Building customer relationships: do discount cards work?

Andrea McIlroy and Shirley Barnett

Introduction
Relationship marketing focuses on getting and keeping customers. It has developed from the traditional view of marketing that focused on single, discrete transactions. Relationship marketing is concerned with customer loyalty because of the benefits of retaining customers, and the activities involved in it are aimed at developing long-term, cost-effective links between an organisation and its customers. Enhancing relationships with customers means treating them fairly, enhancing your core service by adding extra value and, perhaps most important, providing a highly customised service for each individual. While ensuring that existing customers are satisfied with the service, many managers are also developing loyalty schemes in an effort to entice customers away from their competitors. Customer retention has a direct impact on profitability and past research has claimed that it can be five times more expensive to obtain a new customer than to retain one (Haywood, 1989, cited in Reid and Reid, 1993). Naturally then, considerable time and money is being spent in many organisations to develop strategies to retain customers. Competition in the hospitality industry is intense, and this is increasingly evident as customers seek hotels and restaurants that offer the best value for money. However, cost is only one of the factors that influences customer choice. Recommendations from friends, past positive experiences and a close relationship can all lead to customers returning to a particular hotel or restaurant. In times of economic downturn it is particularly important that strategies which can entice customers to return are used so that organisations can compete effectively and increase revenue. Hospitality providers should consider using relationship marketing, even in times of high occupancy, in an attempt to foster long-term customer relationships. However, there is an inherent problem in relationship marketing in terms of the Pareto rule. Typically about 80 percent of revenue comes from only 20 percent of customers. It should therefore make sense to concentrate most marketing resources on this 20 percent, but the problem for managers is that the most financially rewarding 20 percent are not necessarily the loyal customers (Dowling and Uncles, 1997).

The authors Andrea McIlroy is a Senior Lecturer and Shirley Barnett is a Lecturer, both in the Department of Management Systems, College of Business, Massey University, Palmerston North, New Zealand. Keywords Customer loyalty, Retention, Profitability, Relationship marketing, Customer satisfaction Abstract The relationship between customer loyalty and satisfaction, profitability and customer retention is described within the framework of relationship marketing. The importance of loyal customers and their impact on business profitability is undisputed, but it is more difficult to build customer retention than it may appear. Various strategies including loyalty schemes and discount cards are sometimes used in an effort to retain customers, but their success is questionable. A New Zealand hotel case study is presented which describes customer reactions to a discount card promotion. It was found that customers who purchased the card exhibited the characteristics of Morgan's ``mercenaries''. Although they had high satisfaction, their commitment to the company was low. However, in order to succeed, loyalty programmes need to develop ``loyalists'', customers who have high satisfaction, high loyalty and who will stay and be supportive of the company. Electronic access The research register for this journal is available at http://www.mcbup.com/research_registers/ quality.asp The current issue and full text archive of this journal is available at http://www.emerald-library.com
Managing Service Quality Volume 10 . Number 6 . 2000 . pp. 347355 # MCB University Press . ISSN 0960-4529

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The focus of this paper is relationship marketing and the theory discussed is supported by a New Zealand hotel case study. The following discussion will outline relationship marketing and the three central principles of loyalty and satisfaction, profitability and retention. These principles are closely interwoven in relationship marketing but in order to examine and discuss them they are presented separately. The final part of this paper presents a case study of one New Zealand hotel which developed and sold a discount card in an attempt to develop loyalty with their customers.

Relationship marketing
Relationship marketing has emerged as an important topic in both academic and practitioner discussion and literature. The basis of relationship marketing is customer loyalty because retaining customers over their life will contribute to enhanced profitability. This implies that companies have to learn continuously about their customers' needs and expectations which are ever changing and often unpredictable. Customer relationships can then be enhanced by offering increased value which companies are able to derive from their learning (Morris et al., 1999). However, relationship marketing is not a new concept and as long ago as 1982, the quality guru, W. Edwards Deming, commented:
Profit in business comes from repeat customers, customers that boast about your product and service, and that bring friends with them (cited in Lowenstein, 1995, p. 9).

enhance relationships. These include treating customers fairly, offering service augmentations and ensuring the service is customised for the needs of each individual customer. For example, hotels are beginning to customise service, and regular guests are given the same room, their table is booked for dinner at their regular time and newspapers can be ordered and delivered. Nevertheless, it is important to remember that not all customer relationships are worth keeping. If an organisation changes its strategy or customers change their behaviour they may no longer fit the firm's profile. Further analysis of customer relationships may show that some are no longer profitable because they cost more to maintain than the revenues they generate.
Just as investors need to dispose of poor investments and banks may have to write off bad loans, each service firm needs to regularly evaluate its customer portfolio and consider terminating unsuccessful relationships (Lovelock and Wright, 1999, p. 114).

Before an organisation can begin to develop a relationship marketing strategy, it is important that three underlying principles are understood, loyalty, profitability and retention, these are discussed in the following sections. Loyalty
The key to the successful adoption of relationship marketing lies in the building of client loyalty in dynamic business environments (Morris et al., 1999).

Traditionally, marketing has overemphasised the attraction of new customers, but today, well-managed organisations work hard to retain their existing customers and increase the amount that existing customers spend with them. On average it costs a firm five to six times as much to attract a new customer as it does to implement retention strategies to hold an existing one (Lovelock and Wright, 1999). The costs of attracting new customers include advertising and promotion, but loyal customers also act as word of mouth advertisers and will generally spend more. As well as improving profitability, relationship marketing is aimed at developing long-term, cost-effective links between an organisation and its customers. A variety of strategies can be used to maintain and

Before a relationship with a customer can develop, loyalty must be present. Loyalty is an old fashioned term that has traditionally been used to describe fidelity and allegiance to a country, cause or individual. In a business context loyalty has come to describe a customer's commitment to do business with a particular organisation, purchasing their goods and services repeatedly, and recommending the services and products to friends and associates.
F F F loyalty occurs when the customer feels so strongly that you can best meet his or her relevant needs that your competition is virtually excluded from the consideration set and the customer buys almost exclusively from you referring to you as ``their restaurant'' or ``their hotel'' (Shoemaker and Lewis, 1999, p. 349).

A loyal customer can mean a consistent source of revenue over a period of many years. However, this loyalty cannot be taken for

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granted. It will continue only as long as the customer feels they are receiving better value than they would obtain from another supplier. There is always the risk that a customer will defect when a competitor offers better value or a wider range of value added options. Dowling and Uncles (1997), suggest that:
F F F loyalty programmes must enhance the overall value of the product or service and motivate loyal buyers to make their next purchase.

expectations are met while customer loyalty is a measure of how likely a customer is to repurchase and engage in relationship activities. Loyalty is vulnerable because even if customers are satisfied with the service they will continue to defect if they believe they can get better value, convenience or quality elsewhere.
Conventional wisdom of business, academia, and the consulting community is that customer satisfaction is a necessary element and cornerstone of total quality, and that, if satisfied, the customer will remain loyal. This is a myth, and potential drawback, of having a total customer satisfaction focus (Lowenstein, 1995, p. 10).

There are many examples of programmes that attempt to build customer loyalty and retention including frequent flyer programmes used by airlines and frequent stayer programmes, which are used by hotels. Typically, these schemes give returning customers inducements to encourage repeat business at the same supplier. Loyalty programmes are often set up to encourage customers to enter lasting relationships with an organisation by rewarding them for patronage. Managers also hope to gain higher profits through extended product usage and cross selling, to retain and grow high value customers, and to defend their market position in the face of a competitor loyalty scheme. It is important that loyalty-based marketing should not be confused with short-term price promotions, which seek to generate momentary bursts in sales. Loyalty schemes should be carefully focused to identify customers who are likely prospects for longterm relationships. Short-term price promotions are typified by the proliferation of loyalty schemes and discount cards and managers often believe that loyalty can be bought by this kind of inducement. However, while such initiatives can have a dramatic effect on sales, it is questionable whether, in isolation, they can maintain solid long-term customer support. Godfrey Rooke, chairman of Hong Kong DMA commented that:
Most people think issuing cards will make customers automatically loyal F F F it won't. People tend to buy just to get a discount which is detrimental to many businesses as it affects retail margins (Australian Banking & Finance, 1999, p. 4).

Therefore, customer satisfaction is not an accurate indicator of customer loyalty. Satisfaction is a necessary but not a sufficient condition for loyalty. A customer travelling away from home may be very satisfied with a hotel in which they stay, but they will not necessarily stay in the same hotel when they visit that area again. Other variables impact on the customer's choice including price, location and convenience. Loyalty is established when the customer makes a commitment to the brand and returns to the same hotel whenever they are in the area. In other words, we can have satisfaction without loyalty, but it is hard to have loyalty without satisfaction (Shoemaker and Lewis, 1999). While there is no guarantee that a satisfied customer will return it is almost certain that a dissatisfied customer will not return (Dube et al., 1994). There is a link between customer retention and satisfaction, loyalty and profitability and this is illustrated by Orr (1995), who states that the best way to get the repeat business that you need to be profitable is by:
F F F loyal programs, frequent-buyer clubs, plain ole'[sic] good service and fair prices.

The principle of profitability underpins relationship marketing. Profitability Traditionally, marketing has emphasized the need to attract new customers. However, organisations today recognise that profitability has more to do with retaining existing (profitable) customers and increasing their spend than trying to attract new customers (Richards, 1998). The longer a customer stays with a company, the more profitable they become. They use more of a

Satisfaction An important concept to consider when developing a customer loyalty programme is customer satisfaction. Satisfaction is a measure of how well a customer's

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company's services over time and are usually willing to try new products. Loyal customers may also be willing to pay more to ``stay in a hotel they know or go to a doctor they trust than to take the chance on a less expensive competitor'' (Reichheld and Sasser, cited in Lovelock, 1992, p. 252). In addition:
F F F repeat patrons are less expensive to target. They are easily accessible: names, address and other relevant data are known (Haywood, 1989, cited in Reid and Reid, 1993, pp. 5-6).

available. The service provided must also meet the expectations of the customer. An organisation building customer retention should:
F F F enable customers to receive what they want, when they want it (just-in-time), a perfect delivery each and every time with the desired levels of service that appeal to the consumer (Morris et al., 1999).

Retaining customers means that you can reduce your marketing costs therefore increasing profits. Repeat customers also act as a marketing resource by recommending the service to friends and colleagues and positively supporting the services and products offered. They are a great source of word-of-mouth advertising. These customers may tell up to ten people about the service to which they feel loyalty:
F F F and almost 20 percent claim that they would go out of their way to mention their favorite hotel when discussing hotels with friends or colleagues (Bowen and Shoemaker, 1998, cited in Shoemaker and Lewis, 1999, p. 349).

A desired outcome of providing quality in all transactions is customer retention. While there is no guarantee of a satisfied customer's repeat visit, it is nearly certain that a dissatisfied customer will not return. Managers must understand customer perceptions and expectations of quality. Research has indicated that assessments of quality and satisfaction are critical in the process by which a consumer develops a positive attitude towards a particular experience, makes a repeat purchase and develops brand loyalty (Webster, 1991, cited in Ayala et al., 1996). However, mistakes do occur within an organisation, but:
F F F it is fundamental and essential to commit to service recovery (Tse, 1996, p. 303).

Hotels, which address this problem of customer retention, are going to be more profitable in the long term. It is common for an organisation to lose 15 percent of its customers every year, however:
It is estimated that companies can boost profits by almost 100 percent by retaining just 5 percent more of their customers'' (Reichheld and Sasser, cited in Lovelock 1992 p. 251).

Service recovery is about turning around a bad service experience and retaining the customer after something very annoying has happened:
In simple terms, it's the special effort customers expect you to put forth when things have gone wrong for them (Zemke, 1998, p. 279).

This leads us to the last principle to be discussed, customer retention. Customer retention Customer retention is the crux of relationship marketing. If an organisation is not able to keep customers and build long-term relationships it will continue to operate with discrete one off transactions.
Discussions of customer retention seem to be dominated by loyalty programmes and customer discounts. But research shows that what really drives repurchase is high-quality customer service and well-managed, strategically delivered formal and informal communications (Vavra and Pruden, 1998, p. 50).

The following case study of a New Zealand hotel illustrates some of the points discussed in the literature.

Case study
Background The research reported here was conducted in Palmerston North, New Zealand. Palmerston North is a provincial city, situated in the middle of New Zealand, with a fairly homogeneous population of approximately 75,000 people. Known as the ``Knowledge City'', it is the site of a large multi-campus university that is also the major national provider of tertiary level distance education. There are also two other tertiary education providers in the city. Together these institutions account for approximately 15 percent of the population, and much of the

Customers do not remain with an organisation just because of the discounts offered or the loyalty programme that is

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commercial activity in the city is related to this education focus. Palmerston North is not a major destination for international visitors to New Zealand, but it does host a large number of conferences each year and there are numerous conference facilities available. It also has the highest per capita number of restaurants in New Zealand and there is intense competition for the limited disposable income of the local population. The hotel that took part in this research is one of an international chain of hotels. It has 154 guestrooms, a brasserie and bar, a family restaurant, a health club and extensive conference and banqueting facilities. This is one of the larger hotels in Palmerston North and its occupancy rate, currently 50-55 percent, is on a par with the competition. The business development manager believes that if it were not for the revenue from the other facilities, the hotel would struggle to remain open on accommodation revenue alone. Currently, the customer profile of the hotel is 60 percent business and 40 percent tourism or event driven, and the average room stay is just over 1.3 nights. The hotel estimates that about 20 percent of current business is from repeat customers, but no specific information is available about this. Corporate marketing programmes initiated by head office have not always worked in the hotel, so local marketing initiatives have been launched in Palmerston North. These have been aimed at increasing bar and restaurant revenue and have been targeted at the business market. They include a ``Business Roundtable Dinner'', which is an opportunity for lone business customers to meet, dine and network with others staying in the hotel, and a ``Business After Five'' happy hour, hosted by the general manager once a fortnight for hotel guests and local business people to meet and network. The hotel has undertaken some specific events marketing to improve its weekend occupancy rates and this seems to have been successful. Follow-up letters are sent to the event organisers asking for direct feedback on their stay, and these are also used as a way of encouraging customer loyalty. Again, there is no specific information available from the hotel about the impact of this initiative on customer loyalty. The latest marketing push has come from the introduction of a Gold Card, which is

aimed to increase local awareness of the hotel by encouraging new customers and enticing past customers to return. A reputable firm based in Auckland markets this card, and it claims that customer loyalty and retention is enhanced by the purchase of it. It is also claimed that the card will encourage repeat visits from customers. The card, which costs NZ $39.50, provides a variety of discounts and ``two for one'' deals at the hotel in Palmerston North, including the brasserie, the bar, the family restaurant, the health club, the conference centre and various special occasion offers. Accommodation deals are available locally and from other hotels in the chain throughout NZ. Sales of the card began in September 1999 and at the time of the research 700 had been sold. In this exploratory research, the aim was to investigate whether the Gold Card promotion is likely to lead to customer loyalty and build customer retention. In order to investigate this, a mail survey was sent to all customers on the hotel Gold Card database. Data analysis and discussion In November 1999, a four-page questionnaire was sent to the 700 customers identified by the hotel as having bought the card at the time of the mailout. These customers were asked to respond by 10 December and 186 usable responses were received, giving a response rate of 27 percent. Of these 186 respondents, 56 percent were female and 44 percent were male. No information was available about the areas of the city targeted by the card sellers. As the card was sold at a householder's door and the benefits and costs of services were explained, it can reasonably be assumed that only people who thought they could afford the card and the services for which benefits were offered, would purchase it. Of the respondents, 78 percent were 50 years or younger, and 62 percent reported a household income of up to $60,000 (see Tables I and II). The majority of respondents 64 percent were living in adult-only households while 36 percent lived in households with children. Table III summarises information about respondents' reasons for purchasing the card and their reactions to some of its features. The vast majority had purchased the card for personal rather than business use although

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Table I Respondent age Age Under 20 21-30 31-40 41-50 51-60 Over 60 No response Percentage 2 26 26 24 10 11 1

restaurant also tended to reinforce the notion that people had purchased the card because it was perceived to be good value for money. Comments included:
F F F good value for money. F F F the F F F is a great family restaurant with value for money meals. F F F excellent service, good value for money.

Table II Combined household income Income (NZ $) Under 29,999 30,000-45,000 45,001-60,000 60,001-75,000 75,001-90,000 Over 90,000 No response Percentage 16 27 19 9 9 13 7

One-third of respondents said they purchased the card because of persuasive sellers (statement 4). While this might be a pleasing result for the hotel and particularly for the firm that markets the card, it should be tempered with comments made elsewhere in the questionnaire 12 people felt that the seller had misrepresented the card; a further nine commented that they had not read the small print carefully and felt ``ripped off''. Some specific comments included:
The seller told me you get two meals for the price of one but that is not entirely true F F F The seller told us we could use the gym at any time but that was not entirely true, there is limited usage. I think the idea of a card is great but I am disappointed in the way it was sold to me. The main reason I bought the card was because of the gym and spa facilities. I was led to believe by the seller that the gym was much bigger than it actually is. At times when I have attempted to use the spa, I have been unable to because of cleaning, etc. I believe I was misled by the seller and would not buy another card.

some had obviously purchased it for both (statements 2 and 3). The data also show that two-thirds of purchasers were new customers of the hotel, that most of them believed that the card offered a good range of benefits and that it represented good value for money (statements 1, 5 and 6). This motivation for purchase would probably be particularly strong for the 32 respondents from households with children where the combined income was up to $45,000, as an extra $39.50 from the weekly budget is quite a substantial amount. Many comments made by respondents in respect of the family
Table III Card purchase and features No. (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) Statement

These results tend to suggest an emphasis on transaction rather than relationship marketing with a focus on the single sale rather than customer retention (Morgan, 1996). They also suggest that the customer perceived the

Yes No No reply (Percent) (Percent) (Percent) 33 96 16 32 88 90 62 57 17 74 37 74 66 3 79 64 9 6 31 39 78 18 58 19 1 1 5 4 3 4 7 4 5 8 5 7

Customer of hotel before card purchased Card purchased for personal use Card purchased for business use Card purchased because of persuasive sellers Card purchased because good range of benefits offered Card purchased because good value for money Would recommend that others purchase card Would purchase another card if promotion run in future Would be prepared to pay more for a card that could be used in any of the hotels in the chain Card should be valid for six months from date of purchase Would pay more for a card which was valid for one year from date of purchase Would prefer a card the size of a credit card

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relationship to be unequal and not the winwin scenario which is characteristic of relationship marketing (Gummesson, 1995). Even though one-third responded that they purchased the card because of persuasive sellers, almost two-thirds of the respondents would recommend that others purchase the card (statement 7). This reinforces the idea that customers saw the card as providing a good range of benefits and good value for money. This is further supported by the fact that just over half of the respondents would purchase another card if a similar promotion were run in the future (statement 8). It is interesting that only 17 percent of the respondents said they would pay more for a card that could be used in any of the hotels in the chain (statement 9). This indicates that the purchasers of the card were more interested in the local facilities like the brasserie, bar, family restaurant and health club than they were in the ``away from home'' facilities like accommodation. Statements 10 and 11 are interesting, with three-quarters of respondents being prepared to purchase a card that is valid for six months from the date of purchase. However, only just over one-third were prepared to pay more for a card that was valid for one year from the date of purchase. On a more general note, 74 percent of respondents thought that the card should be the size of a credit card (statement 12). The current card is slightly larger and therefore difficult to fit into a wallet or a credit card holder. The customer loyalty and satisfaction, profitability and retention link has been widely discussed (see for example Shoemaker and Lewis, 1999; Morgan 1996; Morris et al., 1999; Gummesson, 1995) and this discussion has been further explored in the first part of this paper. In order to establish whether the purchase of this card might lead to customer loyalty and retention, respondents were asked about the various services used and their intention to use the services after the card expired. Table IV shows the percentage of the sample who had used the various services since purchasing the card and the percentages who answered ``yes'' to the following question: ``If you did not have a Gold Card, would you still use the following services?'' The percentage of respondents using the services was fairly low, except for the family

Table IV Current use of service and intention to use service again Service Bar Brasserie Family restaurant Health club Accommodation Conference venue Special occasion Current usage (percent) 25 32 53 24 n/a n/a n/a Use again (percent) 17 26 57 8 n/a n/a n/a

restaurant, which tends to reinforce the notion that customers primarily bought the card to get ``cheap deals''. As a customer retention strategy its success is therefore doubtful. The conference venue hire and special occasion benefits had, in fact, each been used by only five respondents and only 9 percent (n = 17) had used the accommodation benefits. There was no way of telling whether accommodation had been used in Palmerston North or at other hotels in the chain. A total of 25 percent of respondents had used the bar, however, only 17 percent indicated that they would use the service after the card expired. There were a number of comments from respondents that referred to their dissatisfaction with the service provided in the bar.
The bartender was unfriendly and rude after ordering a glass of wine at ``$6'' a glass he barely filled it past half way and when questioned just turned his back. Why I marked F F F bar low was because of the inexperienced bar persons and having to wait so long.

Customers are unlikely to return or become loyal if they are dissatisfied with the service provided (Dube et al., 1994). Comments from respondents indicate this may be the case in this instance. A higher number, 32 percent, had used the brasserie and 26 percent indicated that they would use it again. These results are no doubt partly attributable to the extremely competitive nature of the hospitality market in Palmerston North. Some reasons for not using the brasserie in the future are listed below:
I enjoy the food at the Brasserie but the prices are quite high without the card. Probably [use again] although all depends on $$$. Brasserie was good F F F no complaints.

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Would most likely continue to use the Brasserie, much competition in PN, perhaps other places would be first choice.

The results for the family restaurant were more positive 53 percent of respondents had used it, and 57 percent said that they would continue to use it after the card expired. This anomaly suggests that some customers were already users of this service before they purchased the card and would continue to be loyal customers:
I will still use the family restaurant because it is an excellent place to take children. Yes I will continue at the family restaurant because it offers a good family meal.

Many of the comments made about the family restaurant tended to emphasise the value for money and family-friendly nature of the facility. In total there were 27 positive comments and only two negative comments about it. Positive comments included, ``good value'', ``affordable, speedy service'', ``good family meals'', ``accommodates children'', ``friendly staff'' and ``good service''. The health club had been used by 24 percent of respondents. Significantly, only 8 percent said they would use the facility without the card. While the gymnasium/ health club market in Palmerston North is relatively competitive, many of the current providers are often heavily used at peak times. The hotel has a facility that is under-utilised and could therefore be very attractive to new customers. However, the benefits offered by the card did not prove attractive to a number of respondents. For example, several people commented on the fact that they could not use the health club after 5 p.m. a prime time for many workers to go to the gym. Others commented about equipment not working and the shortage of towels and filtered water. It is significant that over 70 percent of those who used the brasserie, the bar, the family restaurant and the health club were either very satisfied or satisfied with the service. However, the percentages of those indicating that they would use the service again were relatively low, except for the family restaurant (see Table IV). This highlights the point that satisfaction is not an accurate indicator of customer loyalty. Summary The overall picture is not a positive one in terms of building customer loyalty. Even with

the most popular service, the family restaurant, there were a relatively high number of respondents, 23 percent, who said that they would not use it without the card. The card used in this promotion offered price discounts, traditionally a transaction marketing tool (Morgan, 1996). However, ``creating brand relationships is the ultimate goal of loyalty programmes'' (Shoemaker and Lewis, 1999, p. 351). The relationship needs to have a long-term focus and offer ongoing value to the customer which establishes the brand as the customer's preferred supplier. In order to do this, the hotel would need to consider moving to strategies such as bundled promotions and frequency programmes (Shoemaker and Lewis, 1999) which have been shown to develop customer loyalty, build customer retention and increase profitability. Currently, the customers of the hotel who purchased a card and responded to the questionnaire, exhibit the characteristics of Morgan's ``mercenaries'' (1996, p. 31). They have high satisfaction, low to medium loyalty and low commitment to the company. These customers tend to shop around on the basis of price, impulse or fashion. In order to succeed, loyalty programmes need to develop ``loyalists'' (Morgan, 1996, p. 31) customers who have high satisfaction, high loyalty and who will stay and be supportive of the company. Committed customers who are loyal to the brand, do not respond to the lure of competitors.

Conclusion
The focus of this paper has been on relationship marketing and the principles of loyalty and satisfaction, profitability and customer retention. Generally speaking, as the relationship between the customer and the service provider gets closer, satisfaction and loyalty levels of the customer rise (Colgate, 1999). In order to build such a relationship, managers must ensure that customers are fairly treated, that their needs and expectations have been met, that value has been added to core services and that each customer receives a customised service. Every effort should also be made to target those customers who are the most profitable. The hotel described in the case study has attempted to build customer loyalty and therefore retention by selling a discount card

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in Palmerston North. The main finding from the research was that a discount card does not appear to increase customer loyalty and that many customers buy the card because they perceive it to be good value for money. This is supported by the fact that few of the respondents to the survey stated that they would remain customers of the hotel once the card had expired.

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