Download - LLB template

Learner Log BookLLB

Copyright 2007 e-TQM College. All rights reserved 1

I. INSTRUCTIONS

The purpose of the Learner's Log Book (LLB) is to document the achievements of the learner in a central repository that will be considered as evidence on the effectiveness of the learning process. It is a 'monitoring tool' that e-tutors use to report on individual learners' progress and it is a way of ensuring that learners: Are engaged in their learning process. They are experimenting by doing the tasks subscribed to them by the e-tutor. Avoid plagiarism because learners have to be engaged on a continuous basis and the informal assessment can therefore be used to ensure consistency with the main formal assessment. Provide e-Tutors with the opportunity to get to know the learners evaluate them and mentor them properly. There are templates which will reflect whether learners read, whether they understand, whether they assimilate the knowledge, whether they develop enquiry ability, whether they have the potential to conduct critical thinking and whether they can reflect on the knowledge accumulated by relating to real situations.

The onus is mainly on learners to furnish the required information in the templates after each unit based on the Read and Analyze Activity. After filling the information in the template they need to e-mail it back to the e-Tutor.

e-Tutor will then comments on the work done and the involvement that takes place and give overall impressions on the learners at the end of the module.

II. GENERAL INFORMATION


Learner Name: Aldina El Halabi

ID Number: 200004293

Course Title: Customer Relationship Management

Article Title: Hotel loyalty programs: how valuable is valuable

enough?

Date of Submission: ------------ September, 26. 2015 -------------------

Date of Received Feedback: ------------------------------------------------

III. SUMMARY (100-200 words)

Provide a summary in your own words on the article you requested to read and analyze in the following space.

The extensive study on 15, 000 respondents was conducted with aim to examine the customers’ perceived value of hotel loyalty programs, and identify the relation and effect between perceived value and active loyalty.

Significance of the study is that it explores under-researched topic of principles of loyalty program practices and drivers of active loyalty in hospitality sector in US. Also significance of the study is due to the nature of findings – primarily, findings on impact of perceived value, namely psychological value on active loyalty and difference between financial and externality value of loyalty programs. (Xie and Chen, 2014).

IV. KEY LEARNING POINTS

Identify the key learning points in the read and analyze assigned activity.


The key learning points as identified in the article are as follows:

Most brands develop rather unsuccessful loyalty programs copying other successful ones irregardless of their target market or unique offering. There is a large similarity in loyalty programs in the industry. It leaves a lot of space for differentiation. (Sharp and Sharp, 1997; Wansink, 2013).

Many customers hold membership to many programs as they are loyal to deal seeking, instead to a brand.

More successful strategy is to develop programs targeting niche customer markets. DeWitt and Raha note that most high-end hotels are now tracking repeat likes and dislikes so to custom prepare rooms for loyal customers (2007).

Strategic goal of loyalty programs should be active loyalty. Perceived value (a trade off between what customer receives with

product/service and what they pay for it) has a direct impact on active loyalty. Psychological value (ex. special incentives, privileges, better recognition and

easier upgrade to higher tiers) plays a large role in active loyalty. Despite the existence of many loyalty programs, customer loyalty is eroding.

V. RELEVANT STATEMENTS TO THE SESSION

While you reading, identify the relevant statements to the session and insert them in order in the following space.

Relevant statements to the course sessions are as follows:


“Loyalty programs comprise a commonly practiced marketing strategy to maintain customer relationships and generate return business” – related to CRM definition, Loyalty definition

“Loyalty programs are meant to not only ensure customers’ retention but also to encourage active purchases” and “Ultimately, hotel loyalty programs are crafted to attract customers’ active loyalty rather than their passive membership, as they seek to dissuade customers from shopping around for other alternatives and thus dissipating their spending force on the hotel”– in relation to attitudinal and behavioral loyalty.

“perceived value of a hotel loyalty program is a bundle of tangibles and intangibles and differs in configuration across hotel brands” – in regard to “hard and soft” benefits of loyalty programs (meaning tangible and intangible).

“A valued loyalty program can increase repeat purchases and customers’ willingness to pay price premiums” – loyal customers become less price sensitive over time.

“The perceived program value has four dimensions: (1) functional value; (2) psychological value; (3) externality value; and (4) financial value.” –mirrors 4 value dimensions of loyalty programs as thought in course where convenience and flexibility of terms and conditions are regarded as functional value; soft benefits such as intangible and emotional recognition make psychological value; benefits transmitted through external parties make externality value, and hard/tangible benefits are classified as financial value.

“Loyalty programs cost about 5 percent of the gross profit to run, administer and operate” – in regard to the cost of loyalty programs including marketing cost, cost of employees training, call centers and technological support.

“The findings demonstrate that loyalty programs are not a one-size-fits-all solution. Rather than designing another copycat program based on industry convention, this study suggests that hotel administrators review their loyalty programs from the strategic perspectives of their customer base and the need for differentiation in the marketplace. To better identify the niche of the market for which loyalty programs could be differentiated, this study suggests that hotels address the stimulus-response system of their targeted consumers, based on actual behavioral data over time.” – correlates to the customer- program fit concept discussed in class sessions.

VI. CRITICAL ANALYSIS

This is the most important section in your analysis. To complete it sucessfully, learner is to consider the following guiding steps:

Present arguments coherently , supported by evidence and facts to substantiate on why you may take a particular stance and/ or


position towards a particular approach whether against or in support of it;

Capable of bridging the gap between the theory and conceptual work with the application under consideration.

The paper leaves us with a valuable insight, particularly on two key components - perceived value and active loyalty.

The paper findings indicate that even though most programs are similar in structure and rewards, they are perceived differently by consumers. This leaves companies with task to understand their target customers and tailor programs that suit customers’ needs. In other words, there is a necessity of understanding consumers’ cognitive and affective processes that drive overt behavior and trigger both attitudinal and behavior loyalty. This underlines importance of research, evaluation of customer feedback and active engagement on social media making understanding customers and tailoring loyalty programs to match an imperative. It leaves us with a important takeaway – instead of copying competition programs, better strategy is mirroring customers’ needs and pursuing differentiation even through loyalty programs.

Another valuable insight comes from analysis of relation of perceived value and active loyalty. Paper identifies an active loyalty (active and positive engagement with the brand, namely active purchasing, and reluctance to shop around for different options) as a key strategic goal of loyalty programs. “The widespread use of loyalty programs in the tourism sector raises questions about their differentiating capacity and more broadly about the real advantages they offer firms” (Hikkerova, 2011). So what is the factor that offers real competitive advantage that is hard to be copied? Paper identifies psychological value as the primary driver of active loyalty; it correctly identifies psychological value as a large area where companies can differentiate. While financial, functional and externality value can easily be copied by competition, people tend to remember how you made them feel. If loyalty program differentiates on psychological value, they are more likely to achieve the goal of active loyalty, given their performance is satisfactory.

Overall, the paper is a comprehensive study with relevant findings. It clearly identifies positive relationship between psychological value and active loyalty. Its findings and recommendations are highly applicable in hospitability industry.

VII. PRACTICAL IMPLICATIONS

How could you apply the subject matter from the article in a real business case?

Findings and implications are highly applicable in creation of loyalty programs in hospitability

industry. Let’s say I run a hotel that specializes in medical tourism. Its location is near the major


hospitals; among other facilities it has a pharmacy on its premises, and its spa offers therapeutic

massages and healing rituals.

In designing the loyalty program, we would have to understand our customers first. Just because

another hotel loyalty program offers a free manicure and pedicure for every XXX amount spent, it

does not necessarily mean we have to copy the same offering. Our reward system should match

our customers, and our business specifically. In this case appropriate reward would be an offer of

complimentary therapeutic massage or thermal spa facilities for XXX number of nights spent in the

hotel.

Additionally, customers do not value only hard rewards. As stated in research, psychological value

is a key factor in customer active loyalty. Otherwise customers would only shop around for a hotel

that has lowest fares and satisfactory service, or best functional and financial rewards. Therefor, it

is best to add soft rewards, such as ease of accessing higher tier and better recognition than non-

members ex. no blackout days or timings for redeeming rewards.

VIII. LEARNING REFLECTIONS

What have you learnt? Critical thinking is about lessons learnt to be drawn from the analysis.

This report provided us with important takeaways:


Strategic goal of the loyalty programs should be active loyalty – the one that includes increasing purchases, less price sensitivity and reluctance to shop around).

The loyalty programs should be created to suit business target customers and business offering.

They should be competitive on functional, financial and externality value. They should differentiate in psychological value in order to achieve active

loyalty – exploring psychological rewards leaves a large space for differentiation.

Perceived value, namely psychological value has positive relationship with active loyalty.

IX. e-TUTOR COMMENTS AND FEEDBACK


Mark:

References:

DeWitt, M., & Raha, M. (2007). Postcards from the edge. Business Forms, Labels & Systems, 45(3), 22-22,24,26. Retrieved from http://search.proquest.com/docview/216440273?accountid=33317

Hikkerova, L. (2011). The effectiveness of loyalty programs: An application in the hospitality industry. International Journal of Business, 16(2), 150-164. Retrieved from http://search.proquest.com/docview/887283480?accountid=33317


http://search.proquest.com/docview/887283480?accountid=33317


Lijia (Karen) Xie, & Chih-Chien, C. (2014). Hotel loyalty programs: How valuable is valuable enough? International Journal of Contemporary Hospitality Management, 26(1), 107-129. Retrieved from http://search.proquest.com/docview/1467805835?accountid=33317

Sharp, B. and Sharp, A. (1997), “Loyalty programs and their impact on repeat-purchase loyalty patterns”, International Journal of Research in Marketing, Vol. 14 No. 5, pp. 473-486.

Wansink, B. (2003), “Developing a cost-effective brand loyalty program”, Journal of Advertising Research, Vol. 43 No. 3, pp. 301-309.

