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Insight: Hotels must demonstrate customer memory to win

Over at Hotel Executive, commentator Allison Ferguson highlights one of the most critical misses in hotel loyalty programs: the inability of operators to use program data to personalize rewards, demonstrate empathy, and create memorable moments that build real relationships. Demonstrating customer memory is arguably the most important distinction that hotel brands can create to shift customer share away from online travel agencies (OTAs) and Airbnb – so what’s preventing them from doing so?
By Rick Ferguson

Ferguson (full disclosure: Allison Ferguson is married to Rick Ferguson – this article’s author. Her company, 500friends, is also a sponsor of the Wise Marketer) outlines a scenario common to any frequent traveler: no matter how many times you stay at a particular hotel brand’s properties, and no matter how long you’ve been a member of their program, the hotel brand seldom, if ever, demonstrates knowledge or memory of the relationship. This scenario is true even if you repeatedly stay at the same property. With hotels competing for market share with OTAs and Airbnb, using customer data to demonstrate relationship “memory” is the most critical opportunity for hoteliers to succeed. Money quote #1:

“Here’s the problem: While there’s no question that hotels are focused on data, most have yet to demonstrate the ability to leverage that data on a personal level. Hotel companies often do mine the wealth of “big data” in their organizations to optimize pricing, forecast demand, or determine where to locate the next hotel. What often doesn’t happen: the deployment of “little data” to build customer relationships through touchpoints before, during, and after the hotel stay.
“In the age of online travel agents (OTAs) and Airbnb, with consumers enjoying more choice despite industry consolidation, hotel companies must capture and realize the power of customer-centric data to change the conversation. The most effective way to do so: demonstrate “memory” of your customer relationships by using customer data to demonstrate:

  • “Personalization – Deliver better offers and promotions to me and personalize my experience
  • “Empathy – Anticipate what I might need when I’m traveling
  • “Memorable moments – Create moments that build anticipation for future stays

“Without this ‘persistence of memory’ in the value exchange, it’s difficult for a brand to demonstrate commitment to its best customers. And without that demonstration of commitment, it’s difficult to build sustainable loyalty.”

To leverage loyalty program data to deliver on this commitment, Ferguson recommends the following solutions:

  • Personalization: Deliver personalized recognition, rewards, and recommendations to members based on their travel behavior and stated preferences.
  • Empathy: Use data both during the booking process and at the property level to anticipate guest needs and respond them – often before the guest even thinks to ask.
  • Memorable moments: Ferguson illustrates that a memorable moment doesn’t have to be a complex one.

“Sometimes it’s not how sophisticated your data use is, but how simple. A single piece of past stay history, for example, can create a simple but memorable check-in experience. One example: a simple “yes” or “no” flag on the PMS indicating a past stay at a hotel. If “no,” then I get the standard welcome with the request for ID and credit card. If “yes,” then I get a “Welcome back” greeting, and perhaps a surprise-and-delight reward. The result: a small but memorable moment.”

These lessons are, of course, applicable beyond the hotel industry. Demonstrating memory is of critical importance to any customer relationship; it’s how you encourage a customer to move beyond transactional loyalty to something closer to advocacy. Customer data is the fuel, and your loyalty program is the engine. No reason not to fire it up and get moving.

Rick Ferguson is Editor in Chief of the Wise Marketer Group.

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