It costs 7 - 10 times more to recruit a new customer than it does to retain an existing one. Some would argue that every guest should be treated the same. I disagree. A good and loyal customer should be treated differently. Not better, but differently.
When speaking about regular customers, legendary restauranteur Charlie Trotter said, “We know more about them; there should be an incentive to being a regular customer.” The more you know about your guest, the better, more customized service you can provide that guest. There are plenty of customer relationship management software tools out there, or if you do not have those, a simple database in Act, Excel, or Outlook will work as well.
It's not just hotels and restaurants that can benefit from this practice. Doctors, accountants, car washes, grocery stores... any service oriented business should be looking for ways to build vital connections. In hospitality, the reservation process and check-in experience is a two-way street. We are taking information from our guests, but we should also be gently probing to learn the reason for the visit, preferences, and possible needs during the stay or the meal. This gives us cues and clues as to their expectations and needs.
Sometimes there is a temptation to go overboard for a returning guest or VIP. If you've done your homework, you'll know who will be happy with “Hello it’s nice to see you again, we’re glad you’re here” and who wants a visit from the Chef.
Here's an example. Last summer I received a call from a friend who was traveling to one of our cities for a family funeral. Clearly shaken by events, he asked if I could make a reservation for him at our hotel. He's a regular customer at most of our properties but had never been to this one. Of course I was eager to help him. As I was discussing the reservation with the GM, the question of rate came up. The GM was getting ready to give him a super-discounted rate. But that is not what my friend was looking for. He wanted attention... he needed attention... and he had earned attention by virtue of his many stays at our other hotels. He gladly paid top dollar. For him, it was about the connection. Once he and the GM met, I stepped out of the loop and a new loyal customer was born for this property.
In my opinion, time - not money - is the most precious commodity there is. You can earn more money. But once that particular Saturday night is gone, it's gone for the ages. Returning guests are not only spending their most precious commodity on you, they are not spending it on a competitor -- and if you treat them properly, they never will.