Loyalty programs have been a hit since the 1980s, and in 2022, they were still pulling in big bucks. American Airlines made a cool USD3.1 billion, while Marriot scored USD2.7 billion. Talk about cashing in! According to McKinsey, 3 out of 4 members of top loyalty programs change their spending habits just to rack up more rewards. Dedication, much?
Now, when it comes to hotel F&B loyalty programs, they're like the VIP pass to a world of perks. Think discounts, cash vouchers, upgrades, and even freebies in dining, stay, and leisure. But what's the secret sauce behind a loyalty program that keeps on ticking, even when the economy's playing hopscotch and tech's doing the cha-cha? Well, Simon Lowater and Geoff Spiller, the dynamic duo behind GMS Group, spill the beans.
Who is GMS
Celebrating the company's 25th anniversary in 2024, GMS Group is a leading operator of hotel F&B loyalty program in Asia Pacific. They have been working closely with global hotel chains, such as Marriott, InterContinental, Hyatt, and Shangri-La, to deliver successful F&B loyalty programs in terms of both revenue and brand proposition. Today, GMS Group is the largest full-service providers in this domain and has a network of over 100 offices across 15 countries.
A Good Deal
'It has to be a good deal in place… to make sure that the money placed upfront and entrusted by clients is justified.'
--Simon
'No matter what price you sell a product at there has to be perceived value for money at whatever stage.'
--Geoff
A good deal, as suggested by Simon, involves a lot more than competitive pricing and obvious discounts, despite customers being instantly attracted to these two factors. It's a matrix of consistent food and drink production quality, standardized service, ambiance, brand promise, and customer experiential perception in the hotel. Geoff observed that customers in recent years are increasingly value-sensitive given that brand impact is no longer as influential as before. It, thus, renders an obvious 'hook' essential when enrolling new members.
Their comments on customer value proposition resonate with attributes of a new consumer category: zero consumer, which McKinsey describes as 'diverse and growing' segment but are 'everywhere in Asia'. Omnichannel shopping, zero loyalty, and willing to splurge on restaurant dining, travel, apparel, and fitness, these consumer behaviors identified are changing the way in which GMS Group communicates with the customer. As they constantly monitor emerging market trends and adapt themselves to consumer demands, they have proven their strength in sales. Proud as they are for their business achievement, both Simon and Geoff believe enrollment is just stage one on their journey for sustainable revenue.
Customer Engagement
'We do not just focus on selling cards…. After that it's about ensuring customers see value in their membership, the only way customers see value is to use it. '
--Simon
'Marketing is certainly one of the big determinants for a successful loyalty program.'
--Geoff
In Geoff's words, 'the real value' of a loyalty program is 'not about how many members but about how often and how loyal those members are and therefore how much value they bring to the hotel in terms of consumption'. Geoff deems customer recognition as 'absolutely critical' for member retention. Standardizing prioritized, exclusive services and creating personalized experiences with emotional resonance for members are two areas hotels really need to enhance and invest resources in.
From the loyalty program operator's perspective, customer retention relies on the depth of engagement GMS Group offers. It includes a dedicated on-site team of sales and loyalty ambassadors and the regional marketing team who deliver one-on-one communications right through targeted digital campaigns. Simon adds that communications go beyond the level of customers; a tight and supportive relationship with the hotel is equally important. From aligning program objectives, fine-tuning marketing strategies to modifying program benefit structures, all these require constant communication with the hotel from top management to frontline executives.
Simon credits their technological infrastructure for ensuring that communications are handled with efficiency and security. Apart from a reliable IT team, he highlights Salesforce, the powerful CRM system they employ, which integrates lead generation, customer engagement, data analysis, and database security on one platform. To offer another layer of protection for data security, GMS Group is the only company in the industry that holds a cyber security policy in place.
Sustainability
'Because our service and care start from the top within the company, that service and care then go out to our clients too and that also helps us to forge a stronger, longer and lasting relationship with our clients.'
--Simon
'Companies respect companies that tells the truth, are 100% ethical and do the right thing. We always stay true with our ethical way of behaving that's of paramount importance to us.'
--Geoff
Loyalty programs, by nature, thrive on sincere connections, be it with the customer, the hotel, or the staff. The level of passion, care, and sincerity Simon and Geoff have put into the business in the past 25 years is reflected in their perspective and depth of thinking during this conversation. If communications and engagement keep GMS Group in the present within market dynamics, their core value of care and work ethics will take them a long way.
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