It may translate into housekeepers in New York, Hong Kong and Dubai, across a chain of luxury hotels, knowing that you like an extra pillow without your having to ask. You may get invited to a complimentary nine-course meal at a five-star hotel because your bank has noted your love of food from credit-card spending patterns. Or your buying a Ferrari may result in your partner being invited to a fashion show by a luxury brand.
For the upper-crust consumer, a loyalty programme is not transactional or explicit. Instead, it hinges on a better understanding of the consumer’s interaction with the company: transforming big data into smart data to deliver service that wows you into staying loyal.
Brands today have tremendous information on consumer behaviour. A credit-card company can not only predict your annual travel patterns based on tickets but also tell whether you are going home, on a business trip or a vacation, based on your booking a romantic dinner or rental car. A luxury hotel may know that you ordered decaf after your last ten meals or if you like to sleep in late. The challenge now is how to use this information.
“Insight that is not actionable is useless,” Dion Maritz, General Manager for the Middle East at ICLP, a company specialising in loyalty marketing and customer relationship management, tells GN Focus.
“Big data makes the level of detail possible that is going to be an interesting path ahead for luxury brands. Consumer insight is key to luxury brands. The challenge is to understand what information matters to us — that sets your data strategy,” he adds.
Ultra-high-net-worth individuals are crucial for luxury brands in the retail, airline, automotive and hotel industries. There is a reluctance to introduce published point-based loyalty programmes, which would dilute the brand.
Instead, there is more focus on customer relationships to engender loyalty.
We know you
“About 35-50 per cent of our consumers belong to the premium category, depending on how high-net-worth is defined. Loyalty or reward points are one part of our value proposition to our consumer,” R. Sivaram — Senior Vice-President, Cards Business Head at Emirates NBD, tells GN Focus.
Experiential value propositions to clients at Emirates NBD have included invitations to a complimentary nine-course dinner at The Ivy restaurant at Emirates Towers, a private sale by online premium brands, shopping clubs and classical music concerts. Success lies in knowing which consumer is likely to be interested in which event.
“Our Bon Appétit programmes involve private events with about 50-100 customers. When we send out an invite to about 400 people, we close in 25-30 minutes. We don’t send out invites to all our customers in that segment. Sometimes our merchants give us parameters based on what kind of brands the customer interacts with. We use profiling to segment them, which is why we have a very good hit rate.
“We do not have a database of events that you like, but we know where you have used the card, so we can create a profile based on that,” says Sivaram.
Big data has recently been defined in IT terms as “high-volume, high-velocity and high-variety information assets that demand cost-effective, innovative forms of information processing.” This includes what customers say about products on social media. However, even a layman who can use a search engine knows that having data is not the same as using it.
Luxury hotels, due to the individualistic nature of their service, have traditionally been pioneers in using data to improve services. “Hotels know you better than anyone else. They are exposed to your personal habits. But even those who capture them are not always able to make use of them,” Nikhil Nath, CEO, Knowcross Solutions, a software products company focused on the hospitality industry, tells GN Focus.
Nath’s company has several products that enable hotels to extract relevant data for different types of hotel staff based on their functional area.
“The app, called Triton, is on the cloud, which means that no matter where you stay within the chain of hotels, your experience will be known,” says Nath. “Our app pulls up the guest profile in just a couple of taps and immediately highlights the person or piece of information relevant to their function. If a guest complained about something during his last visit, there would be a symbol on the app that indicates “handle with care”. The staff may not have time to read all information about the person, but they can quickly know if there are any red-hot buttons to be careful of.”
The Housekeeping app developed last year by Knowcross, whose clients in the UAE include Kempinski and Hyatt, has proven very popular with luxury hotels. Enabled on housekeepers’ smart device, it lets the user access guest preferences. If the guest has stayed at any of the hotel’s properties in the past, the app can tell if he likes an extra light on the desk, or two pillows on his bed.
We see you
A 360-degree view of the consumer is now being sought across industries. The past couple of years have seen UAE-based banks such as Mashreq and ADCB transform their loyalty programmes to offer points at all consumer touch points — you can collect if you take out a loan, shop for groceries, or buy a ticket using a product from the same bank. At luxury hotel chains and airlines too, more investment is being driven into recognising a repeat customer.
Nath says, “It’s the oldest rule in the industry: it is easier to attract someone who has stayed with you before than trying to bring in a new guest. The cost of acquiring a new customer is higher. Our strategy is simple: You may not be a luxury brand, or you may not have a loyalty programme, but we are going to give your guest, if they stay with you more than once, the automatic capability to be recognised no matter where they show up in the chain.”
The next smart thing
Specifically in the Middle East, says Priyanka Lakhani, Loyalty Planning and Business Development Director at ICLP Middle East, this practice of consumer recognition acquires a new dimension.
“Our recent research of the affluent segment shows that consumers are being more and more promiscuous. They are likely to switch to competitors for reasons to do with value for money, prompting companies with multiple brands under one umbrella, such as Al Tayer in the UAE, to create inclusive luxury programmes. In the Middle East, this is a unique situation because we have a number of family-owned multi-franchise brands. They have a strong understanding of customer behaviour across labels,” she says.
With Al Tayer’s Amber, a customer can get points on automotive shopping — unheard of in traditional loyalty programmes. Partners include brands represented by the group in the Gulf, such as Alexander McQueen and Armani Dubai Café.
Data has always been at the centre of loyalty. Social media is key for luxury brands because of their inherent brag value.
Maritz says, “Consumers of luxury brands tend to be advocates. They talk about these brands because they are connected to who they are. We now look at social data from a business point of view — when data tells you a person’s worth. We are trying to place commercial value to social data and social influence because it translates into commercial benefits.”