People, not points create loyalty in hospitality

The hospitality industry needs to focus on loyalty in terms of personal engagement and human interaction, rather than simple rewards, as customers are increasingly motivated by experiences and by personalisation, according to Joanna Kurowska, managing director UK at IHG.

She believes that “loyalty is a choice” for people whether in their work, leisure or personal lives and says that hotels need to think more about how the industry can meet guest’s needs as people rather than as customers.

“Everything we do and the choices we make in terms of what we offer guests, is about enrichment,” she says when discussing the best way to approach building loyalty. “The side of the points and the rewards is the secondary part, we start with the ‘what’ and the purpose of what we are offering. The points are a good tool, let the point system be there. But why do people choose any of our brands? We talk a lot at IHG about purpose generation, which is why we see loyalty to brands that can express the same purpose.”

Kurowska adds that too many hospitality groups focus on how they can engender loyalty rather than thinking about how their staff can interact with guests in a way which by its nature brings a stronger bond between the hotel brand and the customer.

Guests want to be heard

“It is more about being understood and heard by the receptionist when you check in. What you will notice is if, for example, the receptionist sees that you don’t want to talk because you are not having a good day. That is a personal service that can be easily achieved at any level, whether it’s in a luxury hotel but also at a Starbucks,” she stresses.

“What really matters is showing empathy and that the human touch prevails,” she adds.

Paul Harnedy, EVP, Cedar Capital Partners, also believes that the points system has its place within loyalty schemes and remains a relevant method for helping to attract and retain guests but like Kurowska, warns against using technology as the solution. Instead he advises mixing it with personal and human approaches.

“Points systems are still relevant, with more and more built on offering experiences because what customers will remember is the feelings they have from those. Let’s not forget, hospitality is all about people,” he says.

While Harnedy believes that technology can help with customer service, he also says that it requires careful thought in terms of its application and in determining whether it enhances or detracts from the guest experience, right from the booking process and onwards.

“Enabling AI in the background takes away tasks, allowing the team to focus more on the touchpoints with the customer, so AI does have potential,” he says.

However, he notes that technology that allows guests to, for example choose their own room while booking their stay online or that enables guests to effectively self-serve and make their own decisions about the facilities they do or don’t want, could provide effective “attribute selling” but also comes with risks.

“If you take it too far, you can potentially make people disloyal, as they feel [financially] squeezed for everything they choose,” he warns. “So it may make more money on the booking but you have to think about the longer term.”

Standing out from the crowd

He says instead that companies need to look at their approach to loyalty more from a brand perspective and how they can stand out.

“In a congested and competitive market, we all want customers to choose us over our competitors and I believe, more and more, that the experiences and how we make the guest feel are more valuable than the traditional methods of building loyalty,” he adds.

Similarly, Kurowska insists that hotel operators and their customer teams should not get distracted by the cost of stays and what is expected, instead focusing on what the business promise is and delivering on that.

“The price is what it is, essentially it’s a function of supply and demand,” she says. “Depending on the brand and purpose, the staff need to understand where they work and what they are supposed to be bringing to their clients, and then behave and perform at this level.” Hospitality businesses also need to be aware of the risk of loyalty being broken, she adds, should a brand fail to deliver.

“This suddenly can become a cycle. We all strive for new members but what we can’t ignore is how we appease those we did disappoint,” she says.