Loyalty
Programs Keep Customers Coming Back
By Laurie Burstein
Stay at a hotel and get back cash. Trade stock online and receive
frequent flier miles. Use airline miles to shop online. These
are a few of the latest innovations in loyalty programs designed
to entice customers to patronize specific hotels and airlines.
And in the race to keep customers coming back, several St. Louis-based
companies are leading the way with a variety of creative incentives.
In June, Adam’s Mark Hotel & Resorts began offering cash rebates
with a new program called Gold Mark Rewards. Fred Kummer III,
executive vice president, says the program is the first in the
hotel industry to reward loyal guests with real money. Participants
earn rewards based on stays at any of the 22 Adam’s Mark hotels,
as well as visits to the hotels’ lounges, restaurants and other
facilities.
“Our program involves no mileage, points or credits that can
be a hassle for participants to track and redeem. Gold Mark
Rewards is a simple way to let our guests decide how to use
their rewards.” Kummer adds that he sees this program as a way
for his hotel chain to go head-to-head with the giants of the
hotel industry in building guest loyalty.
One of those major hotel chains is Hilton Hotels. Hilton’s HHonors
program also rewards customers for their loyalty. The locally
owned and operated Frontenac Hilton participates in this program
where customers can earn either airline miles or hotel stays.
“Loyalty programs add reinforcement for guests to come back
a second and third time. It gives you a chance to present your
product with an opportunity to build repeat business,” explains
WJ Banmiller, general manager at the Frontenac Hilton. “We know
our guests like our program, because every fourth person is
an HHonors member,” he adds.
Kummer says there are already 50,000 members enrolled in his
Gold Mark Rewards program. In 2001, the first full year of the
program, the hotel chain estimates it will pay out cash rewards
of $3 million.
So why do service industry companies keep adding incentives?
“Because they work,” says Steve Schlachter, managing director/marketing
programs for TWA. “We know from our numbers as well as from
outside research, that these programs are proven to work. Customers
have more choices today, and we need to keep improving by offering
new twists to keep ahead of the competition,” he notes.
One of those new twists recently added by TWA is receiving Aviator
frequent flier miles for trading stock over the Internet. Customers
of E-Trade, an online trading service, can earn 5,000 Aviator
miles when they deposit $1,000 into their E-Trade accounts.
Participants can earn 10,000 Aviator miles with a deposit of
$10,000 and 25,000 miles, equaling a free ticket, with a deposit
of $50,000. In addition, customers earn 5,000 miles for each
customer they refer to E-Trade.
For those who would rather use their airline miles to shop,
TWA joined an online shopping program in November. Through MilePoint.com,
customers can convert Aviator miles into store credits at more
than 180 retailers including Brooks Brothers, Sharper Image,
Amazon.com, LL Bean, and 1-800-Flowers. The majority of merchants
in the program will allow anywhere from 10 to 25 percent of
the purchase price to be paid with converted miles.
“Shopping online is just another way we can add value and new
benefits for our customers. Some future programs we plan to
offer include earning miles for surfing the net and for playing
golf,” Schlachter says.
Although incentive programs can motivate customers to return,
customers really want a great experience at a hotel or an airline.
Ray Warren of St. Peters is a customer at the Adam’s Mark and
frequently travels to the company’s hotel in Clearwater, Fla.
“While I like the new program, it’s the icing on the cake. Most
importantly, they have a quality hotel and great service,” Warren
explains.
In order for any loyalty program to be successful, all agreed,
a great product and top-notch service is essential. Without
them, it’s difficult to keep customers coming back for more.
