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By Matt Peterson

Quick quiz, what do these leaders have in common — “Jack Welch of GE, Steve Jobs of Apple, Mark Zuckerberg of Facebook, Steve Wynn of Wynn Casino Resorts, Elon Musk of Telsa, Richard Branson of Virgin, and Donald Trump of well… Trump”?  They are all past and present individuals that arguably have developed their company brands around “cults of personality.”

But leader-centred enterprises are quickly becoming outdated and irrelevant, as consumers across all service and product offerings become more educated, connected, mobile and discerning.  And perhaps even selfish. That is, the proverbial script has flipped, and now brands must take the initiative to engage with consumers on levels that transcend traditional advertising or the transactional “bribery” of loyalty programs.

I had the opportunity to sit down with Kristie Goshow, CMO at Preferred Hotels & Resorts, to discuss what loyalty programs were and what they need to become, in order to continuously attract and engage 21st century traveller:

Are today’s loyalty programs in over-drive?

There has been significant coverage on the topic of consumer loyalty during the past few months. Major hospitality brands continue to rework, revamp, recalculate and ultimately, reimagine their loyalty propositions across consumer, trade and partnership audiences. Could such activity signal that loyalty programs have finally reached maturity and no longer delivering against their core objectives? Alternatively, are hospitality brands now ‘really’ ready to rally resources around their principal engagement lever to mitigate rising costs of sale and intermediary innovations around the shopping and booking experience?

If we think back to the original inception of loyalty programs in the early 1980’s, they were a vehicle to support marketing efforts amid airline deregulation and an opportunity for brands to obtain critical information about their guests. This overarching need for data has spurred the mass proliferation of loyalty programs across multiple industries, with travel and hospitality having led the way. The need for data remains albeit our consumption and use will witness a seismic adjustment.

Fast forward 25 years, loyalty has become a ubiquitous term. Does it really matter anymore?

From my perspective, it most definitely does still matter. Possibly more than ever before. What has and continues to change, is the interpretation of loyalty. It does not mean the same for everyone. Homogeneity in program benefits have now become the entry stakes for most schemes. This ground-work offering immediate gratification before loyalty has even been established between two parties, simply sets out why an individual may initiate a deeper level of engagement with a brand but not the reason to sustain such. Winning the consumer a second time requires a significant rewire in thought process.

The concept of loyalty can be found in the seminal work of Abraham Maslow. It sits squarely with the need for ‘belonging’. What has changed however, is the evolution of human needs. With many segments of society now finding themselves in the higher state of Maslow’s hierarchy, loyalty programs must reward against the need for self-actualization. The recent explosion in ‘experience driven’ content and the increasing focus on transformative travel have raised the ‘benefit bar’. Loyalty now has an elevated role to play in consumer’s lives. It must absolutely help them to realize their true potential.

What has worked and what have you seen not work in attracting new customers to loyalty programs?

A fundamental aspect of program success lays in the hygiene factors of structure, technological interoperability and operational ‘buy-in’. In short, many hours are often invested into refining the program benefits and overall marketing plan but not the mechanisms for seamless execution. The swan looks beautiful but under the water, the legs paddle furiously to get the swan where they need to be. I’m sure many hospitality colleagues can speak first hand of their experiences ‘under water’!.

When implementing a loyalty program, many hoteliers still struggle with the idea of engaging a guest they ‘already had’. I’m sure Starbucks Branch Managers felt the same way when they had to start issuing stars and rewards. Loyalty has to be a consistent commitment. Imagine your local drive-through not honouring your free Latte because ‘that location doesn’t participate’. We cannot make our business structures the concern of our consumers.  What we must absolutely ensure is suitable, robust measures of engagement that demonstrate that our program is performing both a defensive and offensive role.

In summary, a commitment to training, consistent delivery of benefits and leadership buy-in will ensure a loyalty proposition has a winning chance in driving frequent, recent and highly engaged consumers who will lower your overall marketing costs as willing ambassadors. We all seek enhanced reach, visibility and a reason to speak with a large population motivated by ‘something more’.

With big brands buying small brands and the focus on ‘boutique brands’, where do you see this trend in 5 or 10 years?

I would like to re-iterate my earlier point concerning evolved societies and consumer needs. Many of the larger brands have chosen to expand their propositions based on generational differentiators. Unfortunately, the golden thread remains a formulaic approach to physical product offerings where differentiation is reliant upon experience activation at a property level.  It is my personal belief that the mass consumer will tire of the mass approach (both in organizational size and product standardization). The delivery of an experience will rely on singular hospitality destinations. Unique in design, build, ethos and culture. The consumer of today has stepped into collectorship mode again only this time, it’s the collection of moments for betterment and that means an unbound hotel may face a future significantly brighter than today provided they have a global stage like Preferred Hotels on which to tell their story. And yes, I am unequivocally biased.

About Matt Peterson, Los Angeles

Matt Peterson started his career in executive search in early 2005. Having traveled extensively throughout the United States, Europe, and Asia, he brings a global perspective to the hospitality industry. Matt understands people. His relationship-based approach balances the clients’ needs with the candidates’ personality, resulting in a win-win for everyone involved. He lived in Florence, Italy and studied at Scoula Leonardo da Vinci, an Italian language school. He holds a Bachelor of Arts degree in Business/Economics from the University of California, Santa Barbara and a Masters Certificate in Hospitality Management from Cornell University. Additionally, Matt has furthered his education at the University of California, Los Angeles studying personal and corporate tax. Prior to executive search, Matt did sales and marketing for Pacific Life Annuities & Mutual Funds and for Centex Homes, both Fortune 500 companies.

He is actively involved in his community and is on the Alumni Board of Loyola High School, Los Angeles, and a Board Member of United Cerebral Palsy’s Los Angeles Chapter.

Contact: Matt Peterson

mpeterson@aethoscg.com / +1 310 469-2529

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