Personalization is a buzzword as hotel loyalty programs seek to leverage customer data to create targeted offerings for their members.
One hotel company that has made personalization the focus of its loyalty program is Kimpton Hotels & Restaurants, San Francisco, which was recently awarded the 2012 Colloquy Loyalty Award for loyalty innovation in travel/hospitality by the loyalty program trade publication Colloquy.
Instead of systemwide email blasts and points, Kimpton InTouch uses customer data to personalize their communications based on a member’s lifestyle and interests and offers individualized rewards. Kimpton also says that this costs less than more conventional loyalty programs. HOTELS recently spoke with Niki Leondakis, Kimpton president and COO, to find out more about Kimpton’s loyalty club strategies.
HOTELS: What is the best loyalty program strategy?
Niki Leondakis: I don’t know that I could say there is one that works best across all hotels. It very much depends on what your value proposition to your guest is and why are they choosing to stay with you.
The number one reason our guests come back is they really appreciate and enjoy the personalized service. We don’t take a one-size-fits-all approach and we don’t make assumptions about what they want. The days of sending wine and cheese is over — business travelers aren’t going to drink the wine alone in their room and they can’t take it on the airplane with carry-on luggage.
Instead we let guests select their favorite item from the minibar on us or award our top loyalty members with free personalized trips such as fly-fishing in Montana, a tequila tour through Mexico or seeing Napa Valley from a hot air balloon.
Another aspect of our loyalty program is engagement. We do things like Inner Circle Dinners where we invite our top-level Inner Circle members locally, it’s usually from 12 to 30 people max, for small dinners that are intimate. We also do mixers of 50 to 150 people, monthly mixers in different cities for the entry-level members.
HOTELS: How do you mine data for personalization?
Leondakis: Once they join our loyalty program, we ask members to fill out this profile that gives us information about what their preferences are and what are their interests. We then sort our loyalty program by lifestyle interests and we target offers based on their interests rather than blasting across all members. For someone that likes food and wine, for example, we might talk about a behind-the-scenes restaurant program we were doing called “Behind the Apron.”
Our business strategy is to differentiate Kimpton through operational excellence, that is, personalized care for the guest rather than geographic distribution. We’re only 54 hotels, we’re not everywhere.
HOTELS: Loyalty programs are considered a big cost center. How are you managing costs?
Leondakis: Actually our program, research shows us, costs one-third of most major loyalty programs that are based on miles and points.
HOTELS: How do you market the loyalty program to non-members and who is the target customer?
Leondakis: Our customer is profile is a very wide demographic profile. They are most commonly identified through a psychographic profile more than demographic. The age range is 30 to 60. They are more affluent and they have at least a four-year college education and often have advanced degrees. Some are food and wine enthusiasts, some are spa or health enthusiasts.
We don’t do a lot of traditional advertising and we don’t really promote the loyalty program externally. You can join complimentary when you stay at our hotels, you receive complimentary WiFi if you join. The majority of our first time guests are word-of-mouth referrals, including social media word-of-mouth.
HOTELS: What is the social media component of the loyalty program and how effective has that been?
Leondakis: Really the social media component is our customers, when they are surprised and delighted, they are talking about being a loyalty club member on social media. Taking photos of handwritten notes, putting that through Instagram, saying they got upgraded to a suite, you see people re-tweeting that. It’s very organic.
HOTELS: What are Kimpton’s future plans for the program?
Leondakis: For us, our intention is to reward people for deeper engagement in the brand more horizontally. What I mean by that is for visits in the restaurants, use of services, and overall spend.
That will require additional technology that we are in the process of evaluating the purchase of. It is a technology solution. A CRM platform that works with the PMS system to give us that kind of information, that could involve a special charge card given to guests for on-property purchases.