How to build the perfect loyalty program for your hotel in 5 steps

Loyalty programs are relevant for hotels because they are created to meet their specific needs. To achieve the goals of a loyalty program, it is necessary to consider how it will be built and determine the indicators by which its effectiveness can be monitored.

Step 1: Define the goal

The goals of a loyalty program can be very different. For example, it can be to increase the percentage of returning guests or to increase revenue from the sale of additional services. Therefore, the structure of a loyalty program will depend on those specific goals.

Currently, there is a trend for categorizing guests, and depending on these, it is possible to build different loyalty programs. In TNG Loyalty, it is possible to set up two or three loyalty programs simultaneously but made according to different rules. For example, it is better to provide corporate clients with privileges rather than discounts, and then they will return more often. If we talk about weekend guests, they will be more interested in bonuses for additional services. Research shows that the VIP segment of guests is more interested in privileges in the loyalty program, while offers with discounts work better for the budget segment.

Step 2: Spell out clear rules

The loyalty program can be built further depending on the hotel’s target audience and the category of guests who stay there. It is important to define clear, understandable, and transparent rules. If the rules are too complicated, then the loyalty program will not be effective.

The rules should be shown on the website so guests can familiarize themselves. It is also important that the staff have all the information about the loyalty program and can explain to guests at check-in what the rules of joining the program are, how to move to a certain level, and how it is based on guest’s spending in the restaurant, on accommodation, additional services, and the number of nights stayed.

Gamification works well here: some hotels turn the collection and use of points into a game, thus engaging guests.

Step 3: Define a metric to measure program effectiveness

Once the goals are spelled out, the effectiveness of a loyalty program becomes immediately apparent from the reports and metrics generated.

Together with the client, we write down the terms of reference for what reports and metrics should be visible. We have very clear dashboards (information panels in the form of graphs and charts) on loyalty, where you can clearly see the metrics on the number of guests involved in the program and how often they use discounts and bonuses.

Step 4: Make available for guests

The loyalty program should be available when booking on the site so the guest can secure his room at a special rate that is appropriate to his loyalty program level. It is also effective to write your application in a way that attracts them to the loyalty program. In general, the guest should have several options when it comes to privileges.

Multichannel is important; information about the loyalty program should be visible to the guest at every interaction point: stored at the counter, displayed on media screens in the hotel lobbies, on the website, and in the rooms.

Step 5: Track effectiveness

This last step is important because it tracks the effectiveness of the loyalty program by measuring guest opinion. The check-out questionnaire measures guest satisfaction; it can also track requests for additional services and consider adding them to the loyalty program. This encourages guests to feel they are being listened to, as Hilton did when they added pet-friendly services to their loyalty program.

By following this short list of instructions, you can make your loyalty program effective and increase the number of guests returning to your hotel.

Maxim Bulygin

TNG Product Manager