How Hilton Honors Its Loyal Customers
After you have taken care of customer service, what else can you do to show your customers that you care? Create a loyalty program that rewards best or frequent customers with bonuses, discounts or other goodies. Loyalty programs also present a great opportunity for partnering between non-competing brands.
"Loyalty programs were created with an eye toward having that opt-in contract from consumers so that we'd give them something of value for their permission to contact them with future offers," says Jim VonDerheide, senior director, database marketing, Hilton HHonors Worldwide. "That's why the Hilton HHonors program has been and continues to be a very successful customer retention tool."
Designed for the individual business traveler and launched in 1987, the program has enrolled just over 10 million members to date. Currently, the program has more than 6 million active members on its 18-month file.
That database is divided into tiers so that best customers are recognized as silver, gold or diamond members and rewarded with higher bonuses, double point bonuses or double mile bonuses. Epsilon is the database services provider for Hilton HHonors.
The Hilton HHonors program uses targeted, event-driven customer messaging to give different awards based on customer-specific activity. Here's how it works: Members are awarded points for stays in any of the more than 2,000 hotels in the Hilton family of hotels. Direct mail statements are sent monthly to active people. Those statements include about 14 messages on average (out of a database of about 80 to 130 available at any given time). The number on a given members' statement may vary due to space available, and the type of messages and offers will vary based on factors such as stay history, co-branded cards used and demographics. For instance, Senior HHonors members might get one special offer, while travelers who stay frequently in New York City, might get a different bonus related to a New York hotel location.
Converting to the Web
Every hour, several hundred of its members visit the Hilton HHonors Web site at www.hiltonhhonors.com for up-to-the-minute account and reward redemption information. This is possible due to upgrades made to the site about a year ago when Epsilon completed the first phase of several planned enhancements to the Hilton HHonors Web site to offer real-time account information and personalized messaging.
Hilton HHonors is currently investigating taking its site to the next level and putting its members' statements online for the convenience of customers who might prefer to have the option of receiving them that way. Says VonDerheide, "We're doing some research now as to whether we'll eventually put those online. We're not there yet."
What is available online so far is searchable information. "For instance, you can look up specifics from your account," he explains.
The Web interface and message management tools for the site were also handled by Epsilon and give members real-time viewing access to their personalized account information, including point balance, detailed hotel stay transaction data from the past 18 months, eligible hotel rewards and redeeming points for hotel reward certificates.
The company's overall strategy with creating a comprehensive service online is to offer what VonDerheide terms a "full online banking approach to our Web site." He explains, "That's what we've created and we're moving toward constant improvements. We're doing surveys, some one-to-one interviews and focus groups to investigate it further. We've had a skyrocketing number of Web users. And our contacts with customers via the Web and e-mail also have soared; this shows they want to be served this way, and we intend to offer them as many service functions via the Web as possible."
In addition to account information, each Hilton HHonors Web page has a communication to each member based on his or her personal account history. This type of one-to-one messaging can serve customers by providing them with information and help keep members involved in the program. These messages may help members make travel decisions based on accurate account information and provides Hilton HHonors with a new level of communication with its members.
Email Ramping Up
Hilton HHonors is "just now ramping up for some targeted e-mail campaigns," VonDerheide says.
Epsilon has developed a customized program that enables HHonors to initiate personalized e-mails in response to specific customer activity. Instead of general broadcast e-mails four or five times a year, the Epsilon Membership Management Engine (EMME) delivers individual message alerts to members at key incentive points. The e-mail notifications benefit the customers, who receive timely messages of approaching hotel reward milestones, as well as Hilton, which gains in customer loyalty, repeat business and measurable marketing results. The customer benefits include, for example, bonus hotel stays and upgrades or airline miles.
What impact will the Web site and e-mail have on the program? "I think the frequency of our statements will stay the same, though the quantity may decrease some as a number of people are likely to opt out of getting mail statements and just use the Internet," says VonDerheide.
But, he adds, "We will continue to offer statements and inbound telephone services. We want to offer any type of touch vehicle the customer wants."