Article#1: NEW LOYALTY STRATEGIES
By George Koroneos
http://www.htmagazine.com/ME2/dirmod.asp?sid=&nm=&type=MultiPublishing&mod=PublishingTitles&mid=3E19674330734FF1BBDA3D67B50C82F1&tier=4&id=32BFFF5D7A1648F7AEC89AD3B94593A3
The article “New Loyal Strategies” by George Koroneos, deals with the abundant amount of companies who offer rewards programs/loyalty memberships today. According to the article, Americans subscribe to over 1.3 billion loyalty memberships (Koroneos, 2008). Many may look at that statistic and wonder why companies offer so many discounts to customers via rewards programs.
According to the article, the answer is simple; rewards programs are put into place especially at restaurants in order for the operators to be aware of pertinent customer information. Some pertinent customer information according to the article may be “knowing what the guests favorite dishes are, how much money they spend in the establishment each month, their names, birthdays, and of course-their e-mail addresses.”(Koroneos, 2008) This is seemingly rather creepy, but utterly brilliant at the same time.
The article further discusses issues with rewards cards subscribers whose accounts remain idle. In the case of T&J Restaurants, when an account is idle, an e-mail with a personalized coupon will be sent to the idle rewards card holder. In another instance if a customer has a bad experience i.e. food being sent back an e-mail is sent with a coupon in hopes of rekindling the relationship between T&J Restaurants and its customer. This all says a great deal about the benefits of rewards programs.
This article was informative and makes sense. It is wise for companies most especially restaurants to put loyalty/rewards programs like these into place. It focuses on a theme that is tossed around often in today’s society, “lifetime value of a customer.” The information that is obtained by handing out these rewards programs cards seem to be rather beneficial in personalization each customer’s experience. In hospitality, the goal is to always exceed the customer’s expectations and having valuable information about customer’s may do just that.
I was more astonished at the fact that certain restaurants actually e-mail customers who have had a negative experience and provide them with a coupon. This is also a very smart and courteous business move that once again, focuses on the lifetime value of a customer.
The personalization of guest’s experience is so easily captured when a company is able to obtain direct records of buyer behavior. This is a very basic “give a little and take a little” relationship. In essence, companies are giving occasional discounts to its rewards members in exchange for their valuable information, which will be beneficial to them in the long run. It will most likely not be long before every company no matter how big or small puts these programs into practice.
Source:
Koroneos, George. “NEW LOYALTY STRATEGIES”.<http://www.htmagazine.com/ME2/dirmod.asp?sid=&nm=&type=MultiPublishing&mod=PublishingTitles&mid=3E19674330734FF1BBDA3D67B50C82F1&tier=4&id=32BFFF5D7A1648F7AEC89AD3B94593A3>
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3 comments:
Dear Mark,
Rewards programs are inherently important in any hospitality industry, ergo I concurrently agree with your synopsis regarding the the article. It is important to point out, that it is increasingly essential for a firm or a business to maintain is customer brand loyalty, rewards for airlines, hotels, and restaurants are perfect systems to implement, Well done mark I look forward to enjoying more of you blogs
-Brett Giblin
It seems that guest loyalty programs have been around for many years, and I can definitely see why they would continue to grow and add new features. These tactics not only benefit the guest, but the company as well. By providing their customers with rewards such as coupons, free meals and rooms, etc., they gain loyalty and, as discussed in one class “share of the stomach” (meaning that this particular hotel/restaurant will come into a guest’s mind first when they are thinking of somewhere to stay or eat). As Mark had mentioned, this also leads to the lifetime value of a customer. For example, businesses are increasingly using small strategies to remind the guest that they are important to them and that they want them to continue to come in. Remembering favorite dishes, names, and table preferences are just a few ways to “wow” the guest. Technology advances are helping to make this happen to, such as servers using palm pilots to quickly enter certain guest information into the system, so that they can have it on file for the future. The only downside I see to these programs, are those that charge guests to be a part of them. Though the fee may be small, I feel that paying for their services to begin with should be enough.
I agree with you- loyalty programs are an excellent way to foster relationships with customers/guests. Knowing personal information about customers’ likes & dislikes helps create customized experiences and increases loyalty. This is critical for all service businesses, where there is so much competition that customers can easily have their needs fulfilled elsewhere. It is important to know your customer and make them feel appreciated by sending them discounts or emails apologizing for a bad experience. I have received birthday cards in the mail from the most random stores/restaurants, and even though it does seem a little weird, I appreciate the effort that the company has put into making me feel like a valued customer.
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