Thursday, April 9, 2009

Building loyalty without points.

I’m a member of several hotel rewards programs but an e-mail promotion I recently received from one of them really caught my eye. It was from a boutique chain called Kimpton Hotels, with about 40 locations spread across the US.

The deal was fantastic, an $81 a night weekend rate to commemorate the company’s 1981 start date, redeemable at any of the chain’s hotels. It’s a far cry from the normal Kimpton rate, about $300 a night for big city locations.

What really surprised me though was that I received the offer at all. You see, far from being a “best customer” of the hotel, I’ve stayed at Kimpton hotels a grand total of one night at The Muse, a chic but friendly small hotel in New York City’s Times Square district.

Even if I had been identified as a potential high value customer, I wasn’t offered the ubiquitous double and triple point offer, but something of much greater value: a premium hotel room at about a 70% discount. Thanks, Kimpton Hotels!

It raises the question of how to best build loyalty and strengthen the customer-brand relationship in today’s feeble economy. Are there more/better ways to build loyalty than a traditional points offering?

While a lot of companies have traditionally relied on points to lure customers into a relationship, it strikes me that the Kimpton chain—by making a generous price-focused offer to even new loyalty program members like me—is taking a much more aggressive approach.

Rather than waiting for me to show loyalty to the hotel chain through repeated stays before rewarding me, they’ve turned things upside down—they’ve shown me some love early in our relationship, and in turn, I’ve immediately put them into my consideration set, even though I can name three or four hotel chains where I have more points.

An article in a recent issue of Advertising Age titled “Redesigning Loyalty Programs to Last Beyond the Next Purchase” touches on this subject. Readers are advised to look for new methods to build customer relationships, including:

“…add(ing) customer benefits that are not explicitly mentioned. Unexpected rewards can have significant value as customers view them as gestures on the part of the brand rather than payments they are owed.”

The point is sometimes it makes sense to break out of the it’s-all-about the-points mentality and reward those who simply raise their hands and identify themselves as your customers. By boldly taking the first step in a relationship, Kimpton Hotels has made it more likely that I’ll take the next step—and consider a long-term relationship with their brand.

1 comment:

  1. I agree. Building loyalty is not just about points and rewards! It is about identifying and nurturing the yield of best customers through a long-term, reciprocity, value-added relationship. It requires a disciplined approach to putting your customer at the center of your business process.

    Customer Insight Group, Inc.
    Download Loyalty Report: