Loyal gifts and differential pricing

“There’s a Rice Krispies Treat and a bottle of water near the TV in my room,” said Dan Flood. He had just checked into the Best Western and had called down to the front desk, where Sybil, the Manager on Duty had taken the call.

“Is there a problem?” asked Sybil.

“Well,” replied Flood, “I’m a Best Western Rewards member and usually my stays are perfect.”

“That certainly is one reason why we are one of the world’s largest hotel brands with over 4,200 hotels in 80 countries,” replied Sybil.

“Right, I know that,” replied Flood. “That’s part of the reason why I joined your Rewards program. I know about the airline miles, free rooms, and the gift cards, but what I’m telling you is that somebody left a package of Rice Krispies Treats and a bottle of Aquafina on the counter near my TV.”

“That would be us, sir,” replied Sybil. “Welcome to our hotel. Oh, and if you prefer, we do have chocolate chip cookies.”

  1. When two products are identically priced, but one seller offers a frequent customer awards program, it makes the alternative seller’s product to be perceived as having a higher price. Some individual hotel operators, like those who own Sybil’s hotel, do more than their company or franchisor requires. The result is often customers whose expectations are exceeded. What are some other no-cost or low-cost benefits any hotel could offer to its “Rewardstype” members to provide even more value in their purchase? What are some no-cost or low-cost benefits any restaurant could offer to its “Rewards-type” members to provide even more value in these customer’s purchases?
  2. How do you think Mr. Flood will feel about this specific branded hotel in the future? If there were multiple Best Western franchised properties in the immediate vicinity, do you think he would return to this one on a future visit to the area?
  3. It has been said that strategic pricing means providing the right price; to the right customer; at the right time and for the right product. Rewards-type programs provide incentives for guests to return, but also offer access to the names and addresses of previous customers. How can RMs use that information in ways that help them advertise right-priced special events and promotions to their best customers?