How segmentation techniques can power guest loyalty

Customer Loyalty
Segmentation of loyalty data allows hotel brands to create a more personalized, curated experience for members, giving them incentive to take advantage of unique offers. Photo credit: Rawpixe/iStock/Getty Images Plus

Hotels consistently strive to better understand the key drivers of loyalty program engagement to better appeal to members of all types. Loyalty data tell the story of what every member desires most, as told through his or her individual history.

Segmentation of customer data allows your loyalty program to directly appeal to all types of guests using targeted rewards and promotions. Segmentation of loyalty data allows hotel brands to create a more personalized, curated experience for members, giving them incentive to take advantage of unique offers.

There are two key ways to segment customers’ loyalty data: by point balances and member tiers.

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Segmentation by Point Balance

The most important loyalty factor for many guests is naturally their current point balance. Segmentation of members by their total point balances enables hotel brands to send personalized promotions, incentivizing them and raising their engagement in the rewards program. 

When sending promotions to loyalty program members, it’s paramount to ensure that the minimum point balances of targeted audiences are realized. Imagine reading a long email and signing in to your favorite brand’s program only to find out you don’t have enough points to qualify! "Blanket" marketing tactics like this can quickly lead to a poor customer experience and rapid disengagement. 

Taking into consideration customer loyalty data such as total point balances, hotel brands can send loyalty offers and promotions to only those members who have the current point balances to redeem. By valuing your members’ time through sending only relevant promotions, your hotel will immediately start building guest loyalty and a positive customer experience.  

Given the cost required to attract long-term members and to engage them in recurring, profitable booking cycles, it is critical to ensure opportunities for members to find redemptive benefits at regular points that complement their shopping behaviors—whether they’re light/seasonal travelers or highly transactive power users.

Segmentation by Member Tier

Loyalty programs also can segment all members according to their member tier to allow for a greater level of personalization through targeted reward offers. This way your program’s most ambitious promotions can be sent to only Platinum-tier guests, offering them complimentary welcome drinks or late checkouts. Relevant offers like these engage guests of all segments by offering different rewards just for them.

For example, your brand’s loyalty program can offer all Platinum-tier members 20 percent off luxury car rentals, while members below this tier will still view the product’s standard price as listed on your brand’s website. By segmenting offers this way, brands can ensure members attribute rewards and incentives directly to their individual status in the program—such a strong element of reciprocal loyalty relationships.

Win Guest Loyalty

Hotel loyalty programs, and reward points in general, are undifferentiated and often commoditized. However, members can be part of a true loyalty relationship through a brand’s targeted efforts to make them feel special, where their level of engagement is continually recognized and rewarded. Therefore, it’s paramount for hotel brands to not only collect customer data, but to act on it in meaningful ways. 

Segmentation strategies make optimal use of this data to provide a greater level of personalization and to deliver relevant rewards that resonate with guests, drive engagement and inspire true brand loyalty. 

Douglas Gaccione is the EVP of global growth at Switchfly.