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Loyalty Programs in Global Economy

Building customer loyalty in a global economy

Dr. Peter Tarlow, Tourism Tidbits  Mar 02, 2009

In the current economic situation, developing and keeping customer loyalty is essential. Recognize that in a global economy, customers have many more choices than ever before. Tourism competition is no longer "just down the road." In this new and interlocked world, we can determine tourism and travel competition by a number of options including the cost of travel, the languages spoken, and the quality of the total product.

Customer loyalty is another way to gain the best possible customer, repeat customers. Not only do repeat customers tend to spend more money but they are often the people who tend to provide the best word of mouth advertising possible. Numerous tourism businesses have developed customer loyalty programs. For example, the airlines frequent flier programs are some of the world's most successful customer loyalty programs. Other tourism businesses such as restaurants and even airport parking lots have replicated these programs. All of these loyalty programs are based on the idea that the more usage of product X makes the customer a special client and provides the customer with add-on benefits. This month's Tourism Tidbits provides you with a host of ideas on how to keep your customers loyal and ways to get them to come back.

Basically there are three ways to develop customer loyalty programs. We may call these: (1) enticement programs, (2) service programs, and (3) communications programs.

Enticement programs
A good example of an enticement program is one of the airlines of hotels frequent user programs. These are programs designed around the idea that a business' best customers are to be rewarded with special treatment, favors, or prizes. Other enticement programs are based around freebies such as hotels offering free toothbrushes to their guests or even a free breakfast. If you are going to use an enticement program, keep in mind:
-Do what you promise. Enticement programs have been a very successful way to develop customer loyalty as long as the business actually delivers what it promises. Airlines are frequent abusers of enticement programs. They often mislead the public by not carrying through on their promise. Their frequent black-out days, changes of policy and non-seat availability may have hurt airline reputations as much as the program originally helped to build loyalty.

-Be careful not to cancel or cut program benefits. Once the public becomes used to an enticement program, it resents any loss of benefits. If you promise X then deliver X. A withdrawal of benefits may be worse than never having begun the program at all.

Loyalty Service Programs
Nothing wins customers over than good service and good value. No matter how good an enticement program is, a lack of good customer service and a poor pricing structure is bound to undercut a customer's loyalty. This is especially true in the hospitality industry, which is an industry that is supposed to be all about service. When considering good customer service, emphasize the following:

-If you do not like people, the travel and tourism industry is not for you. Many hospitality employees see their work as just a job. People who do not enjoy people send off signals that turn our customers off. When hiring new employees, try to find extroverts who enjoy chatting with their customers and who see the travel and tourism industry as a never-ending adventure

-Talk, talk and talk some more. The more we know about our customers and listen to them the more loyal they are. Never be defensive when a customer complains. Instead ask the client what suggestions s/he might suggest and involve the customer in seeking a solution and in fixing the problem.

-Give people more than they expect. Whenever you exceed expectations visitors are not only surprised but also delighted. For example, the Grapevine, Texas police department clearly sees itself as part of the city's economic development team. One of the things that Grapevine PD does is provided many of its officers with a credit card to be used when a visitor or citizen has had a serious problem. Often the good will generated by the Grapevine Police brings people back to town. The principle here is that the little extra touch goes a long way to correcting any past mistake. Another example of this approach is Hawaii's VASH program. This is a program designed to help visitors in need due to an unfortunate mishap. The program has had tremendous success in developing customer loyalty to the state of Hawaii.

-Make your business or community special. One way to inspire people to want to return is offer something that is unique about your business or locale. In the modern world a common complaint from travelers is that they might be in "any place". Promote unique products, stores, experiences, or historical events. Customer loyalty and uniqueness often complement each other.

Communication programs
People are loyal to those who take the time to communicate with them. Communication may come in many ways, via newsletters, birthday cards, emails or telephone calls. The type of communication is almost less important than the fact that the business is communicating at all.

-Birthday discounts are a great way to go. Almost everyone wants to feel special on his/her birthday. Sending out a discount coupon as a birthday gift not only brings people into your establishment but in shopping at your store or visiting your community the person comes to feel that you care about him/her.

-Internet newsletters remind people, that you have not forgotten them. The web is great but it does not build loyalty. Newsletters and information packs build such loyalty. Let people know you care by telling them about new products and services that you offer. Ask for feedback and try to create contests, or other 'e-events that permit people to feel that they have a stake in your success.

Create forums where people can spread the word about your product via word-of-mouth. The best advertising is word-of-mouth advertising by a satisfied customer. Develop areas at places where people congregate that allow people to provide feedback and give you suggestions. The suggestions may be useful and the fact and all interchanges help to create a sense of bonding between your customers and you.

The bottom line: People care about people who care about them. Offer a unique product with pleasant customer service at a fair price and people will want to return. Perhaps the Bible said it best when it states "V'Ahvatah l'Reachah Kmochah" which is often mistranslated as "love thy fellow human being as thyself." A better translation might be "when you love your fellow men and women then you are not only being good to them but also to yourself." Be good to your customers and you will win their loyalty.

To contact Dr. Peter Tarlow, visit check his web page or via e-mail at

Building customer loyalty in a global economy
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