Podcast: Peter Menges, Sandals Resorts' Senior VP of Customer Engagement and Loyalty

Barry Kirk: Oftentimes, I think the modern world has made loyalty into a transactional term. I think you and I would agree that when we're talking about a customer's loyalty to a business, our loyalty to a cause, or your team member's loyalty to being part of an organization, is probably, foundationally, more emotional many times than it is logical or transactional.  

Peter Menges: What's interesting to me is, and you and I have talked about this and joked about it to some extent, I actually don't like using the word loyalty in the context of a program or an initiative. Loyalty is an outcome, just by nature of what it is. Loyalty is an outcome of how one interacts with a brand, or a person, or a business, or a resort, in our case, or other things. Loyalty at its core has to be emotional because it requires an emotional connection. You can't buy that. I think people default to currencies, points, etc., as a way to recognize loyalty. But that's a form of recognition, and almost a way to Pavlov's dog, right?  

You do this, and you get that versus deep, rich loyalty, which comes in the form of a relationship. It comes in the form of connecting with people, a place, a thing that, over time, or through an immediate connection, but it tends to be over time, you become passionate about. Then, that passion extends into advocacy and enthusiasm and a big dose of enjoyment. That leads to ultimate loyalty. I think if people aren't thinking about it as an emotional relationship-driven thing, they're going to only achieve moderate success because a currency-based loyalty program or initiative can only get you so far. 

Barry: It's interesting, Peter, because we often say that same thing about leadership. We will say it is about, certainly, skill set and mindset. But there's also heart set, which is how do you approach leadership as an act of caring? I want to talk about that a little bit in your walk as a leader. I'm curious, what was your road to leadership? How did leadership present itself to you as an opportunity in your career? 

Peter: I think I've been lucky in my career to have a whole host of mentors, particularly two or three that were so good at always giving people enough rope to do their thing, but without going too far off the rails. 

By default, there are fundamental ingredients of leadership. You've got to make sure that there's well-defined purpose. You've got to make sure that people have the tools and the resources to be successful; you’ve got to provide adequate support required; you've got to be a great listener. All those things are ingredients in helping whatever level of leader be successful in their role. To me, leadership starts with an opportunity that then morphs into a demonstration of people wanting to be with you, wanting to work for you, wanting to be successful alongside you, as we talk about the ability to have one plus one equal three.  

Barry: Now, you're in a role of significant leadership at a globally known hospitality brand. What does leadership look like at that level for you, particularly when you think about the people in your span of care? We use that phrase a lot in our work. Not the people that report to you, because there are oftentimes people in your span of care that don't report to you. At the senior level that you're at, how do you think about the role and the responsibility of leadership to those people? 

Peter: I think, as I mentioned before, fundamentally, bad leadership starts with lack of clarity and purpose. If you can't clearly define where you want people to go, and what you would like the outcome to be, people will ultimately fail.  

My dad had a great expression. He always said you'll never get where you're going unless you have a map and a destination. It starts with the destination; then you develop the map, i.e., the strategy, and you have somebody drive, i.e., the leader and the people around. I think it's an interesting, kind of goofy analogy, but it is true that good leadership, particularly in the executive ranks, has to start with clarity and purpose. Once you have clarity and purpose, a lot of people have a lot of different points of view, great points of view, on how to get or fulfill that mission. 

You have to have confidence in them, that they're smart people. You always hire people that are smarter than you, ideally. You surround yourself with wonderful people that are motivated, that are energized, that are looking at different creative, unique ways to drive a great outcome. As I suggest to many of them, make sure that the outcome is sustainable. You can't be a one-trick pony. I think the guidance is about clarity and purpose, a sustainable outcome and empowering people to get there in their own way. 

I think any good leader, particularly as you get up in age, like me, and you've been around a long time, you're measured based on the success of the people in your span of care. You're not really measured on a number yourself anymore, because, honestly, what do we really wake up and do that can move the needle? We empower people to be great at the roles they're in, so that the rising tide raises all boats and the whole thing moves forward. 

I think about it in that context, Barry. I don't think about it as telling people what to do. If you're telling people what to do at our level, one, you're not going to keep people around very long. Two, it's not sustainable. Three, you're going to have the least successful outcome you could possibly have because the collective perspective will always be greater than the individual perspective. 

Barry: And yet, the reality is that those people in your span of care, even when you bring that clarity of purpose and direction, and you give them room to go be successful with that, they aren't AI bots. They're humans, maybe messy humans. 

How do you think about, in your role as a leader, balancing that you want to care for those people and be empathetic toward them, while also having high expectations of performance for them? How do you think about that? Sometimes those feel contradictory to leaders, rather than that they should be in support of one another. 

Peter: I'm going to wordsmith you a little bit. Care is a wonderful bow around things, but I think it requires a little bit more of a definition, from my perspective. Clarity and purpose will put the goal line out there. It'll put the destination out there. But ultimately, you have to be prepared to empower good people to drive a great outcome and be available to listen and support. 

By no means does this suggest that you're just a pushover or a softie; that's not the point at all. The point is that you're providing honest, objective guidance to motivated people to help them be the best they can be. 

When they go home at night, I hope they've got a smile on their face, saying I had fun today, and I did great work, and I achieved what I wanted to achieve. I think that comes from that dose of honesty, openness, directness, clarity, etc., that allows people to fulfill that ultimate outcome. If they go home one night that way, and then the next, and the next, and the next, a year later, you're going to have an incredibly motivated workforce that's enjoying their work and driving a phenomenal outcome. 

Barry: Your own leadership journey has brought you to a very well-known brand that you're a part of today, and a significant role there. I would imagine anybody listening to us talk today knows who Sandals is, but maybe not everybody. How would you describe the Sandals brand, in your own particular way, about what people should understand about it, and what makes it unique? 

Peter: I've been in the hospitality business for a long time, as you know, and I've had the pleasure of working with some phenomenal big brands and a couple of boutique brands, and Sandals, and let's not forget the Beaches brand, the family brand within the Sandals portfolio. 

Sandals was born out of the vision of an incredible entrepreneur, Mr. Butch Stewart. It is now led by his son Adam, who's our executive chairman. The stories of Butch over the last 43 years — he passed away four years ago now — were about his connection with the guest. As we say, a little tongue-in-cheek, but quite honestly, the root of our philosophy is that anybody can build a building; it just takes money. Anybody can build a building, but it takes people to bring it to life. 

I think that is Sandals and Beaches’ secret weapon, what they’ve excelled at better than anybody else. The people, the way the people approach the interaction with the guest, the delivery of services, the delivery of a special smile, the delivery of remembering a name, it is an extraordinary commitment and consistent delivery that exceeds most people's expectations. 

Honestly, when we think about Sandals and Beaches, and we talk to our incredibly loyal community, family is the first word that is expressed  — a deep, rich, wonderful sense of family. That doesn't mean that there aren't problems every once in a while, just like a family, but the outcome is an incredible connection and deep, rich relationship that pushes Sandals and Beaches, or allows us to deliver on a promise better than any other hospitality brand, in my opinion. 

Barry: I know right now you've just undergone a major transformation of your loyalty program. It has been a really successful loyalty program, been in place for many, many years. Yet, you determined as an organization that it was time for a transformation to something that really did approach your guests in a more human way. 

Could you talk about that a little bit, particularly for anybody who's listening today and thinking, I want to do the same thing for my organization? What does that require? How did you have to think about loyalty, or maybe just think about your guest differently, in order to start that transformation? 

Peter: It starts with listening. We talk about examples or expressions of the deep, rich relationship we have with our members. I know you know this, but just to clarify to the group out there, I host a quarterly Zoom call that ranges from 3,000 to 5,000 members. We share what we're up to, so there's full transparency in where the brand's going, where the business is going, where our product's going, etc. 

But we also solicit feedback from our members consistently. I think this is the heart of delivering a great loyalty experience. It's understanding what the expectations are of your community. 

I don't think you can ignore or ever throw a currency component to the side. There has to be rewards and recognition associated with behavior. In my opinion, it has to escalate as you become increasingly loyal, and that's a very traditional approach to loyalty programs. 

What we found, and what we are in a perhaps unique position to be great at, is that our members want a deeper connection than that. They're craving a deeper connection to that. 

What rises above a currency in terms of importance is greater access, greater flexibility, greater sense of connection and relationship. If you think about the delivery of that, it's no longer about a currency. 

It takes the pressure off the currency. You still have it, but you focus on things that can deliver greater value. By the way, in most instances, at a lot less cost than points, you can deliver an experience better. You can deliver on a value proposition in a more complete, compelling way, based on what, in our case, our members have been telling us. 

When we think about transformation, that sounds awfully lofty. What we're really doing is, I believe, we were very good listeners. We solicited great feedback and direction. We digested it well, and we are now putting forward the next evolution of a loyalty proposition, or a customer engagement proposition, that is in line with what our members would love to receive and be a part of. I think, as a result, you will see accelerated loyalty and advocacy. 

Barry: I know you've just relaunched your loyalty program, Sandals Rewards, as Island Insiders Club, which I think is probably, arguably, more of an experience. 

Has that required Sandals as an organization to culturally think differently about the guest's experience or to use more of what you were already doing? How did you have to transform the team in order to deliver on this expectation that guests have shared with you? 

Peter: Sandals Select Guest, the former name, is now Island Insiders Club. Island Insiders Club is a very purposeful selection of language. First of all, we are a Caribbean organization — all of our properties in the Caribbean. We don't intend to grow beyond the Caribbean. 

Being truly made of the Caribbean, and a representation of the islands of the Caribbean, was critical to us. Our members behave as and expect to be treated as insiders. Whether it's the information they receive, the access they receive, the flexibility in how they engage with us, again, that sense of community, etc. Being an insider, to us, is what matters most. 

Obviously, being part of a club or thing that's a reflection of a community was important. The Island Insiders Club was so well received as a transformative representation of how we want to operate as an organization with our customer engagement and member engagement. The reaction from the general managers and the executive leadership team was absolutely off the chart. It led to a whole, deeper, richer sense of training and expression of why it matters with every team member, from housekeeping to the hotel managers to bartenders, etc., across the organization. I think that's what's so exciting to me: the way it's been received and the way it's now coming to life in every dimension of how we operate.  

A true expression of Island Insiders Club can be a smile. It can be a recognition of a personal connection through the remembrance of a name or a drink. It's the idea of being part of something that's deeper, richer and more meaningful, and allows you to elevate your vacation experience to a new place, because of connection, not because you went water skiing one more time. 

It's because of the way you went water skiing, and the way they treated you, and that really deeper, richer sense of belonging, and I think that's what's so powerful. It has absolutely permeated every dimension of how we operate. In my opinion, elevated every dimension of how we operate. 

Barry: When we talk about these committed guests, and you talk about this amazing staff you have, these team members in your span of care, leaders all across your organization, I want to bring you to a very significant moment that affected both of those groups. A few months ago, last year, when a very major hurricane hit the area around Jamaica, Jamaica had some real devastation: power outages, destruction, people homeless, all sorts of challenges, including your resorts there, several of them being significantly hit. 

I know that wasn't just a storm; that was personal to your organization. These are your people, these are your guests, and in terms of your team members, these are their families that are affected, too. 

When that occurred, what was the response, initially, from you as leaders of the Sandals and Beaches organization? What was your first reaction? What was important to do first when that happened? 

Peter: Let's frame it. A Category 5 hurricane, the worst natural disaster to hit the Caribbean in God knows how long. Absolutely devastating, catastrophically devastating. Let's elevate it to where it belongs in terms of a natural disaster. 

First and foremost, you think about people. Are people safe? Are people able to withstand what's coming? Do they have food? Do they have water? Do they have shelter, etc.? 

In preparation, getting as many people off the island as you possibly can in terms of your guests. We obviously had a number of guests who were not able to get off, so we had to make sure that our people were accounted for and cared for. 

It's all about people. The word from Adam on down was we don't care what it costs, we don't care what's required, we expect everybody to do the right thing all the time in taking care of our people, our guests, our team members, and their families. That was the focal point of every decision, every action we took. 

Barry: It would be reasonable in the face of that kind of catastrophe, and literally having resorts that were going to, or in the process of being rebuilt, to say we don't have jobs for those team members. There literally isn't a resort there for them to be a butler at, or to be a bartender at, or a housekeeper. How did you face that challenge as a leadership team? 

Peter: Again, Adam on down, I give him enormous credit. I'm a big fan of Adam's, and he's done a phenomenal job, and that put his leadership, and his character more than his leadership, on full display. First of all, he didn't want anybody to have to worry about money and being paid, wondering if they were going to have a job, none of that. The focal point was getting people home. We were the first organization to charter a flight to get the remaining guests out. The plane we chartered was the first plane to leave Montego Bay Airport when it opened — with our guests. That's how committed he was to ensuring that people were cared for until they got to their doorstep. 

With regard to the people, though, it was devastating. Again, you talk about water, electricity, roads. It was nothing like you've ever seen before. Our property in South Coast looked like a nuclear bomb had hit it. It was that devastating. Adam made the decision straight away that nobody was going to be let go, that everybody would be paid in full through the process and until the resort's opened. Two resorts in Montego Bay and South Coast won’t open until the end of the year. And so, these people either were being reassigned to other properties or being put on special projects. They weren't necessarily idle, but they were looked after, cared for and compensated without disruption. 

Again, I give Adam so much credit. The last thing he wanted anybody to worry about was the tangible things that we could control and support. Make sure you're safe, make sure you have a home. Think about what I'm saying. Do you have food? Do you have a house? Do you have the basics in life? He wanted to ensure that everybody was cared for properly, and that was the focal point. 

Barry: That story really resonates with me, personally, because our parent company, Barry-Wehmiller, often tells a story about the time in the Great Recession, where there was nothing close to the devastation of that hurricane, but an economic storm. The company had to face the need. Another company might have said we're going to lay everybody off. Instead, the company found a way to not do layoffs and have everyone share the burden equally so that people's jobs were secure. We often tell that story because it is a signifier of our culture — what our culture is about. Even today, we believe it is a story about that. 

When you think about the response that your leadership had to that devastating hurricane, what would you say it says about the culture? And what does it say to somebody new coming into the organization about what kind of a culture you've created at Sandals and Beaches? 

Peter: One, I don't think people really can comprehend that decision in large measure. Culture is an interesting reference point, but I start with Adam as a leader and his character, the character of the organization. You wake up every day, and how do you behave? Are you a positive person? Are you energetic? Are you going to help people be successful? Are you going to lead in a way that's inspirational? Are you going to ensure that people have a comfortable, purposeful work environment? All those things are what starts from the top and were on full display during this devastating period.  

By the way, in some instances, there are still people dealing with it. It’s not over yet, and it continues to be on full display. If you were an outsider looking at Sandals and understood the way we operate and the way that character leads our decision-making, and obviously, we have to be fiscally responsible, but the character supersedes that. 

One, you would want to work here every day, all day long. Two, it's highly motivating as an employee. Three, it's such a deep sense of connection to the organization that you'll give it more than 100% all the time because you know that everybody else is doing that, and you want to be a part of that. I think a successful culture, or a culture that allows people to be successful, starts with a sense of belonging. Do you want to be there? Do you want to belong there? Do you want to be a part of this organization? 

I can tell you that I don't know of anybody in the organization who doesn't wake up every day saying, I am very proud to be a part of this organization for who we are, what we do, what we deliver every day and how we operate from the top down. 

Barry: I would imagine, or maybe hope, Peter, that one of the things you're proud about is your journey as a leader, and I wanted to ask you about that before we close today. When you think about the amazing organizations you've been a part of — the amazing one you're part of right now. When you think about somebody who might be new to leadership, or wants to be in leadership, what would be your advice to them on how to think about the role of a leader? Particularly because I think at some points in our walk in the business world, we use terms like boss and manager a lot more. Leader hopefully connotes something different. What would you tell somebody who's saying this is the beginning of my leadership walk? What would you advise me to think about? 

Peter: That's a great question. I would advise you to be a great listener. I would advise you to get to know people and really understand the people, as you say in your span of care, whether they are directly reporting to you or within your direct influence or slightly beyond that, but be a great listener and understand what motivates them. Understand: do they have a good sense of purpose? Do they understand what's expected of them? 

Add a little more clarity to that if it's missing. Understand the business better than anybody else, but honestly, don't let anybody know that you know the business better than anybody else. I think that's a very important dimension to it. You never want to be a know-it-all. You never want to be somebody who thinks they're the smartest guy in the room. What you want to be is well-informed; you want to have a good sense of direction and purpose; you want to surround yourself with great people; you want to give them the tools to be successful. At the end of the day, get out of their way and let them be successful, but be available to help guide and influence. By the way, make sure that you're having fun along the way. 

Barry: I know your leadership journey continues, but when you think about your leadership legacy in human terms, what do you hope lasts? 

Peter: This is going to sound very morbid, but my dad told me this story, and I referenced my dad a lot because he was a great leader, but he told this story years ago. He said, if you really want to focus on what's important, write your own eulogy. I thought about that. What people talk about when you're dead, hopefully, shares what you really want to be proud of, or at least how people think about you. I think about it in the context of I hope somebody stands up there and says, because I knew Peter, I was more successful than I would have been. Or, people think about their own journeys, and I made them a little bit better. That, to me, would be a great legacy. All it takes is one, but if I could get a bunch of people to say that I made you all a little bit better in your daily lives, in your careers, I think that'd be pretty good. 

Barry: That's amazing, Peter. Thank you. I appreciate the time today. I appreciate your truly human journey and sharing some of that with us today. 

Peter: Barry, it's always a pleasure to spend time with you, and thank you very much.