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Brand Loyalty Goes Global
February 25, 2008
Keeping customers from every corner of the world happy is a daunting (but crucial) task
By Mike Kust
The business world truly has become a global marketplace over the past 10 years. Brands in all verticals have opportunities to expand their customer base just by tapping into new geographic markets. But today's hotly debated item is not brand opportunity but brand loyalty.
Can a brand inspire loyalty from customers in China, India, France and the United States with a single program? The answer comes in many languages, all translating into a declarative "yes." Brand loyalty programs can create stronger relationships with a company's most valuable customers in competitive new markets. One of the best examples of executing this kind of program can be found in an industry near and dear to the hearts of nearly every sales and marketing executive—the travel industry.
Many hotel chains operate several brands under a global umbrella. No surprise there to anyone who has stayed at a Regent and a Radisson on the same trip (Carlson Hotels) or a W and a Sheraton (Starwood). But if not managed properly, the result can be an inconsistent pattern of traditional marketing metrics and an inconsistent customer experience.
Even with the variety inherent to different brands, hotel chains can address the inconsistencies that many travelers face. For example, how does an executive who travels internationally earn points that accrue to a meaningful level if he has to stay in different hotel chains in different countries? And can that executive count on a positive experience when he has to stay in different hotel franchises, owned by the same company, that will accrue those points in a coherent program?
Brands must create the ability to connect customers of different properties with a common loyalty program—one that rewards recency, frequency and incremental revenue with exclusive experiences or financial incentives. The infrastructure needed to meet a multi-continent, multi-currency, multi-language customer base is demanding. It means that the executive who starts out at a company's luxury property in Beijing, then stays at the mid-level hotel in Oslo and winds up the trip at a family-style suite hotel near Chicago, can accrue points in the same loyalty program and reach the reward thresholds available in that program more quickly.
It also means that all the advantages of being an exclusive member need to be tied into one program. The exec who starts in Beijing should belong to the same frequent guest program as the suite hotel in Chicago. His currency changes should be recorded automatically. The preferences for bed, room service and other amenities also should be communicated automatically.
Also, the program should allow for converting points to airline miles with the participation of global airline partners. Improved benefits for elite members could include best available room, 25% to 50% point bonuses, last room availability, early check-in and late check-out, and elite-only points and cash offers.
One example of a successful program is the Carlson hotels goldpoints plus program. Randy Petersen, editor of Inside Flyer and FlyerTalk, in addition to a noted frequent travel loyalty expert, had this to say in a October 29, 2007 article that appeared on btbtravel.com: "In an age of member disappointment because of devaluation of their points, it's refreshing to know that there is a hotel company out there doing what's best for its customers. Carlson Hotels has raised the bar for earning more points for their members, 100% for most hotel stays, and yet for the large majority of their rewards they have not raised the requirements for redemption."
This brand connection program model works in many other businesses. In fact, executives in any business can learn from the following best practices for developing brand loyalty:
• Work across brands. Different brands need not compete for the attention and experiences available through separate loyalty programs. The business travel hotel brand is different from the luxury brand, and very different from the atmosphere of the family brand.
• Build brand loyalty programs around customers, rather than products or services. Customers are the source of all value. If they see an opportunity to earn more discounts or access to information by buying more of your product, they will buy more. If participating in a loyalty program enhances their overall experience, they will buy more often.
• Work across countries. Customers have common needs even if they have their differences. This model proves that the common need for convenience and familiarity will drive guest loyalty, regardless of what country in which it operates. In Asia, for example, customers expect higher reward levels than they do in North America, so extend that expectation to all countries.
• Find a partner with broad enough capabilities to meet your needs. The infrastructure required to design and deliver such a program must be reliable. The program provider should have a wide array of capabilities to meet your needs, including experts in operations, creative, interactive, IT, decision sciences, fulfillment services and prepaid cards.
Whether or not a company operates in China, Czechoslovakia or Chicago, all brand loyalty is driven by relationship strength. A good loyalty program builds trust. It acts in the best interests of the customer (mutuality) and it aligns the goals of all the brands involved. It encourages customers to stay longer, create more value and refer the program to colleagues, friends and family.
Mike Kust is the chief marketing officer for the Norwalk, Conn.-based Peppers & Rogers Group.
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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