By Frederick Szydlowski, CMO and co-founder of Embargo (www.embargoapp.com)
It has been extensively reported and widely agreed that of all the industries and sectors hit hard by the pandemic, hospitality has been among the worst affected.Throughout the lockdowns and social distancing restrictions imposed throughout the past 18 months, we all had to deal with our favourite local restaurants, bars and coffee shops repeatedly shutting their doors, briefly reopening them only to then shut them again.
While this was inconvenient for consumers, it was devastating for businesses.
When hospitality enterprises were finally able to completely reopen in July of this year, they were effectively starting over from scratch. Many had to deal with different suppliers, many local populations had changed significantly and across the country, staff turnovers were huge (for various reasons). Most notably, however, they had to rebuild their pool of loyal customers as they did not know who their loyalty customers had been or how to contact them.
For an industry based on consistency and reliance on repeat business, this presented businesses with a major obstacle and exposed the lack of effective tools in place.
WHERE LOYALTY COMES IN
Traditionally, a business’ loyalty strategy extended only as far as relying on staff to recognise regular customers and make them feel welcome. Some may have gone a step further to track visits and offer rewards accordingly; however this usually only extended to a flimsy physical loyalty card that could offer an impersonal free item after enough stamped purchases. It was a one-way relationship as even with physical stamp cards businesses did not know who their customers were and could not take action when loyal customers stopped coming.
This may have been enough for some companies before the pandemic, which relied on endless footfall and influx of new customers, but today, these manual methods have put hospitality venues in an often-helpless position.With less customers around, they have to rely on repeat business more than ever and as it turns out, a paper card handed in March 2020 has not been much of a help. It will also very likely not make the first post-lockdown spike of customer footfall loyal once the novelty of eating and drinking out again passes.
Not only is relying on analogue loyalty strategies ineffective, but it also fails to provide ways to actively manage venues’ customer base or gene ate any kind of meaningful data that businesses can analyse and act upon to increase repeat custom. Knowing who the loyal customers are, when they stop coming and how often the usually visit, makes it easier to reward them and act on warning signs before it is too late. However, it is key to make all that data fully actionable and easy to turn in business by running direct marketing campaigns. Being able to stay in touch, upsell and retain customers leads to building a more sustainable business based on happy customers who come back more frequently.These are the ways in which businesses need to change their attitude towards loyalty if they hope to stay afloat.
While the benefits of a smarter, digital approach to hospitality loyalty strategies were clear before the pandemic, the way in which businesses have had to change their approaches since reopening has made adopting new strategies essential. No business can survive without repeat custom, and what’s more, it is both easier and 5 times cheaper to retain an existing customer than attract a new one.
Investing in loyalty is a way of investing in customer experience and customer management. Customer profiling and communication enable to tailor to customers’ specific needs.
And this can be done without retraining staff or developing new systems – investing in CRM tools that show customer activities can automatically tailor the perfect reward that tells a loyal customer that they are valued. Rather than investing time and resources in far-reaching marketing campaigns to attract a new tranche of customers, tech-based loyalty and CRM solutions can help businesses engage with both new and long-standing clientele. However, it is key to keep it simple for the customer and staff in order to maximize adoption of those solutions.
THE LANDSCAPE HAS CHANGED
Customer experience is all about the individual, so any strategy that targets everyone indiscriminately won’t have the same effect as the one that has a personal impact. Consumers returned from lockdown with their thoughts on commerce forever changed; people had become used to engaging with businesses remotely through eCommerce and delivery platforms that were intrinsically able to generate data about their usage and habits that could customise their experience.
After that exposure to personalised shopping, traditional approaches to customer service are no longer fit for purpose. As such, investing in data collecting tools to identify and communicate with customers is instrumental to the future growth of hospitality businesses.
Loyalty used to be thought of as the natural by-product of businesses that were well run and offered quality products.To stay on top in a competitive, constantly morphing consumer landscape, hospitality businesses need to commit to and invest in loyalty, customer experience and smarter strategies if they hope to continue growing and thriving in a post-pandemic world.