Chapter Four

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Shoemaker, Lewis, and Yesawich: Marketing Shoemaker, Lewis, and Yesawich: Marketing Leadership in Hospitality and Tourism, 4Leadership in Hospitality and Tourism, 4 thth edition edition

Chapter FourChapter Four

Relationship/Loyalty Relationship/Loyalty MarketingMarketing



Questions to Motivate Questions to Motivate DiscussionDiscussion

Name two products or services to Name two products or services to which you consider yourself which you consider yourself extremely loyal.extremely loyal.

What has produced that loyalty?What has produced that loyalty? How frequently do you buy this How frequently do you buy this

product or service?product or service? What do you tell your friends about What do you tell your friends about

this product or service?this product or service? What do you tell your family?What do you tell your family?



Relationship/Loyalty Marketing Relationship/Loyalty Marketing Is….Is….

“…“…an ongoing process of identifying an ongoing process of identifying and creating new value for individual and creating new value for individual customers for mutual value benefits customers for mutual value benefits and then sharing the benefits from and then sharing the benefits from this over a lifetime of association.”this over a lifetime of association.”



When customers give you a greater share of their transactions than they might have without the program, usually in exchange for accumulating miles, points, or other surrogate discounts.You ask: Aren’t we quibbling here, isn’t that loyalty?

Frequency . . . Focusing on Frequency . . . Focusing on BehaviorBehavior



Loyalty . . . Focusing on EmotionLoyalty . . . Focusing on Emotion

When the customer feels so strongly that you can best meet his or her relevant needs, your competition is virtually excluded from the considered set, and the customer buys almost exclusively from you — referring to you as “their restaurant” or “their hotel.”Winning maximum share of heart, mind, and wallet.



The Benefits of Real LoyaltyThe Benefits of Real Loyalty The customer focuses on your brand, The customer focuses on your brand,

offers, and messages to the offers, and messages to the exclusion of the competition.exclusion of the competition.

Price is no longer the dominant Price is no longer the dominant consideration, but one component in consideration, but one component in the larger value proposition.the larger value proposition.



The Benefits of Real Loyalty (cont.)The Benefits of Real Loyalty (cont.)

Loyalty provides critical inoculation.Loyalty provides critical inoculation.– Competitive offers face a higher Competitive offers face a higher

hurdle.hurdle.– The customer becomes more forgivingThe customer becomes more forgiving

—goodwill equity—goodwill equity Loyalty begets loyaltyLoyalty begets loyalty



Life-Time Value of a CustomerLife-Time Value of a Customer

Definition: Definition: – The net profit you will receive from The net profit you will receive from

transactions with a given customer transactions with a given customer during the time this customer during the time this customer continues to buy from youcontinues to buy from you

– In today’s dollars/Euro/YenIn today’s dollars/Euro/Yen



Complaints Are…Complaints Are…

InevitableInevitable HealthyHealthy OpportunitiesOpportunities Marketing toolsMarketing tools AdvertisingAdvertising



The Past and Future of The Past and Future of Relationship/Customer Loyalty Relationship/Customer Loyalty

MarketingMarketing PastPast

– Lip service about Lip service about treating customers treating customers betterbetter

– No customizationNo customization– Complaints not Complaints not

processedprocessed– Customers not part Customers not part

of developmentof development– Focus on gaining Focus on gaining

new customers, not new customers, not retentionretention

FutureFuture– Work with the Work with the

negative and focus negative and focus on the positiveon the positive

– Translate guest Translate guest expectation into expectation into operational changeoperational change

Chapter Four

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