Hilton HHonors Strategic Response to Starwood Preferred Guest: The Battle for Customer Loyalty
Hilton HHonors is a program which was designed to build loyalty to the Hilton brand worldwide. Membership in the program is open to anyone who applies at no charge. Members earn points toward their Hilton Honors account whenever they stay at a HHC or HIC property. Like many other reward programs, as members accumulate points they can redeem them for HHonors hotels or use them toward products and services from partner companies. Along with being a well-recognized name, the major advantage or strength of the Hilton hotel chain and the HHonors program is that it allows their members to “Double Dip”. This means that their members can earn mileage in partner airline frequent-flyer programs and HHonors points during the same stay. The HHonors program is the only hotel chain program to offer double-dipping. Looking at the weaknesses of the Hilton hotel chain and the HHonors Program we can see that a major area of weakness has been a “widely varying product and the challenge of managing customer expectations with such a variety of product offerings” (Deighton, & Shoemaker, 2000). This is an issue caused in large part by the different types of ownership and management which controls the 492 properties branded as Hilton hotels. We can also see that when lined up in a direct comparison with the new Starwood Preferred Guest Program such features as No Blackout Dates, No Capacity Control, Paperless Rewards, and Increased Hotel Reimbursement (none of which are currently offered by HHonors) could be expensive to match and may not make since for HHonors to offer. The following is an alternative strategy I would suggest Hilton consider given the circumstances presented in the case. Customer Brand Loyalty is much more than simple repurchasing. “Brand Loyalty can be earned only when leaders put the welfare of their customers and partners ahead of their own self-serving interests.”...
References: McCall, Michael, Voorhees, Clay, & Calantone, Roger. (2010). Building Customer Loyalty. (2010). Cornell hospitality report. Ithica, NY: The Center For Hospitality Research at Cornell University.
Reichheld, F. (2001). Loyalty Rules!: How Today 's Leaders Build Lasting Relationships. Harvard Business School Press Books
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