Following an interview with travel intelligence platform, Skift.com, for its hotel loyalty research report (available to buy), Steve Grout, Collinson’s Director of Loyalty, explains how hotels can use data intelligently to combine transactional with emotional benefits and rewards to develop a robust loyalty strategy.

In terms of innovation in the loyalty space, airlines have historically led the way and more recently we’ve seen some exciting, experimental work in retail. Hotels sit somewhere between the two. There is however a tremendous opportunity for hotels to gain some ground. Given the significant amount of customer data they hold, in addition to having a physical presence, hotels are in a great position to create that much-needed innovation and relevancy with their guests, while delivering engaging customer experiences in person.

More than just points

Loyalty doesn’t just refer to the conventional points-based programmes – it comprises the overall customer journey from researching stage right through to the actual stay at the hotel and thereafter. While certainly a major factor, it’s not simply about discounts or a free night stay after several visits - it’s about using the customer data you have available to better understand guests and offer more relevant, personalised experiences that say, ‘a brand knows me, cares about me and will go that extra mile’.

Loyalty is a brand strategy. The most successful companies treat loyalty as a core element of their organisation’s plan, aligned to their customer service and overall guest experience. To develop a robust loyalty strategy, you need to offer customers varied ways to earn and redeem their points, not just reward them for their transactions. It is also about recognition, status and personalised benefits and services.

Make that emotional connection

Alongside transactional rewards, using data to its fullest potential enables hotels to offer softer perks that build an emotional connection that will help to make customers feel recognised and keep them coming back.

These softer perks or benefits don’t have to cost the earth to have a positive impact with customers. Take, for example, a customer returning to your hotel for the third time. Analysing data from their previous stays reveals that they opted for a room with a sea view. By proactively offering them the same or similar room for their upcoming stay, you show them their individual preferences have been noted and that you care to make their guest experience as pleasurable as possible using the available data.

As Steve told Skift’s Senior Research Analyst, Wouter Geerts, customers are fully aware that brands collect data and tend to be willing to share it if they can see the benefits of doing so. In return they expect results, such as individualised experiences and one-to-one communications, in return for their valuable data and sustained loyalty. To move away from a tiered-level segmentation approach, hotel brands must use data in a positive, proactive and innovative way to offer more intelligent, personalised and enjoyable benefits and rewards.

Trust plays an important role here. As hotels understand the value of the loyalty programmes with returning customers generating revenue, they must show that they use the data they hold responsibly and securely to improve the individual guest experience.

Finding the ‘sweet spot’

While loyalty points still have a place, offering customers varied ways to earn and redeem them can make membership statuses more attainable and the loyalty programmes more engaging. As quoted in the report (available to buy), Steve said that “while many consumers are attracted to the points-based programmes, there are some people that know the field very well and game it. Whether they do it knowingly or not, this should not be underestimated”, so it’s advisable to have a supporting ‘fair usage’ policy in the Conditions of Use.

Hotels need to find innovative ways to nurture individualised guest connections to encourage customer engagement and fuel brand preference, beyond the point-based programmes. Softer, emotive benefits also work to retain existing customers and help attract new ones, while driving healthy, profitable relationships.

Ultimately, when creating a robust loyalty strategy, there’s a fine balance between transactional and emotional elements that will inspire customers to keep coming back. Getting this right will enable hotels to make the experience memorable at every touchpoint.