How to implement a Customer Loyalty program

Loyalty programs were introduced by the airlines in US to combat decline in sales way back in 1970’s.

This helped the airlines to attract and retain customers and steal market share. Slowly all the competitors followed suit and all of them had their own loyalty programs. Soon the hotels around the world implemented them and now the biggest chains have their own versions of extremely popular loyalty programs.

In order to survive in the market as a standalone player or a small chain you have to ask yourself if your business can sustain itself in the future in face of these growing hotel chains. It is always important to plan ahead and make sure that you stay ahead.

In case you have an existing loyalty membership, great… You need to ask yourself how it is working for you. Does it really make you money or you are losing money in the deal. If you don’t have, consider at least opening a program for your food and beverage outlets so that you gain some loyal guests who will frequent your business.
I am sure you would have heard about the various loyalty programs in various business and might be wondering how to implement them.
All membership programs work by collecting guest data – phone or email to track their spending habits and gently nudge them to spend even more. Members get points or rewards in the form of cashback which encourage them to keep using the brand.

The easiest form of a loyalty program is a form of a punch card or stamp card which is used by cafes where you buy 4 coffee, they punch the card and then the 5th coffee is free for example. But this sort of a program can easily become a discount program and can stop working for you.

Other type of programs

Most of the room reward program like the Marriott Rewards or the Hilton honours offer points for every rupee spent in the hotel. Usually they offer 3 points for every USD equivalent. Then this point can be used to redeem for a variety of rewards. These points and stays also help build up tiers to they graduate to gold and platinum members with various perks. It is a very simple program and a good software to manage the points can help you implement this program.

Food and beverage programs

Many hotels introduce a food and beverage program where you pay in advance to get offers from their restaurants. The leaders in the program are Taj Inner circle or Club Marriott. Usually they charge a joining fee. After that they offer discounts and various vouchers to redeem. In case you implement this program, you get an instant boost of cash in the beginning. Also since guest have already paid for the membership, they are more inclined to use your restaurants

Work with other brands

One very strong way to create a loyalty program is to partner with a credit card or bank who offer discount based offers for their customers. This has a mutual benefit but for you to really benefit from the program, you need to collect guest information of those who come to your restaurant so that you can communicate with them in the future. So for example if you partner with Citibank for their restaurant program, you offer a discount to their client when they use your restaurant. This is a very powerful way to gain loyalty especially if you are just starting out.

In conclusion creating a loyalty program is a great way to increase sales for your company by bring repeat business. Try to keep it simple at first but also exciting enough for your guests to sign up for the program

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