Lower Cost, But Higher Loyalty

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Nov 28, 2005
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By John Hennessy, Vice President, Concept Shopping, Inc.

(www.conceptshopping.com)


Instead of communicating with its Preferred Plus members four to seven weeks after a stay, Starwood Hotel & Resorts is using print-on-demand capabilities to deliver a more personalized communication more frequently.


Starwood can personalize mail pieces with the member’s name, number and according to one of seven possible membership levels. The outer and inside graphics often include a photo of a recently visited property and the language of the member’s native country can be used. Starwood also benefits by being able to deliver information to new members sooner and deliver more current account information to existing members.


Costs are reduced through print-on-demand because there is no obsolete print inventory to throw away. Marketing partners also can get their logos and customized messages to members quicker.


Moderator’s Comment: How are other loyalty programs differentiating what they offer to their members?


Hotel loyalty programs can easily become “me too” affairs offering undifferentiated member value. Using print-on-demand services to deliver personalized
pieces with more timely information is a great way for Starwood to stand out.


For frequent travelers, this approach not only represents a superior level of member relevance and service, but also keeps Starwood top of mind with those
most likely to need accommodations.


Starwood’s approach shows its guests that Starwood is paying attention. That goes a long way toward encouraging loyalty.
John Hennessy – Moderator

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6 Comments on "Lower Cost, But Higher Loyalty"


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Al McClain
Guest
Al McClain
15 years 3 months ago

The combination of saving money for Starwood, while personalizing mailings to members, is a winner. As a frequent traveler, I get tons of non-targeted junk mail from hotel programs, car rental companies, and airlines, and 99% of it goes straight to the recycling bin. One thing that I find particularly laughable is receiving a survey saying, “You recently stayed at xyz hotel and we want to know how you liked it.” The stay in question is normally 4-6 weeks ago. With aging baby boomers, it isn’t realistic to expect them to conjure up a hotel stay that far back and ask if the mini bar was full, the carpet was clean, the breakfast was hot, etc. Anything to get materials out more quickly, and make them more relevant, has to drive revenue, long-term at least.

Santiago Vega
Guest
Santiago Vega
15 years 3 months ago
Sounds like an OK idea, but how about focusing on starting to get loyalty points from the time a customer is thinking about booking a room to the time he leaves the hotel? Marketers are wasting their time and money with loyalty programs that go into effect after customers have used the service they paid for, and they’re neglecting the opportunity they have to make a lasting impression before and during a stay. That’s what really counts. Even if you think your letters are “personalized,” they are still automated processes that will always have glitches and may backfire on you: a country’s native language isn’t necessarily your guest’s native language or his language of choice. This goes for letters as well as websites at the moment of booking a room. Try booking a room in German just because you happen to be in Germany at the moment; or receive a letter in “Mexican” Spanish that makes no sense to an Argentine. Start by hiring adequate, friendly staff and train them to recognize what may be… Read more »
James Tenser
Guest
15 years 3 months ago

Starwood is on to something. Print on demand is certainly the right way to prepare and distribute first-time member packets. It may prove even more useful over time, as card members grow confident that the firm is sending them relevant offers and information.

The limitations posed by “privacy laws” (as cited in the article) may block certain tactics, but legal or not, Starwood should recognize that certain personalization tricks may feel downright creepy from the customer’s perspective. Even including something as innocuous as my preferred type of pillow in a custom form letter may seem too intimate. As one-to-one marketers further develop this technique, it is imperative that they conduct research to determine just where the line lies between helpful and invasive practices.

David Livingston
Guest
15 years 3 months ago

Actually, I am sick of all the junk mail from Starwood and find it annoying. Starwood is not paying attention to me. Their junk mail producing computers are. There is nothing more impersonal than a computer generated letter from a sterile corporation.

Now if the CEO of Starwood knew me personally, invited me back, and compted me some rooms, then perhaps I would be more impressed.

Carolyn Clark
Guest
Carolyn Clark
15 years 3 months ago
What Starwood is doing is nothing new for their “industry.” Casinos have been doing this for years. Harrah’s gained the casino industry’s leadership by doing just this type of relevant marketing. Using algorithms on their guest’s play history, via their loyalty card, Harrah’s was able to determine groups that had the propensity to play more and hit those groups hard with enticing, relevant offers. By just gain one or two cents more of each gambler’s gaming dollar, they have been able to capture millions and millions more in revenue for their casinos. They took the concept one step further by placing kiosks in their casinos that allow for instant reward redemption, against point accumulation, for meals, cash, hotel stays, giving their guest yet another reason to spend more time in their establishments. All the major casinos now offer “me-too” programs, but Harrah’s was their first and gained an incredibly loyal base. You would think that the supermarket industry would reacted to the huge success of this type of relevant marketing and developed their own programs… Read more »
Mark Lilien
Guest
15 years 3 months ago

Starwood’s program is more appropriate than many others, but its excellence is only relative to the mediocrity of others. Hotel companies are frequently similar to car dealers and airlines: pricing is way too complicated; extra features often command inappropriate premiums; the industry has major sales cyclicality (too much capacity followed by absurd sales booms); the romance and promise of the ads don’t match the staff’s ability to deliver; and product basics are often ignored. More and more, I’m wondering if companies only need loyalty programs because the essence of their normal offer is so weak.

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