What other businesses can teach hospitality about customer loyalty

What with Wagamama and Mowgli recently launching loyalty schemes, Deliveroo investing in an advertising campaign to promote its Deliveroo Plus scheme this autumn and the news earlier this year that Pret A Manger was to ditch its much-feted subscription model, customer loyalty is a hot topic in hospitality right now.

But I don’t believe customer loyalty exists. Recently, I was approached by hospitality tech firm Zonal to see if I’d like to work with it on a project around this very subject. I started by telling a story about my love for Honest Burgers. We have an Honest Burgers right opposite our office. In fact, if the fire alarm goes off, it’s our designated meeting point. We have a lot of fire drills.

I loved going in there. The staff were friendly, the music was perfect, and it had plants everywhere that gave a really nice feel to the place. And I had a rather specific, rather odd order. I liked to have the plant burger, but I really like bacon, so I’d always add some of that on top, too. The vegan plus meat combination could have easily been a cause for confusion, but rather than causing issues, it simply became: “Would you like the usual, sir?”

Then, near Christmas, the manager of that restaurant left to go elsewhere. And when I next went in, everything had changed. The staff were still lovely, but the music had changed. She chose the playlists, apparently. The plants were all gone – also hers, brought in from home. And, when I put in my usual order, the waiter reappeared ten minutes later with a question from the chef: “Sir, just to check, did you really mean real bacon with that?”

Loyalty is an overused term in organisations and hospitality, and it’s a dangerous one. Because if leaders believe their customers are loyal they stop trying to impress them, focusing on winning them in the first place, then gradually taking their custom for granted.

Quite simply, if you stay more useful to your customers than the competitors and alternatives, your customers will stay with you. But if someone else becomes more useful – a better product, better price, better experience, more socially desirable brand – then they’ll go elsewhere. But where you can build some sense of loyalty is through your people – as Octopus, AO and First Direct show.

Octopus Energy is taking the highly regulated energy industry by storm by empowering its team to come up with creative ways to solve its customers’ problems. Customers hated the hold music, and so now, should you be put on hold by Octopus, you’ll hear a song from the year you turned 14 – the age that, on average, a person first engages with music. Another example is the Octopus Wheel of Fortune. Every time an Octopus customer enters a meter reading, they can spin the “wheel of fortune” to win anything from 1p to £512 credit on their account, and more than 100,000 of them a month do so. This shows an understanding of the inconvenience of submitting meter readings for customers and actively recognising and rewarding them for doing so.

Another industry you may not think to look at for loyal customers is white goods, but online retailer AO is one of the highest rated UK retailers of any kind on Trustpilot. That’s in no small part down to the fact that one of its core values is: “Treat every customer like your own gran.” But, more than this, staff are supported to deliver on this promise. Stories are manifold, from delivery drivers paying for pizzas when a new oven can’t be fitted in time for dinner to local teams arranging for an AO branded van to visit a six-year-old van fan on his birthday.

Likewise, banks are about as well known for building loyalty among customers as utility firms and white goods retailers, but talk to any customer of First Direct and most will extoll its virtues. Again, this is down to first-class customer service delivered by teams supported to do so. First Direct famously “hires for the smile, trains for skill”, and then enables its teams to listen to customers and act with empathy – no scripts, no call handling time targets and calls answered by real people.

The hospitality industry has a huge advantage over others in this, as a people-focused sector with colleagues who know that customer experience is crucial to delivering a great experience. There are other complexities to this, of course (the ambition of the leadership to provide excellent customer experiences, great training, a fundamental understanding of what drives your customers’ decision making, a recognition that not everything in good business must deliver an immediate return on investment).

However, while I maintain that customers are not loyal to businesses, I do believe they are loyal to other people – and these can be your people, assuming you give them the correct support and tools.