A loyalty programme is a must for modern businesses because the wide range of goods and services has changed customer behaviour. This is particularly noticeable in the hotel industry. In Paris alone, the number of hotels, guesthouses, and hostels exceeds 1500. And how can they find and keep their customers? For this reason, hoteliers are introducing a loyalty programme. This has several important advantages for both the guests and the entrepreneur.
Today, it is believed that the first loyalty programmes emerged around 100 years ago, when economics began to develop into a science and people learned to combine mathematics and psychology in sales. However, if you delve deeper into history, you will find that salespeople introduced loyalty programs for regular customers hundreds or even thousands of years ago. In modern business, however, this has become a separate direction that has been optimized and automated.
Today, it is believed that the first loyalty programmes emerged around 100 years ago, when economics began to develop into a science and people learned to combine mathematics and psychology in sales. However, if you delve deeper into history, you will find that salespeople introduced loyalty programs for regular customers hundreds or even thousands of years ago. In modern business, however, this has become a separate direction that has been optimized and automated.
How a Loyalty Programme (LP) Works
Never heard of a loyalty programme and want to understand what it is? Let us take a look together at how you can set up a loyalty programme and how it works in principle.
A loyalty programme is developed on the basis of a hotel's CRM. However, not all standard programmes of this type are tailored to the objectives of a specific company. To this end, many hoteliers use additional applications, such as Hoop, which allow them to create their own unique loyalty programs without complicated and expensive programming.
To get bonuses, each user receives a personal account or discount card (with a number linked to personal data). A customer base is formed within the CRM, which collects not only contacts but also the most accurate information about each customer.
Important elements of the LP are:
All these points are listed from the customer's point of view. But what does the entrepreneur get?
A loyalty programme is developed on the basis of a hotel's CRM. However, not all standard programmes of this type are tailored to the objectives of a specific company. To this end, many hoteliers use additional applications, such as Hoop, which allow them to create their own unique loyalty programs without complicated and expensive programming.
To get bonuses, each user receives a personal account or discount card (with a number linked to personal data). A customer base is formed within the CRM, which collects not only contacts but also the most accurate information about each customer.
Important elements of the LP are:
- The visual part of the personal account on the hotel's website or mobile app
- Showcase with discounts and special offers
- Regular newsletter
- Personalized offers for regular customers
- Welcome bonuses for new members of the programme
- Order history of each customer
- Possibility to exchange bonuses or points for goods and services
All these points are listed from the customer's point of view. But what does the entrepreneur get?
- A customer base that is built up in a convenient way
- A simple and clear way of analysing the customer base
- An automated system for creating discounts and promotions
- An automated system for newsletters and notifications
- An application for implementing marketing solutions
- Ready-made tools to increase loyalty and sales
Aims and Purposes of the Loyalty Programme
To understand the principle of LP, let us describe one of the most important terms in this direction – brand loyalty. This refers to the customer's loyalty to the product/company/service they have chosen and their constant return to the same hotel (in our case). The main tasks of a loyalty programme can therefore be summarized as follows:
LP is a constant interaction with the customer. It creates its own profile within the hotel app, accesses contacts, and even social media profiles of the customer. The richness of this information allows you to literally study potential customers and build marketing that takes into account all the needs of your target group.
It turns out that a hotel discount scheme is not just beneficial for travellers or business travellers – it's a treasure trove for optimising and expanding business, improving service, increasing sales, and boosting the hotel's overall profits.
- Customer acquisition
- Customer retention
- Sales promotion
- Customer learning
LP is a constant interaction with the customer. It creates its own profile within the hotel app, accesses contacts, and even social media profiles of the customer. The richness of this information allows you to literally study potential customers and build marketing that takes into account all the needs of your target group.
It turns out that a hotel discount scheme is not just beneficial for travellers or business travellers – it's a treasure trove for optimising and expanding business, improving service, increasing sales, and boosting the hotel's overall profits.
Types of Loyalty Programmes
Loyalty programmes are a way of attracting and retaining customers through a loyal pricing policy and special "gifts" for guests. But what is a loyalty programme from a financial point of view? After all, every business should evaluate its activity not by the number of customers it attracts, but by the profit it brings in the end.
Promoting sales with the help of LP can be focused on different types of contact with the customer. In this context, there are several types of loyalty programs:
But how do you know which LP is right for you? Let us look at each of the types individually.
Promoting sales with the help of LP can be focused on different types of contact with the customer. In this context, there are several types of loyalty programs:
- Discount
- Accumulative or bonus system
- Paid or privileged
- Partner
- Non-commercial
But how do you know which LP is right for you? Let us look at each of the types individually.
Discount Programme
The simplest version of a loyalty programme, where the customer receives a named or numbered (sometimes virtual) plastic card and a fixed discount on it. The discount can remain constant or increase when a certain threshold of purchases is reached. In the first case, the LP is single-level; in the second – multi-level.
Advantages:
Disadvantages:
Advantages:
- Simple and user-friendly
- Easy to design and implement
- Easy to change the discount percentage or remove high season discounts
- Easy to adapt to shop seasonality and sales forecast
- Intuitive sales incentives
Disadvantages:
- Based on lowering the price of a product/service
- Accustoms customers to constant discounts
- Reduces the value of the product/service
- Reduces the sales margin
Points or Rewards Programme
An interesting way to get in touch with the target audience. A customer can receive discounts or points for purchases as well as for holidays and new hotel offers when they reach a certain number of purchases or receive a new status.
Advantages:
Disadvantages:
Advantages:
- Interesting and beneficial for the user
- Offers the possibility of varying discounts and bonuses
- Entices the customer to play a kind of "game" – a race for a discount or status
- Increases loyalty through holiday gifts
- Allows you to categorize customers within your customer base according to their spending level
Disadvantages:
- Complex structure and implementation
- You need to issue/re-issue discount cards
- Elaboration of statuses and conditions for each status
- Requires staff training in the use of LP
Membership or Subscription Programme
This type of LP is about paying for privileged participation in a closed club that includes additional services or special pricing on goods and services.
Advantages:
Disadvantages:
Advantages:
- Interesting and advantageous for the customer
- Offers the possibility to vary discounts and bonuses
- Generates recurring revenue from membership fees
- Creates a "special" customer status
- Increases the service level of the hotel (associations with VIP)
Disadvantages:
- Development of a separate price list for club membership
- Requirement to issue/re-issue discount cards
- Requires staff to be trained to work with LP
Partner Programme
This is an interaction between the hotel and other companies or shops where discounts and bonuses under the programme apply to the services of all participants. This means that the customer can use the accumulated bonuses to pay at any partner.
Advantages:
Disadvantages:
Advantages:
- Interaction with the partners
- Expansion of the customer base at the expense of the partners
- Discount variations
- Support from partners
Disadvantages:
- Difficult to predict profits
- Need for detailed programme design
- Requires staff training on LP
Charity Programme
A type of interaction with the customer in which material values take a back seat. The purpose of such a LP is to create a positive image of the hotel or establishment and to unite the customer and the company through shared moral values.
Advantages:
Disadvantages:
Advantages:
- Positive image of the hotel
- Social relevance
- Attracting new customers through a high level of social responsibility
Disadvantages:
- Lack of profit
- Cost of developing and implementing LP
- Requires staff training to work with LP
Hoop Loyalty Programme
Hoop is a universal application for hotel CRMs. The programme is a ready-made solution that significantly extends the functionality and possibilities of standard management and automation systems.
Hoop is used by large hotels and hotel complexes to set up their own loyalty programmes as quickly and easily as possible. The programme is adapted to different user levels and allows you to perform most integrations intuitively. At the same time, working with Hoop allows you to:
With Hoop, you can increase the efficiency of your company and boost business performance.
Hoop is used by large hotels and hotel complexes to set up their own loyalty programmes as quickly and easily as possible. The programme is adapted to different user levels and allows you to perform most integrations intuitively. At the same time, working with Hoop allows you to:
- Attract and retain more customers through bonus programmes and cashback
- Inform potential customers and hotel guests about new products and services in a timely manner
- Increase revenue not only through direct sales, but also increase the average check through additional services and products
- Attract partners to work with hotels on the most transparent and favourable terms for both parties
- Increase the hotel's reputation with both partners and guests
With Hoop, you can increase the efficiency of your company and boost business performance.
Evaluating the Effectiveness of a Customer Loyalty Programme
How to evaluate the effectiveness of a LP? You can hire an analyst or work with CRM yourself. With Hoop's features, however, you can solve this problem completely thanks to the "Analysis and Reports" module.
The system automatically generates all the necessary reports on the hotel and the loyalty programme in real time:
When you choose Hoop, you get an assistant. It helps you work on customer retention. It also helps you evaluate your business. It can predict, improve, and scale any process.
The system automatically generates all the necessary reports on the hotel and the loyalty programme in real time:
- The size of the audience captured in the LP
- Breakdown of the audience by interests
- Customer activity
- Analyses of customer acquisition channels
- Breakdown of statistics by individual hotel, status, and time period
When you choose Hoop, you get an assistant. It helps you work on customer retention. It also helps you evaluate your business. It can predict, improve, and scale any process.
