Hyatt Offers Random Lesson in Loyalty Building

Discussion
Mar 29, 2011
Al McClain

At the recent Loyalty Expo in Orlando, speaker after speaker
talked about improving the customer experience and the value that loyalty
programs bring to that effort.

In a session moderated by rDialogue CEO Phil Rubin (a RetailWire BrainTrust
panelist), for example, Kathy Turley of The Palm Restaurant Group talked about
how the company compares visit data of loyalty program members to non-members.
The Palm tracks the incremental spend that members make on visits when redeeming
loyalty points and finds that loyalty program members are a little more forgiving
when they experience a problem.

In another session moderated by another BrainTrust
member Bill Hanifin, managing director, Hanifin Loyalty LLC, Jackie Reid of
the Visa Luxury Hotel Collection mentioned that 0.4 percent of their customers
drive more than 25 percent of their revenue, so they have a VIP program for
them, naturally.

Yet, with all the talk of targeting
and measuring (“That which gets measured
gets done”), I was in for a very pleasant, apparently random surprise when
I checked into the conference hotel, the Hyatt Regency Grand Cypress, Orlando.

What
happened? Arriving at the Hyatt before noon last Monday, I expected to have
to check my bags and get into a room later. Henry, the front-desk associate,
asked if two double beds would be okay. I replied that any room would be fine,
just wanting to drop my bags and get to the conference. After a wait of several
minutes, during which time I heard another potential guest turned away nicely
because the hotel was sold out that night, I was informed that Henry was “looking
for a really nice room.” And, indeed he found one! As I was handed my
room key, Henry informed me that my room was a “bi-level” and that
he had made me the “guest of the day.”

Long story short: I was upgraded
from a $189 standard room to the Grand Cypress Suite on the 17th and 18th floors
of the hotel, which had a living room, sitting room, mini-kitchen, huge outdoor
patio, a large master bath plus a guest bath, two large HD TVs, etc.
Maximum nightly charge according to the door posting: $5800.

All in all, it
was a great customer experience, albeit not a targeted one. Upon checking out,
I asked another associate why I had been selected for this upgrade. She
said they select one person at random per day for their “guest
of the day” program and that it is at the discretion of front desk personnel.
It’s not a national Hyatt program, but just something this hotel does.

This
got me thinking about whether retailers and brands should measure and target
all aspects of their customer loyalty programs or if fun surprises like this
might do more for customer loyalty than targeted efforts. At first I thought
I might have been selected for this upgrade because I have a lot of Hilton
points, figuring they might be trying to convert me, but that apparently was
not the case. In many years of travel, accumulating well over a million American
Aadvantage miles, for example, I’ve never experienced anything like this.
And, of course, the first thing I did following this experience was tell family
and friends about it.

For more images of the Hyatt Regency Grand Cypress Suite, see RetailWire’s Facebook
page
.

Discussion Questions: Should retailers and brands incorporate “random acts of kindness” into their customer experience and loyalty efforts or are untargeted efforts like this unlikely to return measurable ROI and therefore be a wasted effort?

Please practice The RetailWire Golden Rule when submitting your comments.

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23 Comments on "Hyatt Offers Random Lesson in Loyalty Building"


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Peter Fader
Guest
10 years 1 month ago

For the most part, this is a foolish/wasteful move by Hyatt. Yes, there should be some random (non-targeted) efforts like this, but the vast majority of such activities should be tied to past customer history. I suspect that they’re doing this because they haven’t yet figured out how to serve up targeted offers effectively and efficiently–and that would be a pretty bad reason!

Max Goldberg
Guest
10 years 1 month ago

Random acts of kindness will get people talking about brand experiences, and therefore are great at generating word of mouth. Loyalty programs are designed to reward valued customers. Both can coexist in a brand’s strategy.

Gene Hoffman
Guest
Gene Hoffman
10 years 1 month ago

Random acts of kindness have potent appeal. Just consider how Al McClain was treated and the ensuing stage that it has been put upon. Such random acts of kindness convey greater sincerity than most loyalty endeavors and people value sincerity.

Steve Montgomery
Guest
10 years 1 month ago

A similar thing happened to a friend of mine when we were both staying at a Hyatt property in AZ. At first he was hesitant to mention it as he didn’t want anyone to be aware of the tremendous upgrade he received. Once he did and found that everyone was very happy for him rather than saying why not me, he was very willing to show the room to everyone and talk freely about it. Certainly their policy was a topic of the meeting (although the meeting was not on loyalty but retailing).

Some things cannot be measured in the traditional sense. One random act of kindness per day in a hotel/restaurant/retail location is not going to be measurable in the same way a company tracks its other loyalty metrics. Too small a number of instances. However, as evidenced by my personal experience and that reported in the article, is significant enough that these acts will generate some positive word-of-mouth advertising and potentially some publicity.

Bill Emerson
Guest
Bill Emerson
10 years 1 month ago

I, for one, think this is a terrific idea. In this example, it’s probable that the suite was not booked for the evening, so Hyatt lost no revenue. What they did do was get some terrific marketing (we’re writing about it aren’t we?) and a very happy customer. More subtly, Hyatt gave authority to its local managers to do something really crazy–make a guest feel special. Giving local managers authority of this sort makes for a very happy and loyal organization and, in turn, great customer service.

While I agree that the core customer should be targeted and rewarded for their loyalty, this is not an either/or proposition. The game today is to stand out from the competition. This kind of unexpected surprise is what helps build loyal customers. I experienced an equivalent with Zappos recently and they are now the first place I look for shoes.

Kevin Graff
Guest
10 years 1 month ago

Look at these random acts of kindness as being completely separate and apart from any loyalty program. They don’t make the loyalty program better, and they don’t make up for a lack of one.

But on their own they are brilliant and magical. Think about how you would feel and react if you were on the receiving end of any random act of kindness by a business. Think about how you would tell everyone about it.

Then, consider how staff could be positively affected by being involved in these random acts of kindness. Asking them to be involved clearly sends the message about the importance of the customer, and puts them on the front line of making it happen.

Win. Win. Win.

Ralph Jacobson
Guest
10 years 1 month ago
I would think that most of us whom travel extensively have great stories similar to this. Years ago I boarded a Delta flight. After taking my seat, a flight attendant walked up to me, thanked me by name for flying with them today and gave me a bunch of upgrade coupons. She had a printout of frequent flyers of OTHER loyalty programs. Even though I was 1K on United, I called Delta the following day, told them the story and they made me Gold status and I started flying them exclusively. That was a ton of revenue gained for a random act. Just last week, I walked into the newest hotel in Las Vegas, The Cosmopolitan, and asked for a room without a reservation! I was pleasant to the staff, and although they told me they were oversold by 14 rooms, eventually the resort manager, Josef, found a room and actually escorted me to the room to ensure everything was ok. Amazing! I have already booked another stay there for the next business trip to… Read more »
Mel Kleiman
Guest
10 years 1 month ago

Random acts of kindness will harness the same kind of response that random acts of poor service do.

When you treat people badly the research shows they tell 19-21 others. If you treat them well they may tell 5-7. If you treat people with random acts of great or unexpected service they will tell at least 19 and if they are a blogger or really involved in social media they will tell 1,000s just like this.

Next time I am in Orlando and check into the Hyatt, I will make sure and ask them if I can be the guest of the day.

Bill Robinson
Guest
Bill Robinson
10 years 1 month ago

Surprise is a key component of experience. Experience can either be neutral, bad or good. Loyalty cannot be build with neutral or bad. So any effort to turn the surprise factor into something positive is definitely a good direction for any consumer facing retailer.

It would be telling to study the post-surprise response of the recipients. Are they buying more and more frequently? Are they raving fans? Have they told their friends and associates about the shopping experience? If so, what outcomes resulted?

Inserting the positive surprise into the marketing equation seems like a total winner. But if it doesn’t result in positive outcomes, it is a wasteful extravagance. Random acts of kindness without feedback is potentially foolish.

Richard Gordon
Guest
Richard Gordon
10 years 1 month ago
I believe that the Hyatt Hotel is right on target. Aside from having hundreds of pleasantly surprised customers who are feeling special about Hyatt each year, look at the publicity and notoriety they have achieved in addition, with the conversations this effort has generated here and in other venues. This is also an example of two important concepts that any small business or small retailer should take note of. 1) This hotel was obviously empowered to to take care of their customers in a manner that was left up to them at the front lines. It is important for management to empower its own front employees to take care of customers and to do special things for those customers as needed and within parameters (especially when there has been a problem). 2) Any business or retailer can and should surprise good customers on a spontaneous basis. While targeting or rewarding “good customers” may be preferable, it’s the surprise element that doesn’t come across as a closely monitored corporate loyalty program that gives these special actions… Read more »
Ed Rosenbaum
Guest
10 years 1 month ago

Al’s story and experience is a good one. One that he has now told to countless hundreds–if not more–people just by having it on Retailwire.com. Think of the ripple effect this has. Like the pebble dropped in the water, we are now thinking and talking about it. His friends and family are telling others. It is a good story of one location going the extra mile to create added satisfaction for their guests. What’s wrong with this? Others will find the negative. Me? I am not even going to attempt to look for them.

I am a solid committed believer in exceptional customer experience stories. They are happening very day. Just look around and you will find them. Maybe it is time to look for the positives in life. We surely have had enough negatives.

Doug Fleener
Guest
10 years 1 month ago

Thanks for sharing your experience, Al.

The goal of every customer interaction should be to strive to exceed the customer’s expectations, and at the very least meet them.

While obviously you can’t upgrade every customer to the best room (or it would a crowded room), a staff that looks for these opportunities will create as much if not more loyalty than any program.

Some might call it a random act of kindness…I would just call it another great experience.

David Biernbaum
Guest
10 years 1 month ago

Random acts of kindness should be passed along to your best customers, particularly in the hotel business. I do hope that the customer that was turned away was not one of their Gold passport members!

Bill Hanifin
Guest
10 years 1 month ago

Surprise and delight is a proven tactic that, in this digitally connected world, has even greater potential to generate positive word of mouth and brand recommendation.

I hope they at least made some connection with the customer’s standing in the rewards program, which translates to say that even random acts of kindness should be based in targeting of some form.

My only real gripe here is that all of the BrainTrust members at Loyalty 360 weren’t invited up to enjoy the view!!!

Next time? 😉

Peter Fader
Guest
10 years 1 month ago

Wow, I’m totally outnumbered on this one–but I’m sticking to my arguments: (1) I think that everyone above is way overstating the incremental customer-level profits that will arise from these random acts; (2) And you’re ignoring the even greater incremental customer-level profits that might have arisen if they saved these gestures for the “right” customers. And finally: (3) You’re also ignoring the raised expectations after these random acts–and the subsequent disappointment when you don’t get the special treatment in the future.

I think it’s great that Hyatt is trying this–it’s better than nothing. But it’s not nearly as good as it could be if they had stronger customer analytics and better ability to target offers to particular kinds of customers.

Joan Treistman
Guest
10 years 1 month ago

While I agree that the random act of kindness initiative can create great buzz and loyalty, I’d urge companies to work on random acts of problem solving. More than anything else I judge an organization on their ability to deal with problems that come up…and we travelers know they do.

For the person sent away, did the Hyatt try to locate a comparable room at another hotel? That would have been worthy of buzz and loyalty as well.

Larry Negrich
Guest
10 years 1 month ago

Even random acts of commercial kindness should be focused on a target segment of the customer base. And keeping these programs secret may add to the excitement of the participant but adds little value to the program or brand. It is great to be the recipient of one of these upgrades, we all like to be treated special. Knowing that there is a random possibility of an upgrade can be a powerful loyalty tool for a retailer to utilize.

Michael L. Howatt
Guest
Michael L. Howatt
10 years 1 month ago

This random act of kindness is similar to “Undercover Boss.” It helps a few people and seems really heartfelt but doesn’t really help the organization’s overall client base or internal processes.

Gene Detroyer
Guest
10 years 1 month ago

This is just plain good business. The hotel is full. The suite isn’t reserved. Any nightly fee is a positive to the hotel. On that day that room has no more value than any other room. Now the question is “who are we going to give the benefit to?” It just makes sense to give it to a very valuable customer.

Let’s not be naive. Al would not have gotten the suite if someone would have been willing to pay $2,000 for that night.

Tim Henderson
Guest
Tim Henderson
10 years 1 month ago

Random acts of kindness certainly can’t hurt. But when conceiving loyalty-generating initiatives (including loyalty/reward programs) they need to be targeted, i.e., crafted to resonate with the brand’s core consumer and/or key demos shopping the brand. Such initiatives also need to be consistent. A hit and miss approach could actually do more harm than good, especially if the brand adopts a mistaken mindset that one nice act per day is enough.

The travel/leisure space is also a bit different than retailing, where an individual store may have hundreds or thousands of consumers going in and out daily, most with varying shopping needs and desires. Merchants should practice random acts of kindness. But doing one nice thing per day for thousands of consumers is like playing Powerball. It’s kind of fun and you might win (generate loyalty), but the odds are not in your favor.

Bernice Hurst
Guest
10 years 1 month ago

The only downside to this story–which I think is a brilliant albeit hard-to-measure loyalty-generating exercise–is that the customer who got turned away wasn’t asked to wait. A few minutes longer and he could have had the room that Al no longer needed. And the hotel would have had another happy customer as well as even more revenue for the night.

As someone who refuses to be bought by loyalty offers, a random act of generosity is far more likely to inspire me than any amount of targeting could ever do.

Ed Dennis
Guest
Ed Dennis
10 years 1 month ago

It’s a [bad] program. Why? Because you are not directing resources to maximize return. In fact, this type of program will eventually alienate the rewarded customer because he/she will have it in the back of their mind at every future check in and will be emotionally disappointed with every future stay. We all know this will drive the consumer to another vendor. Why can’t everyone quit playing games and provide excellent service to every guest that walks in the front door?

It’s been done for years by many and could be done by Motel 6 or 4 Seasons–it’s a matter of attitude.

Phil Rubin
Guest
10 years 1 month ago

While what Hyatt is doing is perceived as a “random” act, it’s actually something that Hyatt has engineered into the experience. It is, as illustrated, operationalized.

We think of these “random” acts as unpublished loyalty marketing initiatives and they underscore the reality that loyalty marketing is not just about published programs but rather doing things that are good for guests and good for the business in programmatic ways.

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