Loyalty programs: is it worth the effort?

11 min reading time

Published on 05/06/14 - Updated on 17/03/22

While the goal of any company is to gain new clientele, developing the loyalty of existing clients should have an even more efficient and refined strategy since it costs five to six times less than gaining a new client. But what really lies behind the notion of loyalty that, in the hotel world, is mostly closely related to the implementation of a rewards program? Is it truly a panacea for operational marketing fed by a catalogue of personal advantages? Is loyalty truly anchored in these program’s users? Is the cost of advantages granted correctly appreciated and fairly distributed? All these questions are often sidestepped to only highlight the importance of the number of members or share of regular clients directed towards the properties because of loyalty programs. Isn’t it time to ask once again how efficient the current programs are with respect to their actual cost and the possible alternatives, especially better use of CRM?

With his book The Loyalty Effect, published in 1996, Frederick Reichheld, partner at an American strategy consulting firm, made a media buzz thanks to a few hard truths for companies. He observed that on average a publicly traded company loses half of its employees in four years, half of its clients...

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