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Loyaltycheck At Steigenberger Hotel Group: mastering the mechanisms of loyalty development

The jury of the 7th Hospitality Awards made no mistake: the loyalty program of the German hotel group Steigenberger is exemplary in more than one way, in particular because of its concern for creating a solid loyalty program that goes beyond the simple notion of recognizing and rewarding. The program succeeded in winning the Trophy for the best initiative because of its approach using several complementary phases.

The program’s philosophy could be summarized as follows: customer satisfaction is only half the work, the other is ensuring their return. The notion of loyalty development thus lies at the heart of the approach. Since the beginning of 2006, Steigenberger Hotel Group has implemented an analysis and evaluation tool that stands out for its extreme rigor and attention to detail.LoyaltyCheck is also a powerful alignment vector for the group because it harmonizes the actions and establishes a very clear direction for all its employees, in all the divisions and the headquarters. In addition to rapidly proving itself, this approach is an integral part of Steigenberger’s global philosophy, which is summarized by its signature: “A step for excellence”.A simple observation lies behind it: the role of the client, his behavior and expectations in terms of service have radically changed in recent years. Understanding the new criteria is thus vital, analyzing them precisely and objectively is fundamental. The LoyaltyCheck program is built around three major axes: appreciation of the stay, recommendation and eventually renewed reservation. In this regard it is right in line with the most modern loyalty development methods that consider the phenomenon the positive combination of several elements that are cognitive, emotional and “conative” (meaning they rely on mechanisms of will). This translates as a “attitude theory”. Satisfaction is thus not the only factor in the equation that encourages brand loyalty and repeat reservations.This is why LoyaltyCheck asks three questions in particular:-“Did you enjoy your stay overall?”: the answer to this question lies in rational elements and a way of thinking that weighs the pros against the cons. - “Would you recommend our hotel to your friends and acquaintances?”: the emotional enters into play together with the desire to share the pleasure. This data is increasingly important today. -“What is the probability that you will make another room reservation in this or another Steigenberger hotel?”: the conative element takes direct aim at the customer’s concrete intentions.The degree of acquired loyalty is then measured based on the answers to the questionnaire, then analyzed, dissected and weighed against different socio-demographic notions. Because the clientele is not seen as a single block, but as an aggregate of different populations that do not necessarily have the same priorities. The questionnaires are clear and visually attractive. They make it possible to evaluate guests’ level of satisfaction at the end of their stay and to identify eventual causes of deception or annoyance. But this is not the program’s point of departure. Starting with this identification, LoyaltyCheck attempts to make him come back. The results of this ongoing study are analyzed by a market studies and management consulting expert: Dr. Eisele & Dr. Noll GmbH. They are then recorded and centralized in an online platform. Each unit of the brand may access it at any given moment.Monthly reports are written based on the responses and are broken down into six major chapters. The Executive summary offers the hotel’s overall results at a glance. It uses many arrows, key figures and color coding to highlight the most important points, the major trends and the scores of the current month with respect to the previous month. Next is the chapter that analyzes “the key factors that determine loyalty”. Then all the “socio-demographic parameters” are reviewed: from the reason for the stay to the visitor’s profile as well as the number of nights consumed in the hotel. The following chapter concerns “complaints, commentaries and the overall impression they produce”: clientele express their opinion in their own words. This data is then entered manually, to be analyzed based on what is said and then on how it is said. Results are ranked in a table with no fewer than 250 categories. “Analysis over time” allows the hotel to examine change over months and years, in both an absolute manner and with respect to the overall trend of Steigenberger’s inventory. Finally “typology of clientele” divides guests into four major groups:• “vested clients”, content with their stay and interested in returning,• “variety seekers”, satisfied but still tempted to see what the competition offers,•“vested clients, but not by choice”, that is not truly satisfied, but who will return mostly because there is a contract between their company and the chain,• and the “defectors”, disappointed with their stay and have no intention of repeating the experience.Moreover, by shifting from a scale of 1 to 5 to a scale of 1 to 100, the criticism is significantly more precise, more nuanced with 1 corresponding to: “not satisfied at all, very discontent” and 100 to: “very satisfied”. Between the two extremes, the range of intermediate opinions is thus very broad with respect to a classic 1 to 5 scale! This also makes it easier to implement goals and ranges to reach. So much so that a special algorithm was created to make the evaluation even more pertinent. Steigenberger interprets the scores as follows:• below 74 points, customer satisfaction is mediocre and requires urgent and significant improvement;• from 75 to 84 points, satisfaction is average: specific measures must be implemented.• From 85 to 100 points, satisfaction ranges from “good” to “full”: no changes are necessary but a level of quality must be preserved.While the evaluation is rife with information and steps to be taken, its presentation is optimized to achieve maximum clarity. The key points stand out clearly for each part. The instrument thus appears ideal for underlining the hotel’s strong points and weaknesses, and taking action as a result. But LoyaltyCheck goes even further...The rate of satisfaction is not all that is being dissected here: so is the importance of each element of the stay that contributes to the client’s overall criticism. In other terms: what is the good or bad memory that most significantly determines the overall impression? What had the most influence over the client’s final opinion? reception? breakfast? room? security? wellness equipment?... and in the room: the decor? the bed? cleanliness of the bathroom? For the managers, it is a precious tool because it informs them, not by intuition but by concrete figures, what the true strong and weak points of their property are, and their relative importance with respect to one another.The impact of this entire procedure on brand loyalty is carefully examined using the Lisrel method, a mathematical procedure of statistical analysis specially developed for the brand. It makes it possible to extract the most subtle and the most complex cause-effect relations, thereby further refining Steigenberger’s understanding of its assets and weaknesses. Goal: understand the repercussions of each element on the loyalty of travelers.LoyaltyCheck is also a powerful alignment vector for the group because it harmonizes the actions and establishes a very clear direction for all its employees, in all the divisions and the headquarters. In addition to rapidly proving itself, this approach is an integral part of Steigenberger’s global philosophy, which is summarized by its signature: “A step for excellence”.

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