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The objectives

The marketplace for hotel guest loyalty programs is crowded with guests who belong to multiple programs. Whether they are active or passive members of these programs, the competition for their stays is intense, with providers offering attractive member benefits and frequent promotions to gain share of wallet. Our client tracked their Net Promoter Score (NPS) and its drivers believing that by improving NPS they would increase stay behavior at their hotel properties. Instead, they experienced unexplainable shifts in their scores that did not reflect their membership’s actual behavior and were difficult to explain to management. Given the situation, our client wanted to find a proven measurement approach that could identify the aspects of the program that would truly impact behavior. By understanding these drivers, our client could prioritize its resources and invest in areas that would make a difference in members’ hotel stay behavior.

case study research

our approach

Illuminas conducts a MaxShare™ loyalty tracking study with our client’s loyalty program members on a quarterly basis. The study measures members’ share of stays with our client and its competitors, identifies the drivers of share for our client and each of its top competitors, and provides an assessment of tactics that are linked to the key drivers of share. Different from traditional satisfaction tracking studies, this study not only tracks satisfaction with our client’s program but measures program loyalty and ranked performance of our client and its competitors’ programs using our MaxShare™ solution, certified by the Wallet Allocation Rule®.

Illuminas conducts an analysis to measure our clients and their competitors’ predicted share of wallet, or MaxShare™ score, which is a loyalty metric that represents each company’s fair share of hotel stays. The analysis identifies the core items driving the MaxShare™ score among members, and we measure the impact of each item on current share and potential to increase our client’s share of business. This helps us identify the key strengths and opportunities for improvement of the program that are known to impact members’ hotel stay behavior. Using these results, we also estimate the impact on revenue if the item’s performance is maximized to demonstrate the value of committing resources for improvement. For the first time, our client understands what drives members’ hotel stay behavior, not just what makes its members satisfied with the program since traditional satisfaction metrics have been proven to predict less than 1% of spending behavior.

Our client also learns what drives stay behavior for its top competitors, and where competitors have an advantage and pose the greatest threat to capture share from our client. In our head-to-head analysis, we identify the items that drive members to use each of our client’s top competitors and areas that pose a risk for our client if the competitor chooses to improve them, as they could take additional share from our client. This detailed analysis provides a game plan for our clients to help them respond to competitive threats and minimize any decrease in share of stays due to a change in the competitive environment.

Another goal of the analysis is to understand what tactics the client can employ to affect the key drivers of hotel stay behavior. To do this, we use our MaxServ™ solution, which measures our client’s performance in tactical areas that are proven to affect the key drivers of share and identifies priorities for improvement to ultimately increase share of stays.

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the outcome

The study design and analysis gives the hotel company strategic insight into precisely why members use each hotel loyalty program, and how to reduce members’ perceived need to use the competition. Because the study is conducted quarterly, the client is able to closely monitor trends in the member experience and program usage. This allows them to respond quickly to new issues and changes in the competitive environment, and understand the effects of its improvements to both strategic and tactical items proven to affect share over time.

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