We all recognise the power of loyalty programs, and enjoy the rewards of airlines, card providers, stores and other businesses who reward our loyalty. Be careful about starting one that you can’t sustain though. This is a personal story, but perhaps salient to those of us who market for a living.
Before starting align.me, I worked for the Australian arm of a large US company, and commuted from Melbourne to Sydney weekly. So I stayed in lots of hotels. I was delighted when the manager of my regular hotel presented me with a silver Tiffany key ring on the occasion of my 50th stay.
It was unexpected, a grand gesture no doubt, and executed beautifully. I had always been loyal (or lazy), and this gift locked me in with love.
When he presented me with a Waterford crystal letter opener on my 75th visit, I was just as surprised. I told the world.
As my 100th stay loomed, I confess to a little anticipation at what might be in the offing. It passed without so much as a letter. My 150th and 200th stays were likewise met with silence. Their program didn’t extend that far; it had been designed for loyalty, up to a point.
During this time, I left the comfort of a multinational company and a great pay packet to start my own business, but despite being cash-strapped I didn’t change my hotel. Why would I? My motivation to stay in the hotel had not been these unexpected gratuities, but their central location, great room layout and amazing gym and pool. But I guess I was a little surprised that the acknowledgement had stopped. A letter and a handshake might have done it.
But the occasion of my 211th stay in that fine hotel was to be my last.
As with most hotels operated by the larger international management groups, this hotel has a great executive lounge which allows frequent guests (and the wealthy ones who pay for the privilege) to escape from the madding crowd. Breakfast is a less-hectic affair and a drink at the end of the day is a relaxing way to wind down. I’d enjoyed this complimentary indulgence for almost a decade, but not this time.
On my 211th stay in this hotel, I was greeted with a $45 bill for my visit to the executive lounge. In the 12 months up until that date, I had stayed in a Sheraton-branded hotel only 19 times. The exec club membership was reserved for those who stayed 20 times or more in a year in any of their hotels world-wide. The fact that all 19 of those stays were in that very same hotel, didn’t count. Rules are rules.
Loyalty is a reciprocal concept, and although the hotel waived the fee “on this occasion”, the stay was my last. It has been perhaps 8 years since I last stayed at the Sheraton on the Park in Sydney. Since then, I’ve chosen smaller boutique hotels, paid less, and spent the difference on a really good dinner. After almost weekly visits to the hotel, my absence was not noticed; or at least has not been marked by a letter or a call. Nor by any sadness on my part.
I’ve often reflected on this experience and have long-since given up trying to remove my misplaced feelings of self-importance and personal disappointment from the analysis. I felt a great association with the hotel that had been more than my accommodation; it had become a part of my personal brand in much the same way as a car can be.
The hotel’s front-desk staff were flawless: it was they who arranged the exceptional upgrades, greeted me as a returning family member, stored my Sydney clothes, and ensured that new staff knew my name and recognised me on arrival even when we hadn’t personally met. I was their number one guest and courtesy of these specific staff I enjoyed an undeservedly frequent access to their most beautiful rooms.
It was the management responsible for their loyalty program who lost this guest, and then failed to get him back.
Some simple lessons. perhaps:
- Build your loyalty programs (like your marketing campaigns) to infinity, not to next quarter;
- Only send seasonal gifts to customers if you can sustain this every year (at least until they aren’t a customer any more);
- Sweat the little things, not the big things – a letter and a “thank you” are easier to sustain than big gifts;
- Cut a little of your research budget out to make room to spend more time with lost customers to find out why they left you.