff that conquers and promotes the guest's return. It's the team that makes him feel at home. Ensure that the whole team, one by one, regardless of their department and function, understands the advantages of customer loyalty and its program. Train the team for guest recognition, in order to thank him for the visit and customize service with his preferences.

Take advantage of technology

Use marketing tools, create different communications with guests after their departure. As an example, for the first timers, you can send an email to thank the visit and make known the advantages of the loyalty program. For frequent guests who have not yet sign up the loyalty program, you can always reiterate its benefits and advantages.
Optimize tools to handle all relevant guest information. Use PMS and CRM or loyalty program software. There are several solutions on the market. Keep a careful management of all pertinent information, such as room-nights, number of bookings, revenue generated, segments, etc. Identify your best guests and tag them for special treatment.
Show all advantages and create an atmosphere of enthusiasm and esteem with guests through the multiple channels. Make them feel involved and identified. The probability of return increases substantially.

Which are the steps to build a loyalty program?

1. Choose a unique and appealing name for the program - The program will have to arouse curiosity and encourage guests to subscribe. You will have to pass on the idea of the many advantages that it offers and be enthusiastic for those who participate in it.
2. Make the program more than a balance of points - In addition to the general advantages of any loyalty program, offer through it, added information a create value. Take advantage of this new channel of contact with your preferred guest.
3. Reward the various forms of guest interaction – Guests who engage with our social networks, who share content and actively promote our hotel, should also be rewarded through the loyalty program.
4. Create Reward Levels - Make a flexible program, give it depth. Different offers for different frequent guests. Possibility of using points or credits in several ways. Your client will privilege this flexibility.
5. Explore multiple partnerships - Extend the program outside the hotel through partnerships with other products of interest to the traveller.
6. Use metrics to analyze production per guest - There are many indicators that help decision making in a company. There are also indicators to measure loyalty. We show here two examples, percentage of repeat guests, and revenue generated by them over total revenue:

$$\text{% Repeat Guests} = \frac{\text{Number of repetitions}}{\text{Number of occupied rooms}}\text x 100$$
$$\text{% Revenue Repeat Guests} = \frac{\text{Revenue generated by the repetitions}}{\text{Total Revenue}}\text x 100$$

7. Make the loyalty program a game - Encourage the participant with a fun program, in a game full of levels that translate into points through an embedded applications in it.

If you are looking for a more complete loyalty program for your business and you are unable to implement one, you can always use multiple solutions in the market for loyalty networks, or you can also affiliate a soft brand [1].

Final considerations

If the guest enjoys the benefits of our program, he will recommend the same to his friends and family. As mentioned above, this is the most honest and trustworthy way of recommendation. These kind of recommendations will generate content for reviews websites like Tripadvisor, directly affecting our online reputation. Loyalty programs that encourage evaluation on these platforms and on social networks will result in user-generated, reliable, and authentic content.
Take advantage of these guests who have deep knowledge of your property and ask them for feedback on new services, amenities or policies. Nothing like the customer and his point of view to help in a constant development and perfection of our business.
The advantages are countless and go beyond revenue collection. It does not end in the guest, as it expands to its network of contacts and makes him a valuable partner.
In a future article, we promise to go deeper into the ratios that can be taken into account in your loyalty program.

Contact us

  1. Soft Brand is a brand, or seal of reference, that shares a culture and a sales and marketing structure. It arose with the need for independent hotels to face large hotel chains brands. By becoming an affiliate, they will share marketing and sales efforts as well as create a more aggressive direct distribution channel to better compete with OTAs and other competitors. ↩︎

Susana Castro

With a degree in Tourism Business Management she has held operational roles in such areas as Front Office, Housekeeping, e-Commerce and Sales. She has specific training in Revenue.



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