Role of customer loyalty programs and successful strategies for business

Authored by Aruna Jathar, Director – Marketing and Operations, RCI India.

One of the biggest challenges all businesses face is attracting and retaining loyal customers; who return frequently.  Even though attracting new customers is top of the agenda, a successful marketing strategy for existing customers is equally crucial. A well-thought out marketing strategy achieves both, building loyalty and bringing new customers on board. There are obvious reasons to hold loyal customers in high regard and keep them happy. After all, the more often someone returns, the more sales a business makes. This is especially important for hospitality players operating within the Vacation Ownership space.

Loyalty marketing helps save on marketing costs as it always costs more to attract brand new customers than to connect with existing ones. Existing customers provide an opportunity to resell and upsell, that goes a long way in saving operational costs and overhead expenses.  It is also important to build and retain existing members as they are the source of any new reference for the business.

In addition, loyal customers act as brand advocates as they provide you with word-of-mouth business. If someone stays at your hotel or resort whenever they plan a vacation, they are likely to recommend it to their friends. Considering that the average Facebook user has about 400+ friends Loyalty program should offer rewards for sharing your experience on social platforms with a check-in or other recommendation to build word of mouth publicity.

These benefits are significant for both online and on-ground businesses and at RCI we are strategically working to improve our customer loyalty and get more customers who return to us again and again.

We are consciously focussing on our Loyal and Platinum members and driving special initiatives to initiate new members through ‘Welcome Member’ process. To create a unique and special customer experience we have started programs like ‘Express Bookings’ counter and special lounge services at our member meets across the country for our loyal members that have been travelling with us every year for the last 5years, both domestic and international. We offer Platinum cards that gives our loyal members additional benefits and special discount of 20% + on every booking that they make with RCI.

The Vacation Ownership segment uses more personalized customer engagement strategies and unique value propositions. For example, as a token of appreciation, RCI recently curated a Coffee Table book which is a visual treat capturing the various travel destinations that RCI members can explore through their association with the brand.

Additionally, along with offline, visibility through digital channels is also becoming critical as members are transitioning to online world much faster than anyone could have imagined. The digital platform has allowed businesses to send out important messages to a targeted set of audience at a much faster pace and in the most cost-effective way. India is adding almost 10 mn Internet users every month. Following this trend, RCI India is focused at making all its members search and block their holidays online on RCI.com, 60% of our members search for holidays at least 3 times a year online on our website. Our holiday search numbers are growing by 7% every month. This gives us an opportunity to engage with our regular members online through New Destination and promotion information.

Our business intelligence helps us analyse our customer database which is a pivotal part of Loyalty Marketing to support the business. It helps create consumer segments that can be revenue generator for business and in a closed user group, Loyalty is an opportunity and sometimes the only option.

Hence, it is important to segregate the members database and study their booking behaviour, demographics, feedback, etc. to create programs to map out members that could be converted into loyal members.

Brand building is a critical journey in the life cycle of a business. Purchase-level segmentation build into loyalty systems help build more relevant content which in turn helps the brand effort. Humans in their purchase behaviour do value appearances and form certain perceptions.  The Brand plays a critical role in making the appearance that fits the customer vision. Hence, Brands are now investing in AI technology to determine where consumers will find value in an attempt to connect their products with their customer’s interests and priorities to drive loyalty.  

However, travel has always been about the experiences, and travel habits hugely remains emotional. Hence, while the focus of the business may be to drive loyalty programs by offering unique add on services, players operating in the hospitality space should never compromise on the basics and ensure the highest standards of guest service, quality food & beverage offering, in-room amenities with a loyalty programme that adds value to the guests. Because ultimately, it all comes down to customer engagement and care.