Managing a Better Program - Introduction

Hilton Hotels sees its frequent guest programs “HHonors” as an incredibly important marketing tool. It serves to direct promotional and customer service efforts for a population of its most important clients, the frequent business traveler. Hilton is running the “HHonors” loyalty program to create and retain loyal customers in the same way as its major competitors. Organizations in the lodging industry all compete for the same subset of customers by introducing more generous loyalty programs. The case study “Hilton HHonors Worldwide: Loyalty Wars” by John Deighton and Stowe Shoemaker details the importance of this program to their strategy and marketing efforts. The competitive advantage that …show more content…

Guest satisfaction at this level is directly linked to the rewards provided (Pizam, 2010, p 327). Hilton has differentiated itself by offering a “Diamond” level status to its top 1% of consumers. By not being specific on the details of the reward levels, they have the opportunity to under-promise, yet over-deliver. Quite similar to airline elite reward program, elite members receive top customer service every time they use their points. This gives consumers a goal to reach for. Elite Diamond members receive amenities like automatic late checkout, free dry-cleaning, free upgrades, as well as bonus points earned on each stay. Starwood has three types of benefit packages; preferred guest, gold preferred, and platinum preferred, with the platinum preferred being the elite member program.

When comparing the two brands, both Starwood and Hilton have strong loyalty rewards plans. Hilton developed their HHonors program first, giving Starwood the opportunity to learn from their mistakes and improve upon many factors. Looking at rewards programs from the point of view of a consumer, it would be best to choose the one that allows for the quickest and easiest way to earn points. It is also important that the hotel make it easy to redeem those points at any time as well as not charge a higher value just for using them. In keeping with the logic that a customer’s review rewards programs, a franchisee should recognize that 1/3 of American consumers will be loyal to hotel brand