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Enhancing loyalty: spotlight Japan

Japan has long been one of Asia’s most mature travel markets, in terms of both domestic and outbound tourism. The country and its travelers also quickly established norms for themselves, and during the 1980s helped to influence global hoteliers to make adjustments to their offerings to accommodate the increased number of Japanese business and leisure travelers to North America and Europe.

Today, although rarely cited for hotel luxury, Japan remains a standard bearer for service. Polite and prompt, service at even mid-range Japanese hotels is superior to similar offerings in almost any other country or territory.

When it comes to loyalty and loyalty programs, Japan has its own characteristics. Like any other market, the price of services such as hotel rooms, flights, and rental cars is important, but as indicated in the interview below, travelers will spend time thoroughly researching their options before making a choice, a choice they are more likely to stick with once made. Therefore clear explanations of loyalty programs on websites and other promotional material are important to present upfront, so that they can be part of the research and decision-making process. To find out more about guest expectations and loyalty, we spoke to Khalil Maaouni, Head of Digital at Mystays Hotel Management.

What kind of incentives or rewards is the Japanese travel client looking for from loyalty programs?

The main motivator always revolves around savings and discounts. That said, in the service (and mostly travel) industry, it also revolves a lot around questions like: Does it fit my mindset? My lifestyle? Does it represent me as well? It’s a community identifier, especially when part of a higher [loyalty] rank with an airline. One would have to say that Japan is one of the most dynamic markets when it comes to growth of loyalty markets. Points are actually used like currencies. They are very liquid. You can transfer points from one system to another. This is at the core of the Japanese loyalty industry. Gaming also helped setting this up. People look at savings in a much different way than in other markets. The points you get from booking your trip can be used to pay for groceries, and vice versa.

Tell us about the type of CRM systems, both software and non-software, that you employ.

Something that is very different from other markets is the level of quality. With or without CRM, you will get good service in Japan; it’s a given. If you aren’t delivering, you are out of the picture. Enhance the experience for the user—make his or her life easier. For instance, make the rewards more liquid, bring it online, provide the [loyalty] currency. For a chain like ours, we are a lifestyle-focused, stylish business hotel at the core, so we have resorts, but most of our hotels are limited service hotels. Still we provide small touches, such as remembering what our most loyal guests’ preferences are: give them the room that has a mountain view, or a second floor. Those kinds of details matter. We don’t have a lot of staff on the front line, and so we don’t want CRM to be a burden. We just want them to take the information that is necessary and turn it into the right service for our guest. That is what a CRM system should be providing and what we are working to deploy at the moment.

How concerned is the Japanese customer about privacy? How much are they willing to share online to improve their own experience?

Japanese guests will not share their private information with you easily. You have to build a relationship based on trust, which means a long-term relationship and no shortcuts. This requires doing a lot of research upfront, BI work, and turning the learning into outreach strategies. The system we are aiming to build is based on getting more and more information over time, by providing additional services, asking incrementally, doing things that are common sense but are often forgotten by marketers. Some examples would be helping the customer log in to WiFi, adding benefits and access to campaigns. Of course we would not get the whole picture all at once, but what is missing will come from the front desk at the next check-in. This is all about permission marketing.

To which methods of data collection do Japanese customers best respond?

Definitely not SMS. That goes into their personal space. But email opening rate in Japan is much, much higher than other countries. [The Japanese] do not subscribe to things until they have given it significant thought. With good reason, they would be very upset when they get misleading or unsolicited communications. They will contact you if they really want it, so it is a lot about respecting boundaries. But that also means that they will call you and ask for you to maintain their privacy if you overstep.

All in all, marketers must keep an open channel of communication leveraging our privileged access to our guests at the hotel. We host them and we can know them by name and know their preferences. This information should find its way in more automated communications and this is where email comes to complement the journey, bringing higher ROI.

Now we are also working on personalization beyond CRM and emailing. This can be achieved through website customization, triggered through location and behavioral data. All marketers will soon be able to bring an Amazon-like experience where we tailor an offer or even a page flow to match the need and the device of the user. Our guests might need a hotel tonight because they missed the last train and they definitely do not want you to present them a resort at the other side of the country. The secret here is to read the situation the way our staff does on a daily basis and find what our guests need without them asking. People can provide without asking—so should algorithms.

How does the Japanese customer behave and react in contrast to other Asian travelers?

Overall, I would say they are extremely different from other groups or audiences. Japan is an island so people here have their own habits and move at their own pace. In China, B2C communication goes mostly through WeChat. On our side, in Japan, the guests are keener to be reached in a traditional fashion, with deference. And as much as our guests hold advanced habits when it comes to virtual currencies and loyalty programs, they are not so when it comes to mobile payments and O2O integrations; moreover, most payments are still done in cash.

Japanese are also very diligent and dedicated employees, they all take short holidays at specific periods to make sure that their absence is not a burden for others. This obviously creates high seasonality factors—driving prices up at Golden Week or Obon—but this is also compensated by the high frequency in business travel necessary to the functioning of a centralized economy revolving around Tokyo, or the specialized poles in the regions. This duality truly shapes our brand and the overall travel market in Japan (limited inventory for an ever-growing demand).

It is also very easy for guests to cancel one day prior to the stay and switch to a better deal if available. While traditionally the Japanese guests would book early (fearing that they would end up without a room), the growth of OTAs and Metas is driving guests to be more spontaneous, switching accommodations very last minute, and this definitely has become more demanding on us hoteliers. This is I think where CRM and home grown loyalty programs come in with intangible benefits and turn the traveler into a loyal guest. The good news is that once a habit is earned by a customer in Japan, it is hardly forgotten.

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