According to Dr Ada Lo of the School of Hotel
and Tourism Management (SHTM) at The Hong Kong Polytechnic
University, and her co-authors, well-designed hotel loyalty
programmes can increase members’ satisfaction and improve the
quality of their relationships with the associated brands.
In a recently published article the researchers
highlight the loyalty programme features that are most effective
for building brand relationship quality (BRQ), and how BRQ
contributes to outcomes such as members’ word of mouth
recommendations and purchase intention.
The researchers explain that many hotel chains
offer loyalty programmes as a means to “reward frequent customers,
generate information about customers, manipulate customers’
behaviour” and compete with other hotels. Although these
programmes are expected to build business in various ways, in
reality customers’ behaviour does not actually change much once
they become members. Nevertheless, many hotels continue to offer
loyalty programmes as customer relationship management strategies.
Despite the large amount of attention paid to
the quality of relationships between employees and customers,
those between customers and hotel brands are little understood.
This seems surprising, argue the researchers, given that BRQ
reflects a customer’s “strong emotional and motivational tie with
a brand”. Although similar to brand loyalty, BRQ is considered to
be richer because it is a better indicator of the customer’s
relationship with the brand over time and can lead to higher
purchase intention, increased business and income for the hotel,
and better customer retention.
Given the lack of a clear definition of BRQ, the
researchers suggest that it comprises three dimensions: trust,
satisfaction and commitment. Trust indicates a person’s confidence
in and willingness to rely on and maintain a relationship with an
exchange partner. Satisfaction refers to how well customers
evaluate a good or service over time relative to their
expectations. Commitment refers to the customer’s willingness to
develop a relationship with the brand over time and is vital for
building and maintaining a positive relationship with the company.
In an effort to investigate the antecedents and
consequences of BRQ among loyalty programme members, the
researchers surveyed the active members of a programme offered by
“one of Asia-Pacific’s leading luxury hotel groups”. They targeted
roughly equal numbers of participants from each of the programme’s
three membership levels: basic-tier members, who had stayed at one
of the group’s hotels between 1 and 19 times within a calendar
year; mid-tier members, who had stayed between 20 and 59 nights in
at least 2 of the group’s hotels; and top-tier members, who had
stayed at least 60 nights in two or more hotels.
An online questionnaire asked how satisfied the
members felt with the programme’s hotel-related and non-hotel
related benefits. It also measured the three dimensions of BRQ and
three relationship outcomes: word of mouth, share of purchase and
willingness to serve as a marketing resource.
Of the 920 respondents, more than 80% were men,
and around 60% were aged between 36 and 55. Their levels of
education were generally high, with correspondingly high income
levels – almost 30% earned at least US$14,000 a month. Around a
third of the members were from the Greater China region and more
than a quarter were European. Although more than half had been
members for less than two years, almost a quarter had held their
membership for six or more years.
The researchers found that BRQ does indeed
consist of trust, satisfaction and commitment. On this basis, they
examined which aspects of the loyalty programme were most
effective in building BRQ. Membership communication was found to
have the strongest effect, confirming the importance of
“communication with customers in enhancing trust and other
relationship quality dimensions”.
The researchers suggest that
hotels should make use of this finding by developing targeted and
relevant communications exclusively for members with different
tiers of membership. They also propose that hotels make better use
of social media, along with emails and text messaging, to
facilitate direct interactions and better engage customers with
Customer relationship management activities,
particularly those related to employee customer orientation, are
also important for hotels seeking to build BRQ, argue the
researchers. Given the critical role of hotel employees in
building trust with customers, hotels need to ensure that staff
members are willing to prioritise customers and “tailor their
different needs and wants during face to face encounters”. As
customer orientation is important in Asian countries, which
emphasise the “long-term development of relational bonding and
trust”, the researchers were not surprised to find that the Asian
members of the loyalty programme preferred to build relationships
with employees who put customers first before engaging in a
Trust can also be gained when employees deliver
the service as promised by the brand. The researchers note that
hotels could make use of internal programmes to ensure employees
understand the brand’s promise to customers, and they need to hire
staff with the “right attitude” and train them well. Well
orchestrated internal communications could also be used to
effectively disseminate the brand’s message to employees around
Loyalty programme members with stronger BRQ
indicated that they would be willing to recommend the hotel brand
to others and would stay in the group’s hotels more often.
However, BRQ may not always have positive effects.
Against their expectations, the researchers
found that those with stronger BRQ were somewhat less willing to
serve as marketing resources for the brand as they were reluctant
to allow their personal information to be used. Word of mouth
recommendations, however, were another matter because they were
spontaneous. The researchers suggest that hotels could make use of
this by “encouraging their customers to be advocates for their
brands via social media”.
It is important for hotels to know what types of
rewards they should offer through their loyalty programmes. The
researchers found that members generally prefer immediate rewards,
which include features such as priority check-in, room upgrades
and discounts, that guests can immediately redeem during their
Loyalty programme managers could benefit from
this by placing more emphasis on immediate rewards and offering
more distinguishable benefits that differentiate the brand from
competitors. The researchers note that managers could use
importance-performance analysis to identify the benefits that
members value most, and may need to take into account the
differences in preferences between baby boomers and millennials,
as the latter are becoming more important in the hotel business.
Well-designed programmes can enhance member
perceptions of the brands involved and the loyalty programmes
themselves, but the researchers also emphasise that poorly
designed programmes can produce adverse effects. Hotels that
already offer or are considering introducing loyalty programmes
should thus pay careful attention to the features they contain.