Return customers drive success in hospitality sector
Experience, value, image cultivate consumer loyaltyMarch 29th, 2018
Between an ever-globalizing world that makes traveling to exotic locales easier and increased marketing, the tourism industry has changed dramatically in the last five years. Hospitality, travel, and tourism managers and marketers are now faced with the challenge of not only getting first-time visitors, but also the daunting task of keeping tourists coming back.
Considering how many destinations around the world offer similar attractions, services, and experiences, it is essential for industry professionals to understand what makes customers loyal to a specific destination and tailor their offerings accordingly.
Loyalty is one of the most examined concepts in marketing and hospitality fields, because success depends not on the first purchase but on repurchase. Loyalty is critical for recruiting and retaining customers, and increasing their willingness to pay more while reducing servicing costs.
But what drives this loyalty? How can we get the repurchase?
My research conducted at Washington State University’s Carson College of Business identifies seven factors that influence the formation of loyalty. Those can be broken into four things managers should consider if they want to keep guests coming back for more.
Build and market the experience. Not surprisingly, the overall experience is the No. 1 precursor to cultivating loyalty. For example, if a family has a positive experience with a specific snorkeling guide on their trip to Hawaii, they may be more likely to redo the same experience on their next visit, or even make it part of their vacation tradition.
But experience isn’t just based on a guest having a good time once; there are several elements that play into the cultivation of loyalty, including time spent at a destination, attachment to the locale, and relevancy to their personal desire and expectations.
Studies suggest that both the number and length of previous experiences, as well as the level of attachment with a destination can affect a customer’s image of a destination. Going back to the trip to Hawaii, a person may feel even more attached to the destination if they went there numerous times as a child. That’s called place identity, which encompasses the emotional attachment between the person and the place.
People also might build attachment to a destination that meets certain needs or goals. Because of the emotional and practical elements of attachment, it has a large influence on a traveler’s motivation, destination image perception, satisfaction with and loyalty to a particular place. On a deeper level, guests also want to feel involvement with a destination. The more a destination’s characteristics align with an individual’s personal desires, expectations and values, the more likely the person is to feel personal involvement and relevance with the destination.
Create value. Never to be forgotten in the hospitality industry is the need to provide quality service and create real value for guests. Satisfaction with the overall service and perceived value is a key determinant of loyalty because it strongly influences people’s destination selection, choice of activities and services, and even their decision to visit again and recommend the destination to others.
Additionally, satisfaction shapes travelers’ perception of the quality and image of the destination. Studies further suggest that quality service and satisfaction sow the seeds for loyalty—and loyal customers are more likely to return and give positive word-of-mouth endorsements and referrals.
Cultivate your image. Image management is among the top responsibilities of any destination marketing organization, because a destination’s image can sway travelers’ decision-making and selection behavior. Travelers typically select destinations with positive images for vacationing because they assume the destination will provide high-quality service and satisfactory experience.
With the evolution of marketing, destination marketing organizations (DMOs) and others in the hospitality industry should be evaluating their marketing spending to ensure they are reaching the right people at the right platforms.
It is important to remember that an image isn’t solely developed through marketing. Studies also suggest a reciprocal relationship: Travelers’ experiences at a destination, as well as their impression looking back at their trip, likely will influence how they view the destination.
Understand the motivation. Finally, understanding what motivates individuals to travel and choose one destination over another is key to developing products and services that meet tourists’ needs and expectations.
The dominant theory used to study why people travel is the push-pull theory, which examines tourist motivation from two dimensions.
People travel to a specific destination either because of push factors, which are personal motives, such as the desire to have fun, relax and escape from daily routines, or because of pull factors, which are various attractive attributes specific to a destination, like sandy beaches, quality restaurants, entertainment, and attractions.
When the push-and-pull factors closely match, an individual would decide to travel to this destination versus other similar destinations.
Given approximately 80 percent of a business’ revenue comes from 20 percent of its customers, it’s vital to the success of the business to ensure those customers are happy with their experience. To enhance customer involvement and image perception of a destination, businesses can develop customized communication strategies to portray a product or service experience based on customers’ specific needs and desires.
Strategies could include a customer relationship management program to help track loyal customers. Keeping in close contact with returning customers helps establish two-way communication that enables the business to identify changes in their customers’ interests and expectations and then customize their offerings accordingly.
Developing a rewards program to incentivize frequent users is another method for improving customer involvement with the product or service.
In travel and tourism fields, taking into consideration the factors driving destination loyalty will not only help businesses tailor their offerings, it will also keep the destination top-of-mind for consumers as they plan their next vacations.