How To Maintain Customer Loyalty The March Marketers

Alexandra Knoll, Ali Anjum, Matt Silich, Rachel Reid, Shai Ben David, & William Patrick

Purpose

❏ To explore different promotional

strategies and market research

approaches to attract new

customers, retain current

customers, and maintain

prevalence as a brand in the

marketplace

Learning Objectives

❏ Explain the purpose and advantages of survey

research designs

❏ Describe the types of survey methods

❏ Discuss the factors influencing the choice of survey

methods

❏ Explain experiments and the types of variables used

in causal designs

❏ Define test marketing and evaluate its usefulness in

marketing research

Vocabulary

❏ Research Survey Methods(n.): Research procedures for

collecting large amounts of data using question and answer

formats

❏ Respondent Errors(n.): The type of non-sampling errors that can

occur when selected prospective respondents cannot be initially

reached to participate in the survey process, do not cooperate, or

demonstrate an unwillingness to participate in the survey

❏ Casual Research(n.): the investigation of cause-and-effect

relationships

❏ Self Administered Survey (n.): A survey in which respondents

read the survey questions and record their response without the

assistance of an interviewer

Magnum Hotel’s Loyalty

Program

“...the marketing VP realized all he had was a current membership listing and the total program costs to date of about $310,000,” (Hair et al. 107).

Chapter Five Introduction

Research Survey Methods(n.): Research procedures for

collecting large amounts of data using question and

answer formats

“Make your best customers even better”

The SUPER Consumer

Kraft’s Approach

The Five Myths

Advantages of Survey Methods

❏ Can accommodate large sample sizes so that results can be generalized to the target population

❏ Produce precise enough estimates to identify even small differences

❏ Easy to administer and record answers to structured questions❏ Facilitate advanced statistical analysis❏ Concepts and relationships not directly measurable can be

studied

Disadvantages of Survey Methods

❏ Questions that accurately measure respondent attitudes

and behavior can be challenging to develop

❏ In-depth data difficult to obtain

❏ Low response rates can be a problem

Airline Industry: Customer

Preferences

Timeliness

Meals

Assurance

Comfort

Safety

Convenience

Helpfulness

Airline industry

❏ Nearly every airline has a loyalty

program

❏ Two of the most effective programs:

❏ Southwest Airlines Rapid

Rewards

❏ American Airlines AAdvantage

Airline Industry: Southwest Rapid Rewards

❏Suitable for recurrent flyers who live in the Southwest United States.

❏Earn points for every dollar spent on Southwest flights and with the airline’s hotel,

car rental, and retail partners

❏Additional points can be earned by making everyday purchases using the Southwest

Rapid Rewards credit cards from Chase Visa

❏Must purchase airline tickets through the Southwest Airlines website or with a

customer service representative

Airline Industry:

Southwest Rapid

RewardsFour membership categories:

Basic, A-List, A-List Preferred,

and Companion Pass

Advantages of Southwest Rapid

Rewards

❏ No blackout dates

❏ Rapid Rewards Points can be earned on flights and hotels

❏ Miles can be used for any available seat on any Southwest

flight

Disadvantages of Southwest Rapid

Rewards

❏ Southwest's only flights outside the U.S. are to Mexico and the

Caribbean

❏ The number of points needed to redeem a free flight varies widely

❏ Points and cash cannot be combined to cover flight costs

❏ Points can expire

Airline Industry: American Airlines AAdvantage

❏ Benefits travelers based in eastern, central and southern American cities

❏ Earn miles for every mile flown on American Airlines, American Eagle, US Airways flights and

American Airlines-marketed or codeshare flight.

❏ Earn miles for flights on affiliated partner carriers through American Airlines' extensive

"oneworld" frequent flier network, which includes British Airways

❏ Collect miles for everyday purchases if you use any Citi AAdvantage credit card by MasterCard

❏ Must book your flight through the American Airlines website and input your designated

AAdvantage number

Airline Industry: American Airlines

AAdvantageFour membership categories:

Basic, Elite Gold, Elite Platinum,

Elite Platinum Executive

Advantages of American Airlines

AAdvantage

❏ Can earn miles with more than 1,000 partner companies

❏ Rewards can be used for both air travel and hotel stays

❏ Miles can be collected and redeemed on all AAdvantage

affiliate oneworld carriers

Disadvantages of American

Airlines AAdvantage

❏ Miles can only be earned for one program per trip

❏ Mileage credit for American and AAdvantage-affiliated partners will

be forfeited if your account is inactive for 18 months

❏ Can only earn miles for one seat per flight

❏ Points can expire

Airline Industry

Airline Industry

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Airline Industry: Big Data

“[Airlines use big data]to solve how to

recognize and enhance customer value, and

how to cultivate high-value customers” -

Bob Mann, Industry Analyst for R.W.

Mann & Co.

❏Focus on big data to understand

customer flying habits

❏ Tracking bags, personalizing offers,and

optimizing operations to boost customer

loyalty

Respondent Errors(n.): The type of non-sampling errors

that can occur when selected prospective respondents cannot

be initially reached to participate in the survey process, do

not cooperate, or demonstrate an unwillingness to participate

in the survey

Airline Industry: Big Data❏3 ways that Airlines use big data to increase loyalty

1. capturing sensor data to optimize maintenance

2. forecasting the weather to optimize fuel loads

3. identifying demand signal–offers allow much greater opportunities for airlines

to differentiate themselves

❏Social media websites help airlines collect customer attitudes and online transaction

behavior

Hotel Industry

Hotel Industry❏Hotel chains all across the world have implemented rewards programs

❏One of the most prominent chains that focuses on their loyalty rewards program is

Marriott

❏Small-brand chains and independent hotels are working to get themselves on the map

in the eyes of the consumer

❏Airbnb is a lodging service that may begin to utilize customer loyalty

Hotel Industry: Marriott

❏ Marriott’s Reward Points Program is the most

successful in the business

❏ Marriott’s program targets smaller brand

hotels and creates partnerships with them to

widen their rewards program

❏ Benefits of Marriott’s Rewards program:

❏ points/frequent flyer miles

❏ free hotel lodging

❏ travel fee discounts

❏ vacation packages

Hotel Industry: Marriott❏Marriott has adequately tapped into millennials by targeting younger travelers

through their loyalty program

❏Marriott has the highest return on loyalty points, with an average return of 9.4% for

every dollar spent

❏Marriott has also collaborated with the airline industry, most recently Delta Airlines,

to spread their program even further

Hotel Industry: Marriott on Social Media ❏ Marriott has dominated with a strong presence across

social media platforms, especially Facebook

❏ Marriott’s lack of focus on social media as of late

suggests Marriott is more focused on super

consumers/creating brand loyalty amongst current

consumers

❏ Through causal research, marketers could analyze the

relationship between social media and business success

and discover if better the social media presence causes

more success within the business

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Causal Research(n.): the investigation of cause-and-

effect relationships

Hotel Industry: Marriott Personal

Experience

Hotel Industry: Small Brands & Independent

Chains❏ Small brands and independent chains must customize their

reward programs

❏ These chains must analyze how truly loyal consumers behave in

the hotel industry

❏ “Loyalty is a loose concept in the minds

of most travelers”

❏ “Even high frequency travelers only

spend 58% of their time with their

preferred brand, and 65% report staying

with 2 or more brands in the past 6

months.”

Hotel Industry: Small Brands

& Independent Chains

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Hotel Industry: Airbnb❏Airbnb is an international company that focuses on helping people list and find

lodging at cheap prices

❏People can list an extra room in their house on the website, and someone can look

into renting it through Airbnb

❏Airbnb has been extremely successful with millennials and people of lower income

because it is very inexpensive and informal

Hotel Industry: Airbnb &

Spring BreakAirbnb has succeeded amongst

millennials, as they are looking for

the cheapest option for spring break

trips

Hotel Industry: Airbnb

❏ Airbnb is considered a serious competitor brands

such as Marriott, Holiday Inn and Hilton.

❏ According to Matthew Morrow of Fox Business,

Airbnb is currently valued at $24 billion.

❏ It’s success in the industry has threatened plenty

of hotel brands, who fear Airbnb's accessibility,

appeal to millennials, and affordability

Cruise-Line Industry

❏ The cruise line industry has a

wealth of different types of cruises

that includes options for the

individual or an entire family

❏ They even have THEME-based

cruises

❏ There are currently about 40+

types of cruises available

Cruise-Line Industry:

Scope

Cruise-Line Industry: Before

❏ Loyalty Programs used to believe that customers would be

swayed by the same universal set of “perks” without actually

considering what their consumers wanted

❏ The “perks” generally meant preferential services

Cruise-Line Industry: Customer Engagement

❏Customer Engagement, or target

marketing, was key to gaining the

customer loyalty

❏Engagement helped brands target their

loyalty programs towards their customer

segments more efficiently increasing

loyalty in the long run and decreasing

wastage of resources

Self-administered Survey: A data collection technique in which the respondent reads the survey questions and records his or her own answers without the presence of a trained interviewer.

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Cruise-Line Industry: Customer Feedback

“At one time we thought … had the best program because…

Now, we think the best benefits are provided by… It depends

more on what people want rather than the services provided

because if you don’t need them. You won’t use them!”

❏ Brands are using social networking websites, like

Facebook and Twitter, and User-Generated Reviews to

garner customer loyalty and engage customers

Cruise-Line Industry: Top-

Tier Some of the best loyalty programs of

2016 that follow this trend include:

❏ Azamara Club Cruises

❏ Carnival Cruise Lines

❏ Celebrity Cruises

AZAMARA CLUB CRUISES: LE CLUB VOYAGE LOYALTY

PROGRAMAdvantages: Preferential Services, First Spots in Shore

Excursions, Priority Tender Services, Complimentary Laundry,

Free Internet, Discounts for various cruise line features, and

More free stays on the cruise line.

Disadvantages: Booking must be done in advance for free days,

Hidden Costs for Recreational Features, Price changes during the

holidays, and Extra wait times according to capacity.

Maintaining Loyalty ❏The best loyalty programs often have a form

of sustainable profitability for when

margins are low

❏Sustainable Profitability depends on two key

sources

❏ Abundant Access Capacity

❏ Exogenous Subsidies

Cruise-Line Industry: Impressions ❏The cruise-line industry may not have yet

identified a SUPER CONSUMER

❏Brands are more concerned with catering to

wide range of consumers rather than one

type.

❏Customer loyalty is maintained through

sustainable profitability.

❏Customer Engagement comes in the form of

“perks” provided which helped gain and

maintain loyalty

Customer Loyalty: The Future

Customer Loyalty:

Technology

Customer Loyalty: Universal Loyalty

Customer Loyalty: Problems

❏The Loyalty Programs are working too well, specifically in the airline industry

❏Airlines are trying to make their rewards programs more complicated to

discourage membership

❏The loyalty programs within other industries could begin to see problems

Thank you!March Marketers

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