Hilton -- Group Prep - ROBINSON 1 2 3 4 5 Sensitivity...

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ROBINSON 1) Sensitivity Analysis what are the metrics for them? 2) Universal point system do we need to make point system? 3) Price address senior citizen membership? 4) What can we do about limited network size? 5) GROUP PREP Starwood changed loyalty program No blackout dates 1. Increase spending $50 million on advertising Substantially increased mass media promo expenditure Made more flexible and apparently more generous Not frightened 1. Expensive for them 2. What we have they don’t have Brand image Hilton means high-end hotels Starwood means = no one’s every heard of it None of their hotels name Starwood Hilton program needs work Complicated, doesn’t help customer loyalty Shouldn’t have to go online read brochure Solve: 1. Look at tiers (p 6) Diamond VIP obscure, not well publicized Typology: segment who stays a lot at Hilton Who stays at Hilton? Business travelers that travel a lot Sales representatives, consultants, sometimes executives with responsibilities for another plant Remember lecture: NEED DISLOYAL BEHAVIOR FOR LOYALTY PROGRAM TO WORK Look at number of properties, Hilton doesn’t have a lot of hotels Divide by cities in US, lots of Hiltons Disloyal behavior: person lands, going to factory site. Stay in rental, drive 2 exits more to stay at Hilton, not the Hyatt right across the street. Want exec to say to asst “there’s gotta be a Hilton around there” Diamond
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Stay 16 nights, become part of Diamond, get 50% back on points and recommending more amenities (P6) No benefits promised, life not materially different BLUE is a PROSPECT Stay at Hilton because convention next door In SF, huge can take convention goers easily Customers in sense stayed once Additional behavior? SILVER stays 4 times a year How do I know you are ready to stay more? Blue = stay once, look at those stay more than once Ex. Date, if phone call, sign of life, hope BLUE turns into SILVER if play the game, come back at least once MOVE PEOPLE UP Blue up to Silver Offer discount next stay, -OR- say ordinarily do 4, but stay one more visit will move you to Silver SALE PROMOTION Figure for average revenue per guest, per staying
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