Bridge.over Group at Geneva School of Business Administration (HEG)

Geneva School of Business Administration welcomed Youri Sawerschel, consultant at Bridge.over Group, to hold a workshop on customer loyalty in the luxury hotel industry.

Transcript

1. Geneva School of Business Administration! 12 December 2013! CUSTOMER LOYALTY: CHALLENGES, STRATEGIES AND DIGITAL OUTLOOK IN THE HOTEL INDUSTRY YOURI SAWERSCHEL STRATEGY & BRANDING CONSULTANT
2. Customer loyalty is like teenage sex.! Everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it.! Adapted from David Laniado!
3. LUXURY HOSPITALITY: THE BASICS
4. 1859   1846   1881   1907   1980   1990   1970   1940   1958   1964   1995   2005   BRIEF HISTORY OF THE HOTEL INDUSTRY
5. HOTEL BRAND $ Hotel owner Profit & loss Hotel brand Management fees
6. OWNER HOTEL MANAGEMENT FIRM Own the hotel asset! Manage the asset! Pay operating costs! Budget and manage operating costs! Pay refurbishment costs! Recommend appropriate design and equipment (brand guidelines)! Receive the profit and the loss! Receive management fees, trademark fees and distribution fees!
7. High variable cost! High fixed cost! Stock / on demand production! No stock (”perishable inventory”) Limited inventory! Production and usage locations are different (factory + retail + outside use)! Production and usage
 locations are the same! Few or no third parties distributors! Many third party distributors! Mainly leisure customers! Mixed customer base! “make the tangible intangible”! “make the intangible tangible”! LUXURY PRODUCT LUXURY HOTEL VS  
8. THE IMPACT OF INTERNET ON THE HOTEL INDUSTRY
9. TRAVEL PLANNING BEFORE INTERNET…
10. …TRAVEL PLANNING AFTER INTERNET
11. MARKETING SPENDING SHIFTED FROM PAPER TO SCREEN…
12. Source:  Adapted  from  HEBS  Digital   3 screens ready (responsive)! Account Management! Booking engine optimization! Cloud hosting! Analytics + campaign tracker! SEO! Meta search! Email marketing! Retargeting! Social media! Online retail! App! Loyalty scheme! Content marketing! MARKETERS MUST DECIDE WHERE BEST TO ALLOCATE THEIR BUDGETS
13. 92% Source:  L2  ThinkThank   of travellers book their trip online.! 63% of travellers consult reviews before booking online.! 57% of business travellers access information from a mobile device.! DIGITAL TOOLS MUST BE AT THE CENTER OF A HOTEL MARKETING STRATEGY
14. CUSTOMER LOYALTY
15. + + ATTRACT FILTER RETAIN IN ESSENCE, MARKETING GETS DOWN TO 3 SIMPLE STEPS…
16. $ … AND BUILDING LOYALTY IS ABOUT 3 THINGS TOO PURCHASE FREQUENCY AVERAGE SPEND BRAND ADVOCACY
17. DISCOUNT Receive immediate discount! POINTS Gathering points to be exchanged for products or services.! TIER LEVELS Gathering points to reach status levels.! WHAT ARE THE TOOLS AVAILABLE TO BUILD LOYALTY?
18. TIER LEVELS (THRESHOLDS) ALLOW TO ISOLATE AND REWARD THE MOST PROFITABLE CUSTOMERS
19. AMERICAN AIRLINES INTRODUCED A TIER LEVEL PROGRAMME IN 1981 THE ORIGIN
20. HOW MANY LOYALTY CARDS DO YOU HAVE? HOW MANY DO YOU USE? DO THEY IMPACT YOUR BRAND LOYALTY? FOOD FOR THOUGHTS  
21. ALL MAJOR HOTEL BRANDS HAVE BUILT GIANT POINT BASED LOYALTY PROGRAMMES
22. BUT LOYALTY PROGRAMMES ARE EXPENSIVE TO SET UP AND TO OPERATE SO, WHAT OPTIONS DO INDEPENDENT HOTELS HAVE?
23. MANY AFFILIATIONS OFFER LOYALTY SCHEMES TO INDEPENDENT HOTELS
24. THE MORE POINTS ISSUED, THE MORE LIABILITIES ON THE BALANCE SHEET FINANCIAL IMPLICATIONS OF LOYALTY PROGRAMMES  
25. - ! 200,000 ! 400,000 ! 600,000 ! 800,000 ! 1,000,000 ! 1,200,000 ! Millions! Source:  Lars  Meyer-­‐Waarden,  2012     THE AMOUNT OF AIRLINE MILES ISSUED IS BIGGER THAN THE NUMBER OF EURO BILLS Miles  issued  vs  Selected  countries’  GDP  
26. 30% Source:  DeloiIe,  2013  and  Lars  Meyer-­‐Waarden,  2012     of hotel loyalty members are “at risk” of switching their preferred brand.! 50% of hotel loyalty members’ annual hotel spend is not with their preferred brand.! 60% of managers consider their CRM strategy unsuccessful.! 90% of companies believe their loyalty programme lacks differentiation.! DESPITE HUGE INVESTMENTS MADE, LOYALTY PROGRAMMES ARE NOT FULLY DELIVERING
27. SATISFACTION! BEHAVIOURAL LOYALTY! -! +! +! -! Hotel stay for a honey moon! Holiday resort visited yearly! ! ! Restaurant in airport/highway! ! Business hotel booked by employer/client! The actions toward a service (frequency of purchase, average spent etc.)! The feelings towards a service (willingness to recommend)! SATISFACTION VS BEHAVIOUR A TRUE LOYAL CUSTOMER BUYS A LOT, OFTEN AND IS HAPPY ABOUT IT
28. BEHAVIORAL LOYALTY à   ATTITUDINAL LOYALTY THE CHALLENGE WITH CUSTOMER LOYALTY Moving from behavioural to attitudinal loyalty! Frequency of purchase! Recency of purchase! Average spending! Brand intimacy! Brand advocacy! Reduced price sensitivity! High emotional switching costs!
29. BREEDING LOYALTY THROUGH DIGITAL The rise of digital marketing led to an increase of customer touch points!
30. SOCIAL MEDIA, BLOG AND ONLINE STORE CAN INCREASE CUSTOMER INTIMACY. Instagram menu by Comodo restaurant in NYC! The blog from the Standard Hotel, NYC! Four Seasons’ gastronomy map on Pinterest! W Hotel online store!
31. APPS CAN ENHANCE THE CUSTOMER EXPERIENCE Marriott developed a mobile app that permits guests to make ‘in-meeting’ requests such as coffee refills and room temperature changes.! W Hotel launched an app that offers exclusive DJ mixes. The idea is to “bring a part of W hotel” back home.! Intercontinental created an app that allows guests to browse hotels and obtain local information about destinations.!
32. LOYALTY PROGRAMME 3.0 The combination of gamification, digital marketing and social circles have the potential to radically change the way loyalty programmes operate.!
33. IS PEER MARKETING THE FUTURE OF LOYALTY PROGRAMME? Using information from social media circles, loyalty programmes could become more personalised and addictive.!
34. COULD LOYALTY PROGRAMMES BECOME THE ULTIMATE REAL LIFE GAME? GAME DESIGN LOYALTY PROGRAMME BEHAVIOURAL ECONOMICS GAMIFICATION  
35. GAME = LUXURY? FOOD FOR THOUGHT Gamification is a powerful way to create behavioral loyalty. But is it appropriate for luxury products and services?!
36. DESIGN THINKING TOOLS To add value, loyalty programmes must get “personal” with their customers. Design thinking tools such as personas and journey mapping allows to build empathy.!
37. PERSONAS Personas allow you to build empathy with different customer segments.! The business traveller! The young traveller! The senior traveller!
38. Customer journey mapping allows to identify all the digital touch points impacting customer loyalty ! CUSTOMER JOURNEY MAPPING
39. 5 PRINCIPLES TO BUILD LOYALTY
40. 1. STAY ON BRAND Don’t be everything to everybody. Be consistent with your brand core values. !
41. 2. BE SOCIAL Leverage online social circles to foster competitive behaviour as well as a sense of belonging.!
42. 3. PLAY YOUR PART Use game mechanics to engage customers and give them goals to achieve.!
43. 4. KEEP MOVING Business got mobile and your loyalty programme should to.!
44. .5. THINK DIFFERENT Forget the copycat approach when trying to be different. !
45. The loyalty rate isn't that high. I could have a big hit, then put out the next single, and they say, Oh yeah, who are you? Prove it again. Lenny Kravitz   IN SUMMARY
46. WANT TO KNOW MORE? youri@bridge-over.com bridge-over.com A boutique consultancy valued for its entrepreneurial way of thinking, Bridge.over approaches each opportunity anew by providing tailored solutions for small and global businesses from London to Dubai to Beijing.! ! Bridge.over has worked on more than 50 projects in 4 continents covering more than 25 countries. !