hospitality customer loyalty retention revenue

Get Zeals: Anticipating the Electronic Loyalty Programs for Small Business of the Future

I used to work in the hospitality industry where I found that many of the programs designed to help the hospitality industry seem to just reduce profits. The related loyalty programs tended to pull customers from out of the region by offering discounts to pull them in and then charged a fee for the privilege. I found that a high percentage of these costly customers never came back or ever paid full price and that the incremental revenue these programs provided were often unprofitable. In addition, these services don’t share the customer data, treating the related customers as their asset rather than the acquired asset for the hospitality firm that was paying for the service. What Get Zeals provides is a service that costs 3% of the related revenue per engagement, ties the customer more tightly to the vendor, and shares data with the hospitality vendor so that the vendor gets most of the benefit from the related loyalty program.

Large companies often fund and staff their own loyalty programs which avoids at least some of this problem, but what Get Zeals focuses on is smaller companies that don’t have a lot of resources yet still need to attract, retain and motivate good customers so they’ll return. The goal is to correct the current problem in the hospitality industry in which 70% of new customers never return, 25% only return occasionally, and the 5% that are regulars aren’t well known so these very valuable customers can’t be protected.

Get Zeals today

What Get Zeals does today is use a customer’s credit card to identify and track the customer’s activity in the store. In effect, they can translate any credit card into a loyalty card which reduces the aggravation for the customer participating in the program and the cost to the store implementing it. They share the resulting data with the store so that the store can run reports on customer frequency and average spend, as well as rank customers based on their contribution to the top line. Get Zeals uses the AWS back end to assure reliability and access, and the stats they provide can accurately report things like the effectiveness of a flier or ad campaign in terms of generating additional related traffic and revenue. One of the technologies the program relies on to do this is the Plaid service, which is also used by Venmo to capture statistics while preserving customer privacy.

Get Zeals tools can be used to generate custom web offerings and provide a level of data sophistication that even large companies don’t often get today. It recognizes that as little as 5% additional customer retention can result in up to a 95% increase in profit.

The future of loyalty programs

Where I think this technology is going is towards a totally automated system where a customer going to a restaurant makes a reservation on-line using their credit card. The restaurant, based on the Uber-like rating of the customer, then identifies the customer based on their past behavior at both the restaurant they are making the reservations at and their prior behavior at other restaurants. Based on this, they provide the customer with a hierarchy of responses. If the customer tips well, behaves well and has proven both profitable and loyal, they get the royal treatment. They might be jumped up in the reservation queue and given priority to a better table. If they have more mixed results, they fall back in line and may end up with a less attractive table. If they have a history of bad behavior, under tip, are unprofitable or have other recurring behavioral issues (like dining and dashing), they are denied a reservation and may not be allowed into the restaurant.

This allows the restaurant to both protect their loyal customers by providing a clear value (like the airlines do) for their most profitable and loyal customers and helps keep people that refuse to follow rules (fight masks, abuse staff, always send the food back etc.) from causing harm to the establishment. The most loyal customers also would get unique perks like access to a special menu designed specifically for them, special gifts or offers on known dates like birthdays or anniversaries, and the ability to take their enhanced status to other restaurants that are also using this program.

The result would be a blend of the practices from a variety of industries applied and optimized to protect the most valuable and loyal of customers while, over time, weeding out the bad behavior that continues to plague the industry.

Wrapping up

During the pandemic, the hospitality industry has been widely abused and taken big hits to revenue and profits. Services like Get Zeals can significantly offset these problems today but, in the future, programs like this will be capable of eliminating those problems, making working and owning a business in the hospitality industry far more attractive and more profitable as well. But most importantly, these future programs will be instrumental in assuring the hospitality worker of tomorrow isn’t as abused as the hospitality worker of today.

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