Building Loyalty From the Lobby Up
Perhaps it’s not ironic that InterContinental Hotels Group, which has always prided itself on focusing on customers, also happens to manage the world’s largest hotel loyalty program — with a whopping 43 million members around the world. What’s intriguing is how IHG maintains it with online communities.
The world’s largest hotel group by number of rooms, U.K.-based IHG owns, manages, leases or franchises more than 4,300 hotels and 620,000 guest rooms in nearly 100 countries and territories worldwide. Its seven brands include, among others, InterContinental Hotels & Resorts, Hotel Indigo, Crowne Plaza Hotels & Resorts, and Holiday Inn Hotels and Resorts.
IHG’s loyalty program, Priority Club Rewards, allows loyal guests to earn unlimited points at any of its properties. Since 2004, members have recorded more than 115 million nights in IHG hotels and more than 50 billion points worth in excess of
Already successful with its program, IHG started seeking ways to better connect with select loyalty customers while increasing bookings during the difficult economic environment. It turned to social marketing to help it achieve its goal.
“We decided we wanted to build and facilitate private online customer communities to engage with and listen to key customers, as well as deliver insights throughout the organization in program development, marketing, and travel experiences and needs,” says Cassandra Jeyaram, IHG’s social marketing manager.
IHG currently has three private online communities: Priority Club Rewards Elite Community (U.S.), Priority Club Rewards Elite Community (U.K.) and Priority Club Rewards Partner Visa Credit Card. Each community has roughly 350 members recruited from IHG’s Priority Club Rewards membership base and selected by IHG to be representative of the demographics, status levels and behavioral profiles of the membership at large.
The communities are housed at secure sites that enable IHG club members to directly connect with select users. Members participate in discussions, surveys, brainstorms, chats and other activities; they’re also encouraged to converse with each other and IHG.
“We look at the online communities as ways to connect directly with select users,” Jeyaram says. “They’re where we test ideas and figure out how to boost revenue.” The program is maintained by Communispace, a Watertown, Mass.-based creator of online customer insight communities.
The program built revenue when IHG recently asked specific members of its Priority Club Rewards Elite communities — those who were loyal Holiday Inn, Holiday Inn Express and Hotel Indigo customers — to send IHG photos of their travels when staying at these hotels. The company’s goal was to use the photos in marketing collateral — direct mail, email and brochures — to create more authentic marketing.
“The program was successful in a variety of ways,” Jeyaram says. “The online community members were very excited to see their work in our collateral, and shared it with their friends and families. But we’ve also seen a 24 percent lift in revenue since we started using member-generated content,” which began in May 2008.
IHG routinely uses member photos in its collateral now, often asking for specific pictures to support individual promotions or properties.
IHG also effectively increased brand advocacy and drove incremental revenue with a minimal budget by targeting some of its loyal hotel customers: In spring 2008, for instance, the company chose a select group of 150 U.S.-based community members — 130 of the most active members and 20 of the least active — to participate in an exclusive friends and family promotion called the Triple Points Promotion.
For the promotion, members were emailed an invitation to earn triple points for each three-night stay in any IHG hotel worldwide between May 1 and June 15 of 2008. Members were allowed to have as many stays as they liked during that time period. In the email, each member was given a redemption code, along with three more codes to pass along to friends and family.
The campaign quickly spread to friends and family in more than 30 countries, including Singapore, Saudi Arabia, Lithuania and Malaysia. Some even posted the redemption codes on popular online travel forums to further the reach of the promotion.
The original 150 Priority Club Rewards Elite Community members who were given six weeks to pass on the promotion codes generated more than 2,800 registrations for the promotion. Members earned 7.2 million points total. What’s more, with minimal investment from IHG, the Triple Points Promotion drove some $250,000 in incremental revenue during the six-week promotion.
“This advocacy campaign far exceeded our expectations, both in how far the codes spread and how many people took advantage of the promotion and booked stays,” Jeyaram says.
As a direct result of the promotion, IHG reached customers it might not have been able to and did so without any advertising, marketing or support costs incurred with traditional promotion strategies.
The Triple Points Promotion was so successful in helping IHG understand influence and advocacy among its most loyal customers that it expanded the project to include a new test group. It also may open the promotion to a wider audience.
“Our community members have shown us that simply by creating a way to truly engage with them like we do in the community motivates them to help IHG improve and grow,”
This program worked because it gave loyal fans an easy way to promote IHG to their personal networks while providing something of intrinsic value, observes Jason Baer, founder of Convince & Convert, a social media strategy and training consultancy based in Flagstaff, Ariz. “You feel better advocating for a brand,” he says, “when the recipient of your advocacy benefits directly.”
Baer praises this particular program’s inclusion of a secondary element that enabled community members to communicate to other people on behalf of the brand. “Too often, companies conduct promotions targeting their best fans, and that’s it,” he says. “That’s the social media equivalent of preaching to the converted — it’s still a viable program, but it lacks that ripple effect. The goal should always be to get your biggest fans to do your marketing for you in some respect, and this campaign tapped into that perfectly.”
The reason this is a good model for brand community management, Baer adds, is because IHG activated its fans rather than merely collecting them. “Many brands are starting to see the value in establishing and nurturing customer communities. But too often, the strategic objective appears to be rounding up and counting customers online. Way too many companies get excited about their 1,700 Facebook fans.”
The reality is, “if you don’t consistently give your fans something to do, some way to help you grow the brand, the community can become stale and pointless,” Baer says. “The consumer commitment to become a Facebook fan, for example, is minimal. One click. That’s the first of many steps in deepening relationships via brand communities, not the only step.”
Community-building best practices
IHG obviously knows how to nurture its community members. So, what would it advise companies thinking about taking the big step to launching their own online communities? Jeyaram offers the following pointers:
- before launching one, understand and define your objectives;
- identify a technology partner early to help you create the private online community — don’t do it alone;
- decide who should be in the community;
- develop a community plan to recruit members;
- develop fun activities for members to increase community connectivity and communication; and
- develop guidelines for members to abide by.
But remember, successful community-based marketing programs don’t happen overnight. “It’s all about nurturing relationships,” Jeyaram adds, “and establishing trust by being transparent, genuine and sincere about how you’re using the information you’re getting from your members.”
Dos & Don'ts of Community Marketing
eM+C asked Cassandra Jeyaram, for dos and don'ts when it comes to online-based community building. She offered the following list:
- Be transparent — members in private online communities expect honest communications from the hosting company.
- Encourage members to be candid.
- View and treat your members as advisers to the company, not just a market research panel.
- Frequently review feedback in the private online community, and determine if and what action is necessary.
- Create new discussions based on members’ feedback and responses.
- Frequently update content to keep members interested and engaged.
- Experiment with new ways to engage community members.
- Post any copyrighted materials without permission to do so.
- Include proprietary or company-sensitive data.
- Include any negative information about others or competitors.
- Ask members too many questions too often.