The existing loyalty programs are rather standardized at the moment, and offer hardly any innovative services. Do you think that hotel loyalty programs can be optimized with the help of new technologies (e.g. members of a loyalty program get free internet access), and as a result increase customer loyalty?
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'loyalty' programs in most consumer and business service industries, they are principally frequency-driven, built around creating a largely economic incentive to use/purchase more often, and upsell and cross-sell on the same basis.

These programs may claim to influence true loyalty and customer commitment to a supplier; however, because they tend to be both similar and complex, they seldom achieve that ambition. When we speak of loyalty programs, what we mean are programs and processes designed to optimize true customer loyalty behavior. They are constructed on a foundation of understanding customer needs and wants, and then offering program attributes that are both valuable and have strategic differentiation.

For the lodging industry, if focused loyalty program development study determines that a benefit like free internet access has a) high importance, b) high perceived value, c) attainability, scalability, and tiering capabilities by the chain, and c) positive differentiation from benefits offered by competitors, then, by all means, it should be included in a pilot program. It's leveraging effect, in action, should be assessed; and assuming its has a sufficiently dynamic and positive response among customers, it can be cascaded to the segments who will be most receptive.

We shouldn't forget, ever, that the principal benefit of a loyalty program to the company offering it is the customer data generated. If the program creates little customer insight, or hasn't a mechanism for continuity and dialogue with customers, it should be modified, re-thought, or retrenched (or even eliminated, as some companies have done) until that objective is met.

I didn't mean to be long or cryptic with my answer; but, you're right about loyalty programs: they have strong 'white bread' tendencies with little innovation and strategically differentiated value.

This was first published in July 2002

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