Does your loyalty program promote loyalty?

While your initial response may very well be “of course it does”, I encourage you to give this question more thought.

If yours is like most hotels, chances are your loyalty program focuses on the accumulation and redemption of points. Accrue points in return for free or discounted rooms. But do reward programs such as these drive loyalty?

Many marketers mistakenly equate loyalty with rewards. Loyalty, however, denotes advocacy and commitment, not a points-based reward scheme. This belief is supported by the June 2010 Cornell Hospitality Report which contends that loyalty programs focusing on price-oriented rewards actually encourage more comparison shopping as customers seek out the most profitable loyalty program benefit. The points system, says the report, promotes loyalty to the best offer, not loyalty to the brand.

The most effective loyalty programs are an integrated part of an overall loyalty marketing strategy that is aimed at fostering a deep, emotional connection between the customer and the brand. This type of connection is not derived from points-based discounts or repeat purchases; it comes from continuous positive experiences with a brand. Effective programs are also considerate and developed in a manner conducive to ...