Executive Summary
Customer loyalty and relationship marketing is a form of marketing whereby policies are encouraged that are to ensure that customers are retained as well as satisfied. The customers are also awarded for their loyalty to the company. Under the plan, Blackstone Bar and Lounge will try to focus on ways of establishing a loyalty program to reward its regular customers.
The program is intended to be applied in a way that is effective and also encouraged new loyal customers. This way, the company would be able to achieve its goals needed for profitability. This proposal outlines the various strategies that can be put in place to encourage customer loyalty and relationship marketing, which would improve the operations of the company and thus profitability is ensured. It also describes the loyalty programs applied by other companies and how customers are influenced by this rewards.
Blackstone Bar and Lounge prides itself in being an innovative and flexible company that seeks to ensure future stability and security with its finances, in the midst of ever-changing market and conditions. The company seeks to award their customers in order to ensure their competitiveness in the market and still be profitable. If the program is initiated the company stands to gain a lot from it.
This report on potential of a loyalty program will be an apt instrument that will promote the company’s goals and foster its economic success. In the end the recommendations made should be applied to ensure all of the companies’ intentions are achieved. Various considerations should be looked into to help with the adaptation of the policy and they have been detailed in the report.
Background Information
Blackstone Bar and Lounge was established 6 months ago. It is located at the Gold coast airport which is also known as the Coolangatta Airport. Blackstone Bar and Lounge mostly caters to the staffs working at the airport or passengers who frequently travel by means of the airport. Thus, they provide a large part consumer base for the company. The bar and lounge was created based from a concept developed by a local successful restaurateur who saw the need of integrating a full dining service bar and lounge in domestic airports located within Australia. Most of its competitors do not offer table service as it does making it be at a competitive edge in the market. It is also focused to remain competitive based on the uniqueness of its operations.
The menu at Blackstone Bar and Lounge is inclusive of breakfast, lunch, dinner and tapas. They are offered seven (7) days a week. Furthermore, the restaurant is open from 5AM. The menu consists of modern Australian dishes, as well as traditional offerings. The menu caters for celiac diets and vegetarian customers. It also offers a wide range of hot and cold beverages that pair with the cuisine. An extensive wine list is also available including popular vintages of some fine Australian winemakers, as well as French champagne and New Zealand icons.
Aims
The main aim of the company is summarized in its mission statement whereby it is to offer an original menu developed by Andrew Charlton who is a local restaurateur. They intend to use the freshest ingredients possible and deliver a dining experience that is fast and unique in its own way at an airport located in a scenic seaside locale of Queensland. Thus, information related to finding an effective Customer Relationship Marketing strategy will have to consider all these factors.
Scope
The report entails the Customer Relationship Marketing that would cover all customers that require its services and are in attendance on a frequent basis. Based on the time limits the customers would spend in the bar and restaurant, it was only acceptable to ensure that they were quick in the provision of services. The bar and lounge usually deals with customers that have busy schedules thus they have to cater to them in an efficient manner and provide swift services.
Managing Value through Loyalty Programs
According to the marketing concepts applied, relationship marketing is mainly focused on the needs of the customer which have to be satisfied and given optimal preference. Traditionally, marketers felt that satisfaction of the needs of customers is too costly and unrealistic, and they only considered the needs of the general market. As marketers, they felt like it was hard to provide for the needs for each and every customer who came to the establishment and thus, it made sense focus on the needs of specific customers. This will, therefore, enable them to be effective to ensure customer loyalty with the company. Furthermore, it would also lead them to attain more customers as the loyal customers would tend to refer the company to their friends, family and colleagues (Andrew 2006).
Customer loyalty program is a marketing tool that is put in place and is expected to work in the long-term. Thus, the company’s management is expected to provide all the support required for it so that the intended results by the program are achieved. The top management should ensure that the program is implemented successfully and new ideas are added to it. If the program is short-term, customers who are trying to enter into the loyalty program will feel cheated since the program stopped and they were trying to be part of it. Employees at Blackstone Bar and Lounge need to practice and convey the intentions of this program to the customers (Annekie 2009).
When a customer arrives at the company’s premises and belong to the loyalty program, they should be given special treatment. The treatment should not be entirely different from the other customers but should be preferential in nature. The customer would actually feel fulfilled to actually have been in the program. The employees have to understand the idea behind the concept which ensures that it is applied as intended. The basic principle is to create loyal customers because of the value benefits they attain and also the special treatment they get (Andrew 2006).
Access to the program for new customers should also be ensured. This would prevent frustrations that may arise if customers experience difficulties when it comes to being part of the program. This in turn, would negatively affect customer loyalty. The loyalty program would also increase the brand loyalty and recognition of the said company which in turn leads to an increase in customer base. It should be competitive but easy to join the loyalty program thus the rewards will be considered paramount (Kremler 2009).
Customer Benefits and Sacrifices in the Value Equation
There are various benefits for having a customer loyalty program. The services will be improved as more customers would visit the Blackstone Bar and Lounge which in turn results in an increase of profits. The company would be able to increase its customer base and compounded with its aim to start another business in Brisbane airport. The owner Andrew Charlton has already contacted the directors of Brisbane airport which is only one hour from the Gold Coast, and in the future, he wants to expand throughout Australia and New Zealand as well, therefore, its potential to have a larger market share. The competitive force of the company in the market will be increased (Hennig 2001).
The loyalty program would not only give us a different level with our competitors but also act as a point of reference to potential customers who want to find the best services that suit their needs. Through word of mouth from customers who are already in the program, they will be able to influence more customers to visit us thus also increase the number on customers included in the loyalty program. Therefore, the presence of customers in the loyalty program will actually be as a marketing tool as they will help to advertise the company and its services (Butscher 2002).
One of the risks taken is that customers would not always be loyal, but the company should ensure that is not the case. They may be part of the loyalty program by this company and also be part of the loyalty program of competing restaurants. Services provided should be competitive and of better quality which makes the company better placed to have loyal customers. There is also the issue that most customers are travellers thus it would be hard to determine who among those deserves to be include in the program. Since most of the customers are comprised of staff from the airport, they are bound to gain more from the program as compared to the travellers (Bryan 2001).
Furthermore, with the implementation of a loyalty program the company has to trust that in the end it will be advantageous to both the company and its loyal customers. Both should gain from it and the company should not be faced by losses. Thus considerations about what the loyal customers stand to gain should be made. For instance, if a customer spends more money on the services offered over a period of time they stand a chance to be included in the program. This also means that part of the profits resulting from the services could actually be used to rewards the customer but still not affect the running costs of the company. It is not certain if the costs of the benefits are worth the costs. The short- term revenues from the loyalty program could be exceeded by the long-term obligations to the customer and liabilities, the company would have (Bertwistle 2010).
Benefit of Retaining Customers
The company shall set goals and monitor performance of the customer services department in an effort to maintain an upbeat relationship with customers. These goals will be on the basis of how promptly the firm responds to customers’ inquiries. The company will monitor the performance in terms of whether the response time meets the set goals, and management may increase the number of customer service staff to meet these goals. The key target for relationship marketing is the retention of customers. Thus, the company has a repeated patronage over each customer it has. It is behavioral in nature thus it is up to the company to influence the customers to be coming back, and the best was being by use of loyalty rewards (Roy 2008).
It has been argued that if the company retains more customers then it leads to reductions in the costs of production and sales also increase. The costs of production reduced since the company is not forced to spend on such factors as advertising in order to acquire new customers. The loyal customers would act as unofficial advertising agents of the company by encouraging people to come and experience the services of Blackstone Bar and Lounge. Thus, profitability of the company would result from decreased expenditure as time goes by and positive word of mouth through loyal customers (Verlag 2007).
The company should also ensure that their services improve with time so that its customers realize the change. If it remains stagnant without change, the customers would be discouraged to be a part of it. This would make it harder for them to retain their customers leading to losses in the company (Howard 2008).
Results of the survey on loyalty program
I conducted a survey among the frequent customers of Blackstone Bar and Lounge in order to get their views on the loyalty program. I conducted this survey, and it was based on information from seven (7) customers of the company. The seven were composed of both travelers and the staff that worked at the airport because both groups were the largest percentage of customers served by this company. I was able to realize that these people would feel more encouraged if we had a loyalty program. Besides the fact that some of these customers were members of loyalty programs in other companies, they saw the need of Blackstone Bar and Lounge has its own program. A few were not aware about what a loyalty program is, but once I explained it to them, they felt that it was a very positive effort by the company as that way, it meant that the company considered the customers important as well. They were also willing to be loyal customers so that they could finally use the loyalty program.
Since most of them were frequent customers, especially the staff at the airport, they were sure to be included in the loyalty program. They felt encouraged, as the program would benefit them with rewards based on their frequency to the establishment. Thus, most of the respondents considered Blackstone Bar and Lounge a rewarding company, which appreciated the efforts of its customers. The customers surveyed also had their doubts. One of their fears was how the company would rate somebody as a loyal customer and what criteria would it use to award them. They were also pessimistic about the awards that they would receive from the program. Most of these fears were reduced when explained to them that we had efficient computing systems that would record their activities within Blackstone Bar and Lounge. Thus, a summary would be availed and analyzed which is used to determine who deserves to be included in the program and the awards they would receive in the end.
Loyalty programs in other companies
The loyalty programs that Blackstone Bar and Lounge intend to apply have been in existence in other companies. These programs have had various effects on these companies thus the effect on this restaurant would be determined and influenced as well by the output they had on the other restaurant companies. An example of a company with an effective loyalty program is the Hilton group of hotels. They have Hhonors whereby they award their long-term members. Thus, this company benefited as previous owners tend to choose it over other competitive hotels as they are aware that they will be awarded on their loyalty. This program also worked best because the services offered by this hotel chain have a high margin that a customer will invest in over a period of time. Furthermore, the Hhonors encouraged brand loyalty by the customers, reduce people’s price sensitivity thus it made people harder to be convinced by other competitive firms. They found it to be easier to retain their customers since they had encouraging policies put in place. It enabled the Hilton hotel chain to achieve a larger customer base.
Sol Melia hotel is also another applicable example of a company with a customer loyalty rewards program. It is an international hotel where the headquarters are located in Spain. It has a customer loyalty rewards program where each and every customer in any of its premises is awarded points. Every time a customer stays in its hotel, they are awarded points for the stay, determined by the amount of time spent in the rooms or the spending made. Once the points have accumulated, they can be redeemed for other benefits such as airline mileages, discounts for rental cars as well as membership points of credit card services. This rewards scheme encourages their customers to gather points in order to be able to attain the rewards. Besides that, the hotel chain will be able acquire new customers once their rewarding efforts are realized.
Conclusion
It is prudent for the management of the company to adopt and implement this report, in order to propel the firm to a high level in terms of marketing, and ultimately profitability. This plan is open and flexible, and management of Blackstone Bar and Lounge may make several appropriate changes to it during the implementation strategy. There are various observations that make customer loyalty and relationship marketing a crucial aspect to be considered by the company. Few companies have applied this strategy. Thus, this makes the company be at an advantage to adapt such efforts. The results will be appealing as it would have a positive influence on the company. Based on the survey done, it can be concluded that many customers appreciate such efforts making it a worthwhile concept to be adapted by this company. From the survey, most of the customers questioned felt the need that the company should adapt a customer loyalty rewards program.
Therefore, as the manager I can conclude that the loyalty program has a huge potential in our company once it is started. It will be advantageous to the company in the long run.
Recommendation
The company should adopt various strategies to award customer loyalty. The company would be the first to offer such an award strategy towards its customers making it advantageous and also would lead to profitability. Factors that need to be considered to prevent failure of the method are by ensuring that it is easy for customers to be part of the systems. The company should also ensure that the rewards are of high quality and customers registered for the loyalty program can access their rewards easily. Thus, customers should find it easy to be given what they have earned as rewards. The company should also ensure customers do not have to spend more finances in order to receive the award as the customers would perceive this as being unfair to them making them frustrated. This would make them feel like the company was extorting money from them. Furthermore, the company should not increase their costs making their services expensive. This was, customers would be maintained.
The rewards should also be equally distributed in that only those who are loyal get to be awarded, and the awards should be of equal value. If this is not considered, then the customers would tend to be envious if they notice that other customers have better rewards than them which discourage their participation in the program. There should also be a pre-determined rewards scheme where a specific award is awarded if a customer attains a particular goal set by the company.
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