Hotel Loyalty Card Performance

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Hotels and motels introduce new loyalty programs for regular customers. If you often stay in the same hotel, it would be reasonable to get a loyalty car and pay less. But are all loyalty cards profitable for hotels? Use Balanced Scorecard to answer this question. Check additional information about hotel loyalty card performance.

Hotels and motels always fight for customers. Indeed, this industry is highly competitive. There are so many hotels and motels to stay in. They offer pretty much the same services and prices. However, every hotel wants to have regular customers. i.e. have regular source of income. Thus, they introduce special loyalty programs for regular customers. Such loyalty programs imply discounts and special prices for customers who often stay in the same hotel. Loyalty programs are as a rule beneficial for customers who save money and in most cases they benefit hotel management and owners, if implemented efficiently. Just as any advertising and promotion campaign, loyalty programs must be evaluated for consistency. In other words, they should generate increased revenue for hotel owners and shareholders as well as contribute to customer loyalty and readiness to pay money. In this article we will discuss use of Balanced Scorecard for the purposes of loyalty program evaluation.

As known, Balanced Scorecard or BSC is a strategic management and performance evaluation tool. Its key difference from similar tools is that it does not just evaluate performance. BSC puts strategy into action and measures progress of a company on its way to reach strategic goals. Thus, having adopted a strategy, say, for 3-5 years, top management of a company will be constantly having access to information on current performance and use this information in strategic planning.

BSC consists of 4 categories: financial, customer, internal processes, learning and growth. It is remarkable that BSC can be used both on a department and a company level. Besides, it is possible to use Balanced Scorecard to measure efficiency of advertising, promotion, marketing and loyalty programs. The 4 perspectives of Balanced Scorecard perfectly suit evaluation needs of a loyalty program.

Financial category includes KPIs related to introduction of a customer loyalty program, such as additional costs per customer, sales growth etc. It should be noted that although financial category is considered to the most important, positive financial results are just impossible without positive results in the other 3 categories.

To customer perspective we refer all KPIs that are related to hotel guests, customer satisfaction, number of complaints, etc. The point is that customer satisfaction is directly related to revenue growth. Satisfied hotel guests will certainly come back to the same hotel again. Thus, when measuring efficiency of customer loyalty program, measurement of customer satisfaction is a must. A high level of customer satisfaction signals about increased revenue in the near future.

As to internal business processes, in order to make customer loyalty program effective, it is necessary to optimize business processes. In other words, hotel management should thing where they can cut costs and optimize procedures in order to offer loyal customers discounted prices, otherwise such loyalty program will be waste of money and result in massive losses.

Learning and growth perspective cover KPIs related to education and improvement of personnel. It is i9mpossible just to lower prices. Something should be done to make it realistic. Use of knowledge and advanced skills help hotel management and personnel offer top quality services at reasonable prices.

If you are interested in hotel loyalty card performance, check this link to find out more about hotel loyalty card performance. Also, you can check other articles in BSC Training category.

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