5 essential indicators to measure the loyalty of your customers

Customer loyalty is a marketing concept that consists of creating and maintaining an excellent relationship between a customer and a brand. To do so, keep in mind that a loyal guests will not hesitate to come back, make reservations regularly and also talk about your property to their relatives. Moreover, this concept is closely linked to satisfaction.

Indeed, satisfaction is represented by a successful experience and a positive image and beliefs developed in loyal customers. However, satisfied doesn’t mean loyal. A satisfied traveler is not always 100% loyal and conversely, a loyal traveler is first of all satisfied with their experience.

Furthermore, it has been proven that retaining a customer is 7 times cheaper than trying to get a new one because they are already attached to your brand. So why not seize this opportunity and turn your loyal guests into true brand ambassadors? These ambassadors represent a real advantage for you since they will 100% trust you and will not hesitate to recommend you. It will definitely create a word of mouth effect. Also, those customers will be more favorable to buy your services and will not be tempted by your competitors’ offers. These loyal guests will be more understanding in the event of technical problems and they will be more apt to give you feedback and improvement ideas.

As you know, your loyal customers are excellent opportunities for your property but did you know that it is possible to measure their loyalty?

Net Promoter Score (NPS)

The NPS is an essential indicator if you want to measure the loyalty of your customers. If using a customer satisfaction survey, you should ask the following question: From 0 to 10, how likely are you to recommend this product or service to a friend or a relative? Thereby, you will be able to classify your guests in different categories: promoters, passive people and detractors.

Promoters category includes people who answered 9 or 10 to the previous question. It represents the most loyal and satisfied customers. Therefore, they are most likely to book future stays at your property. In addition, promoters will recommend your property to their relatives and they will act as brand ambassadors to future prospects. This is why it’s important to offer them an irreproachable stay and a VIP customer experience so that they will feel privileged and they will continue to talk about you in a positive way.

Customer acquisition rate

The customer acquisition rate is used to determine whether a marketing strategy or a business strategy is effective which means that it generates a large number of leads. Thus, this indicator is calculated by using all the expenses dedicated to promotion and marketing over a given period divided by the total number of new customers acquired over the same period.

In order to improve your customer acquisition rate, we advise you to favor low-cost marketing actions such as newsletter campaigns, SEO optimization and social media.

Customer acquisition rate: (Promotion and marketing expenses / Total number of new customers) x100

Customer churn rate

Unlike the customer acquisition rate, the customer attrition rate help to know the proportion of customers lost over a given period of time. Lost customers are inactive customers who haven’t made any purchase for 1 or 2 years. To know what is your customer churn rate over a given period of time, you have to take the number of lost customers divided by the total number of customers over the same time period and multiply it by 100.

Customer churn rate: (Number of lost customers/ Total number of customers) x 100

Repurchase rate

The repurchase rate is an useful indicator if you want to have an overview of customer who are developing loyalty towards your property. It is also used to measure the impact of a marketing campaign. All you have to do is to take the number of customers who have at least made one new purchase over a given period of time divided by the total of customers over the same period and multiply it by 100.

Repurchase rate: (Number of customers who have made at least one new purchase/ Total number of customers) x100

Customer retention rate or loyalty rate

The customer retention rate also called loyalty rate allows you to measure the number of customers successfully retained during a given period. You can calculate it as follows: (100 – customer attrition rate) x100. If you want to improve your loyalty rate, it’s very important to be proactive, to focus on retargeting strategies, to always keep in touch with your guests and regularly reach out to them using targeted and personalized messages.

Retention rate or loyalty rate: (100 – customer attrition rate) x100

The hospitality industry’s activities are very irregular and seasonal, this is why customer loyalty can become a real challenge for hoteliers. Therefore, if you want to succeed in building customer loyalty, you must prove the real added value of your property. Several strategies can be implemented such as the use of customer data collected by you hotel software (PMS), the implementation of a personalized loyalty program, retargeting actions, a competent customer service which is always available and attentive to guests’ needs and also an outstanding customer experience.

Building customer loyalty to your brand through your own communication channels also allows you to increase your number of direct bookings and avoiding intermediaries such as OTAs keeping a commission on sales made. Moreover, remember that it’s important to stay in touch with your guests by using email marketing, blog or even social media. Indeed, social media is a  great tool which is free to use and easily accessible. It would be relevant for you to establish a targeted content strategy that will help you generate engagement and create an attachment feeling in your customers, build a personalized brand image and highlight the added value of your property.

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