July 22, 2016

Hotel loyalty programs should balance economic and social benefits

What researchers call the “distinct natures” of social and economic rewards offer some insights into how hotels can attract customers and maintain their long-term loyalty.

Although economic reward programmes are attractive to customers and promote loyalty, they tend to offer “similar economic benefits in competing with one another” and these benefits are easily replicated by other companies. Hence, loyalty to a reward programme “does not always translate into company loyalty” and economic benefits alone are not sufficient to prevent customers from switching to other programmes.

Social benefits, in contrast, generate more loyalty from customers, who tend to be “intrinsically motivated to stay with a hotel” because the personal service they receive helps them to become emotionally attached and committed to it, and thus provide greater relational worth.

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