Whatever business you're in, loyal customers are valuable. It's easier and cheaper to retain a customer than recruit a new one, and repeat customers spend more over time. For businesses with narrow margins like many related to hospitality and events, loyal customers are worth even more, which is why we are discussing why customer loyalty matters and how to promote it.

Why does customer loyalty matter?

Customer loyalty is valuable in two ways:

  1. Repeat customers spend more with your business
  2. They attract other customers

Acquiring a new customer can cost up to five times as much as retaining a loyal customer, according to Small Biz Genius. Returning customers spend more, adding even more to their lifetime value. As Jeremy Ong has pointed out over at Hustlr, customer loyalty also sets you free from competing based on price. Instead, you can rely on loyal customers who choose you every time.
In addition to repeat business, loyal customers have a knack for bringing other customers to your brand. Whether they write online reviews, post on social media, or simply talk about you, they provide social proof, validity and confidence which motivates other people to visit your hotel.
A good customer loyalty strategy should have two branches: retaining customers, and turning them into brand advocates for your hotel or venue.

How to create repeat customers

If you want people to return, then you have to offer a quality experience all the way through - from booking, to checking in, to checking out.  Repeat customers are happy customers, and customer loyalty programs are also a powerful way to incentivize, engage and inevitably retain customers.  Customers return when they feel that they are receiving added value, and are being recognized by your brand as a contributor to your business.   Staying up to date on what engages your current customers is important. For example, a common program for many hotels is a points system which allows guests to earn points with every stay.  However, according to the 2019 Hotel Loyalty Guide from Revinate, today's consumers are less interested in points schemes.

Statistics Courtesy of Revinate

Instead, customers are now looking for experiences and have a greater interest in a personalized experience. They want you to know and recognize them, and they want to be surprised with rewards.

How to create brand advocates

Brand advocates are the next step beyond loyal customers. These are people who don't just love your hotel, they want to tell the world about it.  Creating brand advocates starts with a successful customer loyalty strategy. Make sure you're offering a pleasant experience, with personalized details and surprise rewards. Then you can add the final touches that turn customers into ambassadors. One very effective way to do this is by responding when people talk about you.
Reply to online reviews, like online comments, and reach out to customers to send them small gifts and say thank you. This will double the impact of the original customer comment, and encourage more people to talk about your brand online. You could also experiment with offering rewards for customers who talk about your hotel and share it with others.

Tell us what you think

What are you doing to promote customer loyalty? Are most of your guests repeat customers, or first-time visitors?