Although loyalty programs have become widespread in the hospitality industry, it's still not clear how loyalty programs contribute to increased sales—or whether they work at all. The featured article in the February 2010 issue of the Cornell Hospitality Quarterly (CQ) focuses on how to make the most of a hotel, restaurant, or casino loyalty program. The article, "The Drivers of Loyalty Program Success: An Organizing Framework and Research Agenda," by Michael McCall and Clay Voorhees, will be available as a free download at www.hotelschool.cornell.edu/research by special arrangement with Sage Publishing, which manages the journal.

"Loyalty programs must go beyond simply looking at repeat purchases," said McCall, a professor of marketing at Ithaca College and visiting scholar at the Cornell Center for Hospitality Research. "Programs must be designed to encourage engagement with the brand, including online communities and brand-related events. The program's rewards need to provide high value to the consumer at low cost to the company."

Looking at the structure of frequent-guest programs, McCall and Voorhees note that most are structured in tiers according to customers' purchase frequency. "Businesses need to determine whether it makes sense to separate their customers into platinum guests and losers," suggested Voorhees, an assistant professor at the Eli Broad College of Business at Michigan State University. "You may need to combine tiers, develop a structure that does not involve a hierarchy, or perhaps create a structure based on common interests." Studies have found that top-level tier members are more likely to use the program to acquire luxury items, but in general, loyalty program members prefer direct rewards (that is, rewards specifically tied to the provider and its products).

Above all, say McCall and Voorhees, businesses should avoid focusing their loyalty program on price concessions. This simply converts potentially loyal customers into price-sensitive vagabonds. McCall explains some of the key points of constructing an effective loyalty program in a podcast, found at sagepub.com/.

With the February 2010 issue, CQ is observing its 50th anniversary of publication. In addition to this featured article, the issue looks at the status of brand strategy in the hotel industry, the outcomes of industry merger and acquisition activity, revenue management, and current challenges in employment law. CQ subscriptions and article downloads are available exclusively through Sage Publishing.

About the Cornell Hospitality Quarterly | The Cornell Hospitality Quarterly (CQ) editorial content is broad and publishes research in all business disciplines that contribute to management practice in the hospitality and tourism industries. The objective of the CQ is to help all those involved or interested in the hospitality industry to keep up-to-date on the latest research findings and theory development in order to improve business practices and stay informed of successful strategies.

About the Center for Hospitality Research

The purpose of the Center for Hospitality Research is to enable and conduct research of significance to the global hospitality and related service industries. CHR also works to improve the connections between academe and industry, continuing the School of Hotel Administration's long-standing tradition of service to the hospitality industry. Founded in 1992, CHR remains the industry's foremost creator and distributor of timely research, all of which is posted at no charge for all to use. In addition to its industry advisory board, CHR convenes several industry roundtables each year for the purpose of identifying new issues affecting the hospitality industry.

Center Members: Accenture • Access Point Financial, Inc. • Barclaycard US • Cvent • Davis & Gilbert LLP • Deloitte & Touche USA LLP • DerbySoft • Four Seasons Hotels and Resorts • Fox Rothschild LLP • Hilton Worldwide • Host Hotels & Resorts • Hyatt Hotels Corporation • IDeaS Revenue Solutions • InterContinental Hotels Group • Jumeirah Group • Marriott International • NTT DATA • Preferred Hotels & Resorts • priceline.com • PwC • The Rainmaker Group • RateGain • ReviewPro • Revinate • Sabre Hospitality Solutions • STR • Taj Hotels Resorts and Palaces • Tata Consultancy Services • Wipro EcoEnergy • Wyndham Hotel Group

Glenn Withiam
607.255.3025
CHR