Marriott VP Thom Kozik: Loyalty Is ‘Absolutely’ A Dated Concept
If you think rewards alone can win customers and combat showrooming, you’re behind the times, Kozik says.
The goal of every brand is to get customers to prefer them to competitors — in other words, to keep them loyal. But Thom Kozik, VP of global loyalty for Marriott International, has some bad news for companies who hope to accomplish this by running a rewards club.
“Loyalty is absolutely a dated concept,” Kozik said at Forrester’s CX NYC event following a presentation on customer experience. Focusing on “[the customer’s] loyalty to a brand doesn’t work anymore; it needs to be about our loyalty to them.”
Points Are Passé
In the digital age, Kozik elaborated, Marriott customers are merely one click away from hundreds of other hotel brands — not to mention AirBnB and upstart competitors. This is true outside the hospitality space as well, of course; practices like showrooming have put the nail in the coffin for plenty of brands that once relied on longtime customers continuing to show up in their stores.
Essentially, Kozik’s view is that generic points-based rewards programs are not enough to keep customers coming back; in the on-demand era, personalization and individual experience are what win the day. Consumers want upgrades and offers that are tailored specifically to their needs.
This echoes the argument made by hospitality analyst Loren Gray in an interview with GeoMarketing earlier this year. “Membership is a failure for younger people on an operational level,” Gray said. “They don’t want rewards far in the distance; immediacy is key. If they’ve visited several times, they want to see something for that – otherwise they don’t care.”
So, how can brands meet this challenge?
Customer Experience Is King
It begins, Kozik posited, as many things in the mobile world do: with building a holistic view of the consumer.
“The discussion shouldn’t even be around loyalty,” he said. “It’s around customer experience.”
This requires brands to go the extra mile with studying and understanding their consumer base. Demographics, location, frequency of visits, and more matter when it comes to crafting the personalized experience that keeps people engaged in the face of a host of options.
Secondly, it requires connecting touch points: Customers should be rewarded for a series of actions, from engaging with a brand on social media to making a purchase in a store. Online and offline behaviors don’t and shouldn’t exist in separate silos.
And in terms of hospitality loyalty in particular, “I spent 10K at [a Ritz-Carlton property] over two years,” Kozik explained. “But according to Marriott, I didn’t exist because I didn’t spend a night in a bed. Marriott makes money off of restaurants, spas, and golf courses… to not consider those purchases as part of loyalty is a big disconnect. We have to reconnect all of the touch points.”
And finally, as GeoMarketing’s David Kaplan wrote last week, brands must prioritize “customer relationship management.” This can include typical loyalty features like recognition when someone walk into a property, but it’s also more than that; it’s personalized communication through text or email, quick responses when a customer makes a request in person or via a device, and providing a sense that the relationship is valuable to the business, not just the consumer.
“Our customers sleep with us,” Kozik joked at the end of his session. “You can’t get more intimate. If we pay attention, we can know their needs more deeply than anyone.”