HTF 2023: Experts Discuss the Future of Loyalty
During the 2023 Hotel Technology Forum, three industry experts took to the stage to discuss the topic of loyalty. During their conversation, Toby Malbec, Managing Director, ConStrata Consulting asked his panelists to discuss how their own loyalty program was structured, where the program excelled, how it differed from other common reward programs, the role that AI plays, and what the future might bring for loyalty programs in the hospitality industry. Hear what Evan Crawford, Corporate Director, Field Marketing, Benchmark Pyramid Luxury & Lifestyle Hotels and Chad Mackay, CEO, Fire & Vine Hospitality had to say during the 2023 Hotel Technology Forum.
How are your brands leveraging AI within your loyalty programs?
Crawford: We work with one of the largest instant rewards platforms in the independent hospitality space. They're using the data we have on guests to deploy rewards and then take the time to puzzle out what rewards they are choosing. With that data, they can start customizing the offers to be much more relevant to our guests.
Mackay: We’ve collected an enormous amount of data over the years. We get it from our reservation system, catering and event software, as well as our loyalty program customer profiles. But all of these systems were siloed. We had tons of issues around data integrity and figuring out how to uniquely identify a customer. So, we partnered with a firm that used AI to sift through seven million records and identify 250,000 records that are considered to be super strong and highly relevant for our marketing team. Next, we’re going to use AI to unlock even more insights from the data we have from other sources, such as: item sales, POS data, location frequency data, etc.
How can AI help your staff elevate the guest experience?
Crawford: AI creates a lot of efficiencies and gives us the ability to parse through our data and create these meaningful prompts that can also help our employees do their jobs better. When our employees see which reward a particular guest selected, they’re then able to make a prediction about that customer’s interests. Staff can then offer insights into other unique experiences the guest may not know about and elevate that interaction and enhance the guest experience. We don’t want to take the human element out of hospitality, but we’re mindful that you can use AI to allow that technology to take some mundane tasks off the staff so that they can now do special things for the customer.
Mackay: We’re a high-end experience restaurant group, so our per head is about $110. When people come in, they expect high touch experiences. So, we’re trying to make sure that loyal patrons who have regular requests (a specific cocktail on arrival for example) can have that request taken care of by ensuring our staff members have that data available. However, we also have to be careful that the wrong data – or too much data – doesn’t end up in the hands of staff members and they end up saying something that could really embarrass a patron. As an industry, we have to be careful with how we use the data we have.
How are you monetizing your loyalty programs?
Mackay: When we started our loyalty program, many people said that high-end restaurants shouldn’t have a loyalty program. But we’ve proven that’s not true. Almost 40 percent of our revenue is now driven by our loyalty members. We're driving about $25 million through that channel. For a more specific example: Some of our independent restaurants are located within hotels. One of my restaurants partnered with the hotel to send out a marketing e-blast for a weekend package that included both a hotel night and a dining promotion. We ended up helping the hotel get 50 bookings for that weekend that it wouldn’t have had otherwise, and increased our own revenue for the weekend by ensuring those guests would be dining with us.
Are there any outside sources of information you would love access to in order to help create a better loyalty program?
Crawford: Customer profile data that helps us determine lifestyle interests and household income. Do they like to snowshoe or garden? Having data like that could really enrich our customer profile.
Mackay: When a hotel concierge leaves one job for another, I’d love to know where they went and how we can get in touch with them. That would really help us to know who is referring clients to our restaurants and which hotels we need to take care of. It might be a bit obscure, but it’s a real problem.
What are some ways that you’re changing the way your guests view and use your loyalty program?
Crawford: We’re not doing a point system. It’s all about instant rewards for us. Those rewards improve as you visit more and spend more. But it’s always nice to be greeted by name when you arrive at a hotel, and to head up to your room and see some specific amenities are waiting for you there. It’s all about these personalizations and elevating the program.
Mackay: We originally started off with a traditional rewards platform: spend something, get something. But we’ve started creating tiered loyalty that now offer really unique rewards. For example, in one of our tiers – you are given the ability to donate a dinner for four individuals at one of our restaurants to any charity of your choice. It’s been so amazingly popular that next year we’re going to make it so that any loyalty tier member can donate some of their reward dollars to charity. We also use our loyalty programs to unlock an experience for our members, such as being one of the first to taste a brand-new scotch, that we wouldn’t let just anyone who walks in the door do. Lastly, when our members get to a certain tier, they’re able to make any reservation time they want on any day no matter how popular we are that day.
These are just a few insights from this HTF 2023 session. To hear more, check out the video below!