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Customer recognition: a quest for the multi-segment and global grail

What hotel group today does not back its marketing strategy with a loyalty program worthy of this name? Examples where they do not exist are rare and are almost exclusively in the luxury hotel segment. Probably because customer recognition is part of the DNA of their brands and anyone who goes through the doors of their properties is a VIP like the others, Four Seasons, Mandarin Oriental, Peninsula, Aman Resorts do not have established programs. But this does not mean there is a complete absence of any loyalty policy … In the Dorchester Collection, the Plaza Athénée pushes the precision of its customer relations to ano­ther degree with its CRM VIC (Very Important Children) program. A personal loyalty card, a dedicated website: at the Plaza, children are VIPs just like their pa­rents!

Experience and recognition: is this not the grail sought after by all the loyalty pro­grams? In any case, it seems to be where Starwood is headed with the loyalty pro­gram it is developing, which is in the pilot phase and still top secret… at least until the blog Hotel Check In from USA Today re­veals it. According to information from the American daily, this program should ope­rate on the fringes of the group’s program SPG. Originality: a single contact, an Ambassador, that will act as a relay for se­lect members, from both within and wi­thout the Starwood sphere. Other observers consider this a bit of a rerun since the American group launched a similar initiative in 2009. “Our goal is to create outstanding indivi­dual experiences for customers with a high added value,” admitted Mark Vondrasek, senior VP interactive marketing and loyalty for the group, to the American magazine. A real scoop or just the extension of a program in the pilot phase? One thing is certain: parti­cipation clearly includes competitors’ card carriers. The battle to gain loyalty is not over yet…Aside from these exceptions, the effort to pamper the best customers goes well beyond the top 20 worldwide. The Ukrainian group Premier Hotels, with 7 ho­tels in its country, is among the last to have done this. It isn’t even necessary to have a large portfolio to start. In Vietnam, in Ho Chi Minh City, the luxurious independent Caravelle Hotel developed its Heritage Club alone to offer benefits to its members (–10% on F&B, late check out, etc.) in addi­tion to points to be spent either at the pro­perty or in one of another ten upscale ho­tels in the country. Anything goes when it comes to pampering the best clients… in­cluding rewarding the loyalty of canine tra­velers! The R&R Club, by the American full service brand Red Lion, thus offers 500 bo­nus points for pets. Such generosity is not disinterested because the group is betting that with the crisis, clients will travel closer to home, by car and with the entire family.Of course, these programs are far from reaching the size of those of Anglo Saxon leaders (see table on the following pages). Their strength: a multi-brand offer and a global presence that makes it possible to collect and spend points very easily. The pioneer Priority Club by IHG, is thus clo­sing in on 50 million members. HHonors has just surpassed 25 million whereas Marriott Rewards rose above 30 million. And the benchmark of 10 million is in sight for Choice Hotels International. When it regained control over its continental master franchises, the American group expanded its program to all geographic areas, in Europe two years ago and more recently the Asia-Pacific.Laurence Deblonde-Buisson, marketing and communications director of the subsi­diary Choice Hotels Europe approves of this shift into high gear: “previously, we had the program ‘winning sleep’«dormez ga­gnant», an obsolete system with a paper card that the hotel put a sticker on each stay. Ten stickers were worth a free night. This program cohabitated with Choice Privileges but was not linked to it. The only obligation was to allow members of the American program to use their points in our hotels.” The change is significant for the franchi­sor’s marketing teams, which have a very large global database to support their sales efforts as well as for the development teams that underline its ability to reach 9.5 million members to seduce independent hoteliers.Accor has also honored loyalty. The group has already offered several solutions –the Accor Favourite Guest subscription for bu­siness travelers, the free and the very French concept Accor Mouvango in a partnership with travel-related businesses (Total, Courtepaille)– to allow occasional clients to accelerate the collection of points, and, fi­nally, the free single-brand loyalty program Sofitel Privilege. But in September 2008, the French group totally revised its strategy with the launch of the program A|Club which is free and multi-brand. “Hotels needed a strong, international program to face their compe­titors,” explains Cédric Gobillard, senior vice president direct sales and loyalty for the group.Far from reaching maturity, A|Club should surpass 5 million members at the end of the year. “We are moving forward at a fast pace,” ad­mits Cédric Gobillard who expects convin­cing results from this new policy thanks in particular to the creation of a Customer Management division implemented to back this program. “We will thus be able to study our customers’ consumer habits through our different brands, their life cycles, their needs depending on whether their travel is for business or leisure, in or­der to make offers that meet their expectations even better,” rejoices the group’s loyalty manager.A much promoted asset, A|Club covers all the categories, from luxury to economy. Vis-à-vis a protean clientele, it is an advan­tage to have a brand portfolio like Ibis at Accor, Holiday Inn Express chez IHG, Hampton Inn chez Hilton, Comfort at Choice or many brands at Wyndham. Groups with transversal programs will soon be joined by the Groupe du Louvre. Thanks to its partnership with Golden Tulip, the hotelier began global consideration of the launch of a shared program for the begin­ning 2011. “First we are looking for a transversal vision of our clientele and today we are working on a shared back office from which we will be able to develop a new system that creates synergies,” des­cribes Raphaëlle Bègue, the group’s marke­ting director in charge of customer rela­tions. In the meantime, the two existing programs - HelHo at Louvre Hotels and Flavours at Golden Tulip – continue along their ways.The existing loyalty development programs on the 0-2* segments are usually basic with very clear benefits for business clientele with mostly domestic destinations. Of course, loyalty cannot be bought, but it may always be exchanged for hard cash … Among the initiatives implemented by the major players, the chain Americas Best Value Inn offers a 15% reduction on the rack rate upon presentation of the Value Club card. Those who acquire the Toyoko Inn Club Card, are offered a free night every ten stays and weekend discounts at the Japanese Toyoko Inn. Premier Inn and Travelodge boast the benefits of their Business Account cards for British busi­nessmen.In France, B&B Hotels launched its subs­cription program “e-club”. Members enjoy many advantages: a systematic 10% dis­count on the room price, guaranteed reser­vation up to 3 days prior to arrival and a 10% discount in 800 restaurant-partners, compensating for the lack of restaurants at the properties themselves. With this new strategy, the group Accor has not totally abandoned its paid program. Its A/Club Favorite Guest card is primarily for trave­ling managers of SMEs. “They are interested in a reduced bill as well as in the guarantee of being able to find a room in peak seasons, even if they decide to travel last minute. Late check-out is inte­resting for these clients who are traveling more and more and work in their room,” remarks Cédric Gobillard.While economy clientele are looking for functionality and direct advantages first and foremost, upscale clientele want recognition and personalization. Elite status, present in most programs, offers these “soft benefits” that are highly appreciated by big travelers. Welcome gifts, systematic upgrades, execu­tive clubs, VIP check-in: all these elements cleverly flatter the egos of loyal road war­riors and bring added value able to influence their choice. These benefits combine with other more functional advantages such as the possibility of late check-outs, room availability up to the last minute and early arrivals. These elite statuses even take care of themselves since these VIP members earn more points with each stay. Within the A/Club, Gold card members receive 75% more points while platinum members re­ceive 100% more points.Contrary to global hotel leaders, groups po­sitioned exclusively on the upscale segment cannot play on a global presence. And yet, concentrating the attention of its best clients in a divided and increasingly compe­titive universe is not considered any less crucial. This is true for the resort segment where stays are less frequent. In 2009 Club Med relaunched a new loyalty program wi­thin its strategy to join a higher segment in order to identify and reward its best clients. After implementing three statutory levels based on the number of stays and spending in the last three years, the program will be­gin a new phase this year that will be based on the program’s organization before and after the stay.For several years, backed by a large network on a domestic level and launched as part of a strategy to expand worldwide, Shangri La with the Golden Circle and Taj with its Inner Circle offer businessmen programs that are as groomed as these worldwide lea­ders. More international, the Canadian brand Fairmont launched its President’s Club in 2000 with a goal of 15% annual growth. But in loyalty development, strength may be found in numbers. This is even the raison d’être of the Global Hotel Alliance (GHA), the consolidation –mode­led by Kempinski after airline alliances– of several mid-size luxury groups with regional influence (Anantara, First, Kempinski, Leela, Mirvac, Marco Polo, Omni, Pan Pacific, Parkroyal, The Doyle Collection and Tivoli).GHA has just announced the spring launch of the multi-brand program GHA Discovery. Until now, each group had its own policy and, eventually, links between the programs. But, after five years of work, GHA completed its implementation of a shared CRM system, especially designed with Micros Fidelio. Christopher Hartley, CEO of GHA, counts on this technological progress to make the recognition of the best clients widespread throughout 300 ho­tels in the alliance: “Anyone can launch a loyalty program. But if you don’t recognize the client at check-in, or if you don’t know their preferences, then you’ve missed the first hurdle.”This program especially stands out in terms of how it operates. If the members of GHA Discovery were credited airline miles in thanks for their stay, the compensation available to these clients will be in the form of 2,000 “local experiences”, privileged mo­ments for the happy few such as a safari with a National Geographic photographer who gives advice on how to take the best photos, backstage concerts …

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