Segmentation of Reward Program Members to Increase Customer Loyalty: The Role of Attitudes Towards Green Hotel Practices

Many organizations use reward programs to cultivate and retain loyal customers. Most programs classify customers into tiers and provide standard benefits at each level. Customers within each tier may have different psychographic and attitudinal characteristics even though their visitation frequency is similar. This study segments hotel reward program members using a matrix approach that classifies loyalty on attitudinal and behavioral dimensions. It introduces a new psychographic dimension, attitudes towards green hotel practices, which are becoming increasingly important in industry and society. Six clusters were produced and validated. All tier levels were present within each segment, and even upper tiers contained members who lacked elements of loyalty. The findings suggest that hotel companies can enhance reward program effectiveness by using a refined segmentation process that allows them to tailor benefits to the characteristics of each segment. Companies can promote sustainable practices by identifying and rewarding those customers who engage in them.