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Building Customer Loyalty through Personalization

By David Trice, CEO, ENGAGEcx

David Trice, CEO, ENGAGEcx

It is widely recognized that “hos­pitality” means the generous and friendly treatment of guests. For an industry that’s sole purpose is to be warm and welcoming, the generous and friendly spirit of hospitality is often lacking today, even for the most loyal of guests. A big segment of the industry has replaced a truly personalized guest experience with loyalty programs where points are accrued for a free night’s stay. And while loyalty programs haven’t changed much in the 30 years they’ve been around, expecta­tions of today’s guests have changed dramatically. Allen Smith, CEO and President of Four Seasons Hotels and Resorts says “our feedback from our guests is that they’re far less con­cerned about accumulating points to be redeemed for rewards as they are being in a position where they’re recognized, and we understand their preferences and can serve them in that highly per­sonalized way they’ve come to expect.”

"By recognizing and understanding behavior at each lifecycle stage, a company can begin to put together a detailed profile of each guest"

Today’s hospitality industry guests want loyalty rewarded with personaliza­tion : Know who they are, what they like, and why they are there. Anything short of this level of service is just a discount. And, it won’t build brand loyalty.

Imagine having the capability to de­liver a completely unique and personal­ized experience to every guest. The guest is greeted personally at every touch point, is recognized immediately upon entering the property, and is offered access to ser­vices in accordance with his or her prefer­ences. Preferred corner room reserved? Of course. Complimentary in-room break­fast? Done. Reservations to a favorite res­taurant? You bet. And, all of this is taken care of before the guest even arrives, so the property can “wow” him or her. While this scenario might sound like a bit of a pipe dream for many hospitality brands, the reality is that this level of service is attainable now–and without having to spend millions of dollars to implement.

The first step in offering this level of personalized service is to get to know each guest at every touch point, no mat­ter whether it’s over the phone, via the brand’s website, over email, or in-person at a property.

Tracking the Guest’s Journey

Each guest’s journey, or “Guest Lifecy­cle,” is made up of all of the touch points a guest has with a hotel or hospitality brand. A customer-driven CRM can map a guest’s lifecycle through tools like cookies and beacons, and even by inter­action with company personnel. For ex­ample, when a guest walks into a hotel, a beacon can latch onto the customer’s Smartphone, alerting the front desk that she has arrived to check in. By recogniz­ing and understanding behavior at each lifecycle stage, a company can begin to put together a detailed profile of each guest. This lifecycle provides brands the data needed to create the right metrics for determining how well they are doing in meeting the guests’ needs.

Measuring Customer Affinity

After establishing the framework to cre­ate the Guest Lifecycle, hospitality com­panies must measure how much a guest liked the experience for each point along the journey. Measuring guest sen­timent should include how guests view the relevance of each interaction, if the interaction had an emotional impact with them, and if the guest liked the outcome of the event. It’s important to rank important reactions from guests at various touch points throughout the journey. The methodology for captur­ing these ratings should be a part of the brand and may encompass techniques such as “likes,” star rating, mini surveys, through the company employee, and even may be algorithmically derived. The ability to capture and evaluate guest sentiment on every event lets a brand or property see how its relationship with guests trend over time.

Creating the Guest Value Index

The lifecycle provides the framework to create a single metric called the Guest Value Index (GVi). This index measures the impact of guest experi­ence on financial performance across key dimensions of engagement, senti­ment, purchase and advocacy-and it unites the company around one com­mon objective-maximizing guest ex­perience. The GVi offers insight into how guest experience investments are truly impacting financial performance. The key elements of the GVi include:

Frequency-How regularly does the guest interact with the brand across multiple touch points? This score will be calculated based on the number of events by the guest versus how often and with what degree of regularity the guest engages with the brand.

Feelings-Does the guest like the brand? The affinity score will be sourced from capturing the voice of the guest on every event and tracked as a trend over time.

Value-What is the level of the guest in the eyes of the company? VIP? Business traveler? Occasional visitor? The purchase score will reveal the frequency and depth of the financial relationship with the guest.

The intersection of these scores will empirically define the relationship with each guest at any given point in time. The beauty of a guest value index is that it fo­cuses hospitality companies on enhancing guest experience, rather than the sales cycle, allowing businesses or properties to see whether the level of engagement has an influence on stays- and whether guest affinity drives engagement frequency.

The index ultimately lets hospital­ity companies understand how customer experience drives financial performance. From market penetration to revenue generation, every hospitality property exists to maximize operating prof­its, and delivering on guest loy­alty is the key to reaching these financial goals.

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