Customer loyalty: the future of hospitality marketing

Abstract

For many years hospitality firms have believed that the goal of marketing is to create as many new customers as possible. While hoteliers believed it was important to satisfy the guests while they were on the property, the real goal was to continue to find new customers. This constant search for new customers is called conquest marketing. In the future, conquest marketing will not be sufficient. Instead firms need to practice loyalty marketing or retention marketing. The authors believe that this will be the successful wave of the future in hospitality. The goal of this paper is to present a framework for understanding customer loyalty. We do this first by examining the economics of loyalty. We then define loyalty and explain the difference between frequency programs and loyalty programs. We also show why satisfaction does not equal loyalty. We then introduce the Loyalty Triangle©, which provides a framework for building customer loyalty. Each leg of the Loyalty Triangle© is then examined in-depth, including examples of how hotel companies use the Loyalty Triangle© to develop strategy. Next we present ways to measure the success of loyalty programs. Finally, we present future research issues.