Case Biief NKT

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Very thorough, objectives are OK but a little vague, creative alternatives and good
rationale Ior recommendation. 48/50

Hilton HHonors Worldwide.

Problem

Hilton`s competitor Starwood, has announced the launch oI a loyalty program that
threatened to take away Irom customer base. Also with the current acquisition oI the
Sheraton and Westin hotels, Starwood had a bigger network that the customers could
beneIit Irom. JeII Diskin, had to identiIy how to Iace the increasing competition that
Hilton`s loyalty program was going to encounter in the coming days. Hilton didn`t have
an extended network, but it did have the advantage oI a well-established loyalty program
in place that had been successIul in increasing customer spend at the hotel.
Objective
O ncrease customer loyalty through increased customer satisIaction.
O #etain current members in the Hilton HHonors loyalty program.
O DiIIerentiate Irom competition thru the experience` attribute.
O aintain the cost oI the loyalty program and evaluate the same.
lternatives
. mitate Starwood`s reward program i.e. make Hilton`s HHonors Program similar
to Starwood PreIerred Guest program delivering the same beneIits. Thereby
avoiding the risk oI loosing the current members in the Hilton HHonors Program.
This would allow the company to provide the same Iunctional beneIits to its
customers as it competitors but Iail to appeal to the emotional and selI-expressive
Case Biief NKT
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beneIits oI the customers. Also imitating the competitor`s strategy the company
may beneIit in the short run but will not beneIit in the long run.
2. Consolidate along with a competitor to increase network and deliver more access
to the customers. Although it may allow customer to use the loyalty program
more, Hilton does Iace the task oI identiIying the right company to consolidate
with so that its brand equity is not aIIected. Also there can be no standardization
in service delivery, and loyalty to the Hilton brand may be hard to measure.
3. Asses the relationship potential, develop and strengthen the current relations with
the members in order to maximize the potential and proIitability oI each relation.
This would require Hilton to improving the stay experience Ior its members and
Iocus on delivery oI service and emotional beneIits oI transaction. #esulting in
increased satisIaction leading to loyal customers.
4. Position the loyalty program diIIerently so as to not compete with Starwood`s
program directly. This will require the company to design a new marketing
campaign, which will increase cost and the success oI the same will depend on
how the customer reacts to the campaign.
oice:
n my opinion Hilton should Iocus on the relationship management and delivery oI value
to the customers. Customer loyalty is a result on customer`s emotional connection and
experiences with an organization`s people. The loyalty program needs to beneIit Irom the
strategy to improve the stay experience oI the guest at the Hilton hotel. Customer needs
to be given the assurance that Hilton understands their needs and delivers on the same
thereby increasing customer satisIaction. This would require the company to train and
Case Biief NKT
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empower the employees to handle customers request and problems eIIectively. t will
also be important Ior the company to develop a scorecard based on the #ATE# model to
eIIectively evaluate customer relations. Also assessing the relationship potential will help
the company identiIy the complexity oI the relation and value potential Iurther deIining
the amount oI resources that need to be allocated to gain customer loyalty.
Further Hilton`s customers are game players who are well aware oI Iunctional beneIits oI
the loyalty program, creating and delivering on the emotion beneIits by understanding
customer value will result in customer stay at Hilton network wherever possible. t will
also help with non-members as they will be able to identiIy the value oI staying at Hilton
which may result in increased spend at the hotel. This strategy will also help target the
oIIerings to the customers and identiIy the right mix oI rewards Ior the members resulting
in reduced the churn cost and increase the proIit margin Ior program.
%radeoff
. t does risk the loss oI its members to it`s competitors iI it Iails to capture the emotional
aspect oI the transaction. I the Iocus oI customer experience and service Iails to deliver
then the company will be more venerable to the competition. t will also have to
consistently redeIine and deliver to match customer expectations and maintain loyalty to
the brand. retention oI customer allows Ior increased revenue and loyalty to the brand but
this is a result oI consistency oI customer experience across all oI the Hilton properties.
Any gap in service delivery through any oI the touch points will aIIect satisIaction in
turn aIIect loyalty.
Case Biief NKT
Naich ,

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The managers have to understand that is the Iunctional beneIits that are the precursor to
the emotional beneIits. Hence they have to keep them consistent completion and
customer expectation. Thus ensuring the loyalty program is a total product concept.