Giving loyal customers a reason to stick with you

22Jun10

During my last few trips, I booked all of the hotel rooms with the same hotel chain, and racked up a decent number of reward points along the way. So when I needed to book a new trip, the first thing I did was go to the loyalty program site, choose the appropriate hotel, and check what I could get with my points.

What I found was disappointing. I didn’t have enough points for a free night, or a partial discount, or even an advance room upgrade. So I called their customer support number, and spoke to some friendly but ultimately unhelpful people. They confirmed what I already suspected: there were no discounts or upgrades of any kind available for my stay. The best I could do was book the same rate available to non-loyalty program members. In other words, I would receive nothing for my loyalty.

With this in mind, I did what any logical consumer would do, and started looking at other hotel chains. Sure enough, I found a much nicer hotel at a better price from one of the first chain’s competitors. By failing to give me anything for my loyalty, the first chain encouraged me to look elsewhere — which I wouldn’t have done if they had made me feel valued at all.

The takeaway here is rather obvious: if you run a loyalty program, always have an offer available to members that is better than what you give to the general public. It doesn’t have to be a big offer, either. For instance, a hotel might offer a modest discount like $5-10 off the best online rate, or a coupon for free breakfast. Customers want to feel valued, and a little bit of recognition can go a long way. But if you treat loyal customers exactly the same as people who have never bought from you before, you’re basically telling people that their loyalty with you is worth nothing — and they’ll be far more likely to take their business elsewhere.



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