The spark to light up your hotel’s loyalty program.
Chapter 1
Exploring the Loyalty / Advocacy Link
The spark to light up your hotel loyalty program
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Loyalty vs. Advocacy
(Yes, there is a difference)
Loyalty programs have been around for a very long time. Even in the simplest sense, companies have been rewarding their most loyal customers for ages. Those rewards come in many forms and vary by industry, from collecting stamps at grocery stores to packing on the airline miles to get to that coveted next tier.
But to understand how far we’ve traveled, we first need to understand where we started. For the sake of this exercise, I’m going to limit the scope to hospitality.
A short history of loyalty in hospitality
Airlines were the originators of what we know to be the modern travel loyalty programs. American Airlines was the first when it had the foresight to mine its customer data, keeping a keen eye out for any trends to emerge.
This was pre-email when the go-to way to connect with someone was via telephone. Just as email is today, land line phones were a necessity at the time.
AA cleverly began pairing reservations with telephone numbers—something they were only able to do because they had the best tech available at the time. (That’s a recurring theme we’ll explore further later.)
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Airlines were the originators of what we know to be the modern travel loyalty programs.
Other airlines were soon to follow, (more out of necessity than out of originality) but ultimately to the benefit of consumers. This trend is still alive today. (Think: checked bag fees, fuel surcharges, etc.)
Hotels tagged along as partners, unsure if this was a practice worth adopting or simply a passing marketing fad. Upon realizing it may be worth the effort, Holiday Inn and Marriott both launched their programs near the same time in the 1980s. Interestingly, the first hotel programs actually helped travelers earn airline credit, but this changed relatively early and free nights were added to the mix.
Over time, the other major hotel brands adopted their own programs and, more recently, independent hotels have either begun their own or joined a third-party program like Stash Rewards or The Guest Book. (Look for more on this in subsequent chapters).
What's changed
Initially, the goal of these programs was simple and straight-forward: create repeat business—it was all about bringing the guest back. Today, however, it’s evolved to be much more about understanding the guest and providing an experience that:
  1. exceeds expectations; and
  2. creates opportunities for meaningful engagement.
Loyalty programs have an obvious inherent marketing power, and there are loads of ways to approach putting that data to work. That shift couldn’t occur without great strides in the technical capabilities of the industry, a movement that’s gained massive momentum just within the past 5-10 years. More systems are integrated, more partnerships exist, and the entirety of the developed world has gone mobile.
The new loyalty
Large chains and branded properties have owned the business traveler since day one, but the business traveler is no longer the only frequent traveler. Guest demographics are far more segmented and segmentable thanks to the wonderful advances in technology we’ve already mentioned.
Even more recently, there’s been a movement towards more experiential travel. Guests have effectively said,
“You want more of my wallet? Give me a good reason to open it in the first place.”
So while everyone wants to bring the guest back, it’s far more about how you extend the invitation and less about a booked room. This has given independent hotels the opportunity to excel in the loyalty space.
Independent hotels are known to hang their hats on the unique experiences they create for their guests and so the environment we find ourselves in today is ripe for the next generation of loyalty programs.
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Recently, there’s been a movement towards more experiential travel.
The spark to reignite your loyalty program: advocacy
Shifting gears, let’s have a look at advocacy. The notion of consumer advocacy has arguably existed far longer than even the simplest loyalty programs. Know of a better watering hole? Let your fellow cave-dwellers know. There you go; consumer advocacy in its most basic form.
It’s the simple, undisputed notion that we trust the people we know, be they friend or family, better than those we don’t. What exactly is it that makes one watering hole better than another? That distinction matters, but not nearly as much as the fact that you trust the person giving you the reason. That’s advocacy.
It’s the simple, undisputed notion that we trust the people we know, be they a friend or family member, better than those we don’t.
Hospitality is a unique industry that’s positioned about as well as one could hope when it comes to advocacy. Well, hotels specifically, that is.
See, hotels are in the greatest position of power when it comes to creating incredible and memorable experiences for the traveling public. This starts even before your guest’s stay, when you’re reaching out to get them amped for their upcoming trip.
And it doesn’t matter what the trip is for. Travel in and of itself is an experience, and there’s a decent portion of it that isn’t super fun. (Flying? Yeah, not much need to elaborate there.) But the hotel, the destination, that’s what it’s all about. Once the guest arrives the real memory-making begins.
Shift in the industry: back to the experience
“Experiential travel” has seen its stock soar over the past several years.
As the millennial demographic has developed and their income has grown, so has their desire to step away and see what the world has to offer. This isn’t possible without a place to stay, presenting hotels with the opportunity to deliver on that expectation, or risk alienating a massive source of potential future guests.
Combine all of this with how easily we can communicate via social media and one could argue that advocacy is approaching its golden age.
What was once an idyllic image of the family gathered around the slide projector, has been replaced with 140-character or less messages shot into a digital space for hundreds, even thousands of people to digest at their leisure.
Since your audience now transcends your living room, anyone has the ability to listen in. And technology has made listening, and visualizing, very easy. Case in point: nearly 20% of all leisure travelers in the US alone are selecting their travel destinations from content they’ve seen on Facebook. What?
This means that in today’s landscape, every person who walks through the door of the hotel is a potential advocate with massive reach. However, the potential is only realized if hotels follow through on the opportunity to deliver the experiences their guests desire.
In today’s landscape, every person who walks through the door of the hotel is a potential advocate with massive reach.
Experiential travel
As the millennial demographic has developed and their income has grown, so has their desire to step away and see what the world has to offer.
Why people share
We all know that people go to TripAdvisor to share their experiences with the rest of the traveling public. It’s important to note, however, that this behavior is not entirely altruistic. There’s a self-serving element to reviewing one’s travel experiences and it has to do with telling a story.
We all love to tell a story—advocacy is merely one in short-form. It’s bite-sized. What did you like about the hotel? Was it the crazy fast service at the poolside pool where the bartender served up an original tincture with her own stylistic flare? That’s a story! It’s not War and Peace, but that’s the great thing… it doesn’t need to be.
What’s more important than the story itself is the person who is telling. The introduction is one to a like-minded audience from a trusted, authentic source. And that’s what makes advocacy so impactful for a brand.
Summary
We now know that loyalty programs have been around for a very long time, and that the general public is familiar with the concept. What’s different today is that the shift towards experiential travel has created a landscape in which hotels, particularly independent hotels, are positioned to create their own networks of loyal travelers by solidly delivering on those experiences.
Advocacy, on the other hand, is about giving your guests a story to tell and encouraging them to do so. The difference is subtle, but the important take-away here is that advocacy does not imply loyalty.
However, loyalty done right will foster advocacy. Combined the two are more powerful than the sum of their parts, and that’s what we’ll be exploring in upcoming installments.
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What's next?
  • The marriage of advocacy and loyalty—a matchmaker's dream
  • Breaking the boundaries of the loyalty model
  • Put your content to work for you
  • Improving, personalizing, and extending interactions with guests
Sources
  1. Social Media Cheat Sheet for Facebook, Twitter, Instagram and Video
  2. Peak + Skift Present: The Rise of the Experiential Traveler
  3. History of Loyalty Programs
  4. The history and evolution of hotel loyalty
  5. Stash Rewards one-of-a-kind loyalty program for one-of-a-kind hotels
  6. The Guestbook, Rewarding Independent Spirits
  7. A Rewards Program, Kimpton Style
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Richard Dunbar
Director of Partnerships

Hi [firstname,fallback=there]—Richard here from Flip.to. I’ve been in the hospitality space for over 15 years, including many at one of the largest providers of independent loyalty reward programs worldwide. After picking up my fair share on loyalty, I’ve been able to put it all together with revenue management, e-commerce, and now advocacy. Have thoughts about the e-course? Let me know!
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