Getting Loyalty in Hospitality Right in 2020

Coffee shop loyalty
Contributor: Declan Hannon, Strategic Partnerships & AppStore Product Owner, Epos Now

2020 is set to be a big year for hospitality. With the rise in independent restaurants and food markets pushing chains into closing their doors, and the increased popularity in services such as Airbnb making traditional hotels work harder, the hospitality industry is collectively gathering its best tactics and strategies in order to survive.

In an ever-increasing competitive market, bar, hotel and restaurant owners are working hard to retain their existing customers; after all, acquiring new customers is five times more expensive than retaining loyal customers. But how can this be achieved? Furthermore, over 90% of consumers would be likely to sign up if their favourite fast food or fine dining restaurant started a loyalty programme. The hospitality sector certainly isn’t new to loyalty schemes, but is the sector currently maximising the power and potential of loyalty in hospitality?

Drivers of loyalty in hospitality

Acquiring customers is a big cost for hospitality businesses, so focusing on repeat business by encouraging loyalty in hospitality amongst existing customers is essential. However, consumers now expect all experiences and offers from hospitality businesses to be available digitally, so a simple scheme with a physical card that was issued many years ago won’t make the cut anymore. Loyalty schemes must therefore meet this expectation in order to stay current and above all, to ensure the scheme remains usable.

Hospitality businesses must utilise the technology now widely available and make the move from physical card to digital card; enabling the customer to quickly download the app to their phone, or integrating it with a larger loyalty app that enables the customer to have multiple digital cards in a single location. In fact, research shows that 52% of millennials want to use their mobile devices to take advantage of loyalty programmes offered by restaurants, bars and coffee shops. With a multi-channel strategy, customers can quickly access the number of points they need for their next free coffee, whilst at the same time ordering their cappuccino before they even step foot into the coffee shop.

In the same way, customers can be enticed with money off their next hotel stay for leaving a review, at the same time as checking in for their business trip next week. All of this, seamlessly, from one device, leaving the customer safe in the knowledge that they can get everything they need in one place.

An increasing appetite for loyalty in hospitality

Whilst other sectors such as retail have had a big focus on loyalty for some time, the hospitality sector is still learning about the importance of retaining customers. Customer experience plays a big role, with customers tending to repeat hotel stays or meals out at restaurants if they had a memorable and enjoyable experience on their first visit.

However, the importance of loyalty in the hospitality sector still can’t be underestimated. Every scheme must incentivise a customer to come back, but loyalty cannot replace a good brand, only supplement it. The balance must be right between giving the customer a reason to support the brand, but also to return to the hotel or restaurant time and again. The hospitality businesses with the strongest loyalty schemes will be streaks ahead in the loyalty race.

Contributor: Declan Hannon, Strategic Partnerships & AppStore Product Owner, Epos Now
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