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What does Red Lion Hotels and the 2003 film, “Seabiscuit,” have in common?
Jason Thielbahr, Senior Vice President of Revenue Optimization & Distribution Services, Red Lion Hotels Corporation, told attendees Tuesday at the 4th annual Loyalty360 Engagement & Experience Expo, that a 54-hotel chain currently based in the Pacific Northwest can significantly enhance customer engagement and brand loyalty.
“Sometimes, when the little guy that doesn’t know he’s a little guy, he can do great big things,” Thielbahr said, referencing Jeff Bridges as Charles Howard in the 2003 film, “Seabiscuit.”
During his session on Tuesday titled, “Guests Are Forced to Earn Our Loyalty: What’s Wrong with This Picture?”, Thielbahr focused on how Red Lion Hotels transformed from a points-based loyalty program to its current Hello Rewards loyalty recognition program based on knowing customer preferences and surprise and delight.
“Points didn’t modify behavior,” Thielbahr explained.
Applying COS (Cost of Sales) metrics to your loyalty program is a key metric, he said, along with successfully delivering on customer recognition service.
“The loyalty space is ripe for disruption and innovation,” he said.
Thielbahr explained that Red Lion’s former loyalty program – R&R Club – wasn’t effective, was impersonal, and the company wanted to keep existing customers, while trying to attract the emerging Millennials segment that wants more instant gratification and personal recognition, rather than navigating through stratas and tiers.
In the R&R Club, Thielbahr offered a significantly negative statistic: 95% of its members then had less than three lifetime stays at a Red Lion Hotel. Something had to change.
“R&R struggled to compete,” he said. “R&R members needed to spend $1,000 to get a free night. The opportunity for improvement was robust. A points-based program just didn’t modify behavior.”
But a key differentiator for Red Lion Hotels is the fact that its staff members boast incredibly long tenures.
“We wanted to modify our customers’ behavior,” Thielbahr said.
He offered a quote that Red Lion Hotels cherishes: “Memories of good times are more powerful than memories of great savings.”
Red Lion Hotels realized that loyal customer are easier to sell to, they spend more, and make a business more successful.
“Surprise and delight is at the forefront of our service promise,” Thielbahr explained. “Relevancy matters. Membership doesn’t equal loyalty. Hotels have a unique opportunity to build brand loyalty through Customer Experience. Our goal is emotional loyalty.”
Thielbahr believes Hello Rewards will clearly differentiate Red Lion Hotels, help increase bookings, reduce cost-of-sale per bookings, and add significant member benefits that will help modify behaviors.
“We want enthusiastic brand advocates,” he explained. “If you’re not monitoring your reputation, you’re missing the point. We will knowingly recognize our guests.”
Thielbahr listed some key elements Red Lion Hotels will focus on as the Hello Rewards loyalty program was rolled out last month.
Refocus on priority customers
Hardwire pursuit of building an emotional bond into operations
Determine what behavior constitutes loyalty bond
Reinvent programs and experiences
Building Member profiles
Published benefits and unpublished perks
First interaction is key: “We want to earn your loyalty on the very first day,” he said.
What’s more, Thielbahr said Red Lion Hotels uses the following three pillars as a foundation for Hello Rewards:
Knowingly Recognize Customers
Surprise & Delight
“This is a wholesale change,” he said. “It’s a competitive differentiator. We want to focus on 1-to-1 personal relationships. We want to double member stay frequency and double member room night contribution.”
Building strategic partnerships with brands such as Starbucks helps Red Lion Hotels “feel bigger,” Thielbahr said. The brand has big plans to expand outside of the Pacific Northwest next year.
“The R&R Club fee was among the highest in the industry,” he said. “Hello Rewards is among the lowest in the industry. We want to own this space.”
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