Look inside of your wallet or on your key chain. Do you have cards that tell you your membership number with various entities such as grocery stores, hotel chains, airlines and pharmacies? I bet not only do you have one, but you might have 10 or more. That is an example of loyalty marketing – those companies know how much your repeat business is worth.
Let’s face the facts: you spend a good deal of money to get potential vacationers into your sales pipeline. You built a website, spend money each month on SEO and PPC, send out emails, and engage in social media. You do this year after year because, after all, new customers are the lifeblood of any company.
However, did you know that it costs six to seven times more to attract a new customer that it does to keep a current one? That’s a big difference. Yet, some companies are continually under an assumption that previous clients will not leave them for someone else. In today’s day and age of Internet searching, distribution sites, social media presence, and other forms of getting information, that is a bad business model.
What would happen if you could increase customer loyalty by 5, 10, or 15% per year? First, all things remaining equal, you could spend less money on new client acquisition because you would be spending less on getting the same amount of sales. Secondly, you could invest the savings into increasing your business.
That is why ‘Loyalty Marketing’ has been a hot topic for so long in almost every other industry besides vacation rentals. Those companies giving you the membership loyalty cards in your wallet are giving some sort of value for shopping at their stores or purchasing their product, and they know that keeping you engaged is more cost-effective than searching for new customers. It could be as simple as discounts at the grocery store or coupons emailed to you from a retail shop – but it is the most recognizable form of loyalty marketing for today’s consumer.
So, once again – why is this important to the Vacation Rental Industry? Because, on whole, it is one of the last industries not to embrace loyalty marketing. For many years, vacation rental managers assumed that people would come back to them year after year. But it is time that as an industry we realize that the consumer is wanting more for their loyalty because they can find your product many places. As one of the last holdouts from formal loyalty marketing programs, loyalty marketing is an area where you differentiate yourself from your competition. Become more than your product to your customers: become a valued relationship.
The purpose of these blog posts is to help you define and express your value to your clients and prospects. Going back to our first post, where we discussed the definition of loyalty - what is the difference between you and your competition when product and price are similar? It is the value you bring to the relationship.
Do you provide services, information or communications that the client cannot receive elsewhere? Do you reward the guest for their continued business/loyalty in some manner?