How to Understand and Implement Favor Enhancement

An article in the Sunday New York Times magazine (June 21sT: – Rob Walker- 2009) entitled “Favor Enhancement – Real Gratitude Can Be Profitable. How Then To Create It?” dealt with a new concept in the process of enhancing the total customer experience and so drive loyalty.

It refers to a program introduced by Hyatt Hotels whereby employees are empowered to provide random acts of generosity by picking up a guest’s bar tab, or paying for their spa treatment, for example. The argument being that something that is given as a surprise and out of the blue manifests itself in feelings of loyalty almost through “guilt” on the part of the receiver.

This is an interesting approach for two reasons: one would be the act of unexpected generosity for the customer and how that can lead to them being loyal advocates and another is the extent to which this empowers and engages the employee and the effect that this could have on employees themselves being passionate loyalists of the brand. Two significant objectives in the path to enhanced customer experience and loyalty achieved through one initiative.
Hyatt Hotels’ CEO, Mark Hoplamazian, introduced this initiative not by accident – this was designed based on months of consumer research; the final rationale being that these random outbursts of generosity will “leave the customer not just pleased but also grateful”.

Furthermore, a paper in the Journal of Marketing also picked up on this approach. The argument being that Gratitude can “increase purchase intentions, sales growth and share of wallet”. Robert Palmatier was one of the authors of the paper and he points to a number of examples of the power of surprise such as Zappos.com, an on-line shoe-seller that helps customers find what they want elsewhere if Zappos doesn’t stock that particular item and/or brand.

It is also important the way the initiative is presented to the customer and this, no doubt, takes a certain amount and type of training and coaching for the front-line staff. The article adds: “If a favor seems to be a function of the free will (as opposed to company rules) “you have more desire to reciprocate” Palmatier says.”

The article also points out that traditional customer loyalty programs are based on something you have to do and something you have to “earn” to receive your loyalty points and free goodies. These kinds of initiatives move out of that “earned” loyalty space and into “generosity driven” loyalty. The argument being that this approach could have greater power. So, long-term ROI may be more significant.

I would be interested in your thoughts and comments on the pros and cons of this approach. Let me know what you think and if this resonates with you. If you were a guest would you welcome this approach or find it “forced” and insincere?

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