In a lot of markets, it’s very difficult to distinguish between offerings. A lot of products and services are essentially the same.
Hotels understand this - they're all basically the same. Who cares about the number of stars the hotel has? That probably just means they have a business centre with a fax machine.
As long as the bed is comfortable, the room is clean, and it’s near where you need to be, everything else is just garnish.
In a market like that, the way to differentiate your offering is to do something memorable, something that gives the customer some kind of warm glow that will make them think favourably of you in future.
It doesn’t have to be something tangible - it can just be the receptionist remembering your name when you check in and being friendly.
As Jason Kottke and Frank Bruni say, the best restaurant is the one where you're a regular. They’ll make an effort for you. It can be room upgrades, but that’s not so important.The fact is that the deluxe room is exactly the same, except that there’s a bath robe in the wardrobe, a plate of chocolate-dipped strawberries on the table, and the bottles of shower gel are a little bit larger.
But the point isn’t the quality of the room - it’s the fact of the upgrade itself. It’s a sign of recognition, a way to persuade you that they care about you, and that you should continue spending your money with them. That’s why any time you get a survey from a hotel chain, they’ll ask you if you felt valued as a loyalty scheme member.
Having said that, this week I got upgraded to a river view suite, which was very nice...