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Hotel industry has had tremendous shift from the traditional services where the customer sought for the services to a level where the industry has to aggressively market its brands to meet the expectation of the ever changing market (Brown, A). Customer relation plays a central role in the development of the strategy aimed at improving and increasing the sales prospects of the industry. The management of these relations is therefore very cardinal and inevitable in the industry’s pursuit to success.
This paper looks at the overall customer relations management aspect of the Hilton hotel. First, the paper looks at a brief over view of the hotel. In the overview the paper looks at a brief history of the Hilton chain of hotels. Having been started by Conrad Hilton in the 1919, the hotel has indeed undergone a relatively substantive transformation both in infrastructure and service delivery. Besides, the hotel has over the period undertaken numerous reforms in its service delivery prospects. The paper addresses the issue of competition in the market. Ideally, competition is a key driving force in any business that be. The paper looks at the possible changes that are being experienced in the ever competitive hotel industry. In deed the customer relations management strategy are very central in this analysis. The paper takes an in-depth analysis of the customer relation strategies taking central considerations of the versatile market.
Any markets will always be segmented for one reason or the other. The paper addresses the aspect of customer segmentation by looking at the criteria used in the industry’s segmentation process. The customer relation chain is also very a vital principle in the decision making on the value chain of any industry. In addition, the intimacy of the industry with its customer determines the market trend of any firm. The paper addresses this central aspect of CRM with equal zeal.
The development of the HHonors program by the Hilton hotel industry has been a central component in its ever-expanding business. The paper looks at how the check in information is analyzed in the industry’s quest to honor customer loyalty. The loyalty programs have considerably catapulted the hotels turnover over the years. The paper looks at the future prospects of utilizing the strategy even more to harness much from the market.
The paper wraps up by making recommendation on possible policies for adoption to beef up the industry’s prospects. Recommendations are made with a projection of a three year period. The paper then gives a brief conclusion on the future prospect of the Hilton hotel industry based on the discussion.
2.0 Hotel Industry Overview
The hotel industry has robust and overwhelming prospects. However, this prospect can only be tapped with proper management and sound planning. Every traveler will always yearn to access some facilities that offer an alternative home away from home. Ideally moving away from home need not present a lonely feeling. Rather the travel should present an exceptional and worthwhile encounter. Besides, the travel should equally offer office away from the usual working office.
The requirement in the hotel industry today is that the en suite provides should have separate bedroom and living rooms. According to the American hotel and motel association for example, the number of such all suite has risen over the years to about 5% of the hotel facilities available. Ideally this approach has tried to address the sections of the market hat had been previously overlooked. In particular this addresses the needs of families who travel together and yet have to book in separately. In addition some business people travel and have a dire need for combining business and pleasure. The all suites offer such customer satisfactory services and their embrasure has been indeed a milestone.
The hotel industry is so competitive and yet very fragile that any loopholes in the customer relation management would lead to massive drop backs in terms of turnover. Any firm in the industry that has to turn in the sales has to adequately strategize on its customer relations management. This relationship with the customer will not only have the customer acquired but will also go a mile further by ensuring the very customers are retained.
It is notable that the most of the player in the hotel industry are putting in place some loyalty programs as a way of retaining the acquired customers. In addition, in their quest to even bring on board new customers, they are adopting price leadership to ensure that their bid appears most competitive yet their services are equally invaluable.
3.0 Overview of the Hilton Hotel
Hilton hotel has over the years lived above board in the hospitality industry. It brands have had exceptional allures and to date the industry is developing new, lucrative and yet above board brands. The upscale and full service catering industry has particular interests in the hospitality ventures in travel and leisure guests. Fervently, one will recommend Hilton to anybody who wants a distinctive hotel.
The whole idea of the Hilton chains of hotel came into a real reality after the great granddaughter of Conrad Hilton, Paris, a daughter of one of the sons of Conrad Hilton, took the whole dream to a high realizable level (The History of Hilton Hotels). Paris has over the years developed into a real hotel magnate. Today, the hotels are known for offering above board and exclusive world class accommodation facilities in major cities in the world. Commonly, the hotels are known for the Hilton Meeting Business Centre. The hotels are known for their comfortable and prestigious services world over.
Internationally, the Hilton hotel is known for its Hilton Meeting Business Centre. The chain gives exceptional priority to business travels (The History of Hilton Hotels). The hotel has over the years since inception led the road for business executives on the road. The managing director in charge of sales sees the dire need for the emphasis of the meeting for business as a mode of knowledge exchange and inevitable for the development of business executives.
There are also official hotel groups of athletes in the UK, the Great Britain and Northern Ireland. The hotels have also developed programs on the computer to enhance the preference of the customers. Memorable, is room 902 in Amsterdam famously known for the first bed-In, staged by Yoko Ono and John Lennon in 1969 to enhance peaceful coexistence. Notably the Hilton hotel industry is the most recognized firm in the global lodging industry. The hotel has offered services for over 80 years to date. The hotel puts expended consideration on the needs of business and the desire of the leisure travelers for quality yet very exceptional services. Within the without the tides the Holton hotel chains have remained above board in its quest for service delivery.
4.0 Competitor Customer Relations Strategy
The upsurge of the business world over has seen a similar increase in the competitiveness of the hotel business. The positioning of the Hilton hotel this fluid and fragile market is therefore of central import in the hotels pursuit for taking a large market share. There are a few hotel chains that are offering substantive competitions to the Hilton hotel chains. Amongst them are Accor hotel chains, Starwood hotel chains and the Intercontinental chain of hotels.
4.1 Accor Chain of Hotels
The chain of hotels has developed a management table that is used in ensuring that the key components of it development agenda are addressed. The table details the management objectives for each theme. The table puts expended value on its customer and all the projects put in place are meant to ensure that the customers are addressed to satisfactory level.
The management monitors the performance of each theme. In particular the management monitors closely the numbers of the customers being turned in. in additions the management closely looks at the concerns of the customer and are addressed expeditiously to show to customers their value to the chains. The chains have also introduced loyalty programs. Notably, the chains offer free weekends for each three or more visits to the premises.
4.2 Starwood Hotel Chains
The hotel chain has built a wide network. The Starwood hotel has developed networks with American express and the MBNA Canada Bank. This makes the hotel very competitive as the prospective customers are able to access services so readily after making payments locally. Besides, the hotel has affiliated itself to 32 airlines. This airline allows the hotels customers to redeem their loyalty points for the sake of their travels under the SPG Flight program. Records indicate that the hotel has 41 million members of the program. This membership indicates the hotels market niche.
4.3 Intercontinental Hotels Group
The hotel has a developed an integrated website through which it effectively markets its brands and the brands of allied firms. The hotel group has an elaborate call centre and loyalty program. It delivers about 70% of its premise to customer at night (Buttle F., 2000, p 64). The brand seems to offer unmatched and flexible services. The group delivers reservation to allied hotels at very significant rates. The hotel has equally developed a six pronged approach to marketing and sales making the brands under its umbrella renowned world over.
5.0 Hilton’s CRM Value Chain
The central objective of developing a value chain is to understand the best approach to gaining competitive advantage over the competing firms in the industry (Juliana). The Hilton hotel has developed a number of activities geared towards having the industry have an edge over its competitors. Ideally the value chain adopted by the Hilton hotel offers its customers a level of values slightly above the cost of the services without compromising the quality of the services. Subsequently, the hotels use the strategy to make profits margins that are not extrapolated.
5.1 Customer portfolio management
The understanding of the nature and the fragmentation of the market is inevitable for any business. The Hilton hotel company has put this component of customer portfolio management as a central component of management. The company places expended importance on the different segments of its market. The segmented market assists the hotel to understand the customer more than the hotels likely competitor (The Value Chain). In addition, segmentation ensures that the customers are retained besides offering an opportunity for the ease of penetration.
The Hilton hotel has adopted three segmentation approaches. In particular the mission of the customers is taken as central segmentation criteria. The demographic patterns as determined by the data mining have also informed the hotel over its segmentation approach (Juliana). The age of the customer may also determine the desires and the demands of the customer; these ages have been analyzed to determine the possible market needs.
Though social class has been viewed overall as a poor method of segmentation, it incessantly happens to play an inevitable role in the segmentation process. The criterion maintains a discriminatory power and can not be waived away. In particular, the expenditure behavior of pensioners and other low income cadre of customers are utterly distinct and it is inherently this criterion that distinguishes them.
The hotel has an elaborate value chain system that handles internal logistics, the operations of the CRM department, outbound logistics, marketing and sales and services. Ultimate, this chain has over the time assisted to improve the sales of the hotel chains.
5.1.2 Data mining
The techniques used here are meant to assist the hotel to make sense of the complex data available and make meaningful resolution from the data that can be made practical. The process assists the hotel to identify the relationships between certain variable. For example the hotel would use the data to determine the correlation between the seasons and the hotel booking in patterns.
The data obtained and analyzed is used to forecast the expenditure patterns in days to come. In addition the hotel uses the data to identify the winners of its loyalty programs and award them. Further the data mining process gives insight into the effect of the loyalty program on the sales and can be used to make improvements on the loyalty programs that are in existence. Ideally, the hotel would increase the base of the program if its overall effect has bolstered the sales. The process is elaborate in orientation and it goes through stages for the hotel to adopt the requisite approach to segmentation and marketing.
The marketing campaign for the hotel will address the market in accordance to the life cycle of the customers.
5.1.3 Customer Intimacy
The Hilton hotel ahs developed customer intimacy through well cultivated relationships with customer with a core objective of serving them better and satisfying their unique needs. The hotel seeks operational excellence through close interaction of customers and customer prospective. The process of operational excellence automatically translates into customer intimacy. In the long run the mindset of the customer plays the retention role of the customer and bring new one on board.
5.1.4 HHonors Program and the Conversion Of The Points
The loyalty programs are adequately introduced to retain customers and bring new ones on board. The most common loyalty program is the HHonors. This program allows customers to win stays in the 3500 chains world over. When one accesses services from the Hilton hotel points are won depending on the cost of the services. The point can be converted into travel miles or stays in the hotel chains.
HHonors presents a world of exceptional and cherished rewards. You’ll discover rewards you won’t find with any other hotel program – including those that are just right for you. Redeem your points for Diamond Jewelry rewards for members in the Mexico or Asia/Pacific regions. HHonors leisure Rewards offer a chance to redeem your points for a vacation the whole family can enjoy. Earn miles – without even taking a flight. To earn airline miles for your stays, simply stay at a Hilton Worldwide hotel, pay an eligible rate, and present your airline frequent flyer program account number at time of reservation and at check-in.
5.1.5 Customer Loyalty and Customer Experience
The momentum of customer experience will always go a long way in the developing the loyalty of the very customers. Ideally, the hotel has always gone beyond the browser to offer something above the browser presentation. The experiences the customers get the hotel chains further their loyalty. The hotel chains has also invested enough in the improvement of cross-channel interactions, this has essentially been the hotels priority over the past 6 years.
The cross channel property of CRM has been the hotel chain’s key differentiator. The hotel chains have relentlessly tried to marry what happens in the call centers and what is presented on the website. Practically and world over, there has always a delinked relationship between the website and the call centers for most businesses, this characteristic behavior of the hotel chains sets it apart.
5.1.6 Network Development
Suppliers of services in any industry determine the extent of the success of any business. The Hilton hotel holds its supplier in such high esteem that they have been taken as part of the hotel. While this is utterly meant to ensure that the services and goods of the right quality and quantity are supplied; it goes along way in facilitating sales promotion of the hotel.
The role of the customer service is to ensure that the needs of the customer are met. The Hilton hotel has invested much resources aimed at making sure the needs of the customers are established. In addition, the hotel provides forums through which the customers can give their views about their impression of the hotel. This provides the hotel with information concerning future innovations and development of the hotel.
Customer complains are taken with expended zeal. The complaints of the customer are made through calls; the numbers for this purpose are provided to customer and customer prospective. In the event of a complaint, the management takes it upon itself to apologize and explain. In circumstances where the customer still feels dissatisfied, the money paid if any is refunded.
The Hilton hotel takes excellence in service delivery as a must. Presumably, the observation or experience in terms of service superiority to the visitor is significantly related to the setting they wanted to be in. for the Hilton hotels a lot of premium is attached on the efficiency and the effectiveness of the services delivered to its customers. The hotel takes excellence and efficiency as intertwined and inseparable. The hotel’s service quality puts focus on the cautious management of the process involved in the production and distribution of services and products.
The hotels goal is to provide products whenever and wherever customer wants them, refine its services and develop products that are new and capable of suiting the needs and desires of he customers. Driven by this goal, the Hilton gives prominence to customer service. The staffs have adopted basics for management including smiling and greeting of the customer, good service, presentation and deals with service challenges themselves without seeking a manager.
The Hilton management, rather than supervising its staff, coaches its staff towards the delivery of quality services. The employees ate taught and provided with information rather than being given commands. In addition there is internal competition which prompts innovation amongst the staff. For the Hilton hotel the most valuable asset is its staff and it is treated with expended zeal. Ideally, they are the employees who should provide the requisite service to the customers. The Hilton management has given the disabled customer sufficient attention by providing facilities that can serve them.
The hotel chains have partnered numerous businesses for varied business objective ends. In particular the partnering with numerous airlines has played a pivotal role in its quest to have its partners readily redeem their point for miles. The hotel has also partnered Magnon Promotion Inc. The company has been quite handy in the hotel chains prospects for carrying out sales promotion and advertisement. The hotel has also partnered with the US Olympic teams that is being used not only for sales promotion but is also being sponsored for its activities.
220.127.116.11 Ownership and Investors in the Hilton Hotel Chains
The Hilton hotel chains are owned by Blackstone group. Formally the hotel was owned by the descendents of the Hilton family. The idea was formally initiated by Conrad Hilton. The ownership was through shareholding. Blackstone group bought the hotel chains in 2007.
6.0 Managing the Customer Life Cycle
The central strategy for the customer life cycle is the development of elaborate and cordial customer relationships. As a process CRM is a process and strategy that endears to learn the behavior and the needs of the customers in order to make good their relationship with the business. The hotel chains have developed an elaborate communication network for its customer.
The strategy has been enhanced further through well designed software that ensures that the customer concerns are dealt with forth with.
Any customer cycle consists of three levels. First, the business has to acquire new customers. The customers have to be maintained through the business cycle of life, through the customer relations enhancement stage. Finally the customer has to be retained altogether. CRM software is developed to streamline CRM activities at each of the three phases of customer relations management.
6.1 Customer Acquisition
The Hilton hotel chains have developed contact management brochure that are used in the direct marketing of the hotel. The brochure effectively market and promote the product. In addition, the hotel chains have developed elaborate software with leads that get the prospective visitor of the site to the next link sites. The modules developed help in speeding up the customer acquisition process and reduce the cost of customer acquisition.
The chains have also acquired new customers through the database visiting. The database allows the hotel chains to identify customer prospective and send them some hotel profiles.
6.2 Customer Relationship Enhancements
The hotel chain’s CRM department has had its members undergo a stream of training to understand the behavior of its customer. The understanding of the behaviors of the customers leads to a proper understanding of their needs and desires. Subsequent, the provision of the established needs and desire lead to enhanced profitability. This happens particularly with the existing customers through cross-selling. Besides, based on the analysis from the CRM department services of the hotel and the goods are customized in accordance to their preference and needs.
6.3 Customer Retention
The acquired customer is of paramount importance than the customer that is yet to be acquired. The retention of the older customers of the hotel chains are therefore of prime import. The hotel chain places a lot of premium on this cadre of customers because the hotel chains believe these cadre of customer play an important role in their quest to getting new customers. Besides, if the acquired customers only replace the older customers, then the essence of the CRM department lacks in total. In addition, the long run effect would be that the hotel chains will be spending much on sales promotion.
The customer lifecycle is of primal importance to the Hilton hotel chains. The CRM department treats all the level of the chain with equal importance and zeal. This level will always depend on each other and neglecting any of the level dwells blow on the entire customer acquisition process.
Customers have also been retained through strategies of exceptional delight in them from the hotel chain workers. In additions, the hotel provides some added value by including some exceptional services to the services. Complementary products have been set aside for this purpose. This does not only add value but it also develops a social bond between the hotel workers and the customers. Subsequent, the trust of the customers is acquired through respectable response and timely ones.
Though the hotel is performing relatively well there is sufficient room for the increased service delivery and increased income (Buttle, Francis, 2004). Given that the hotel is towing the right track, improvement of its service delivery would be attained through several policies.
There is a widespread misconception the Hilton chain of hotels are a preserve of the affluent. The hotel has to embark on a sensitization campaign to demystify this attitude. Once this has been undertaken there will high prospects of acquiring new customer to the hotel. This will be done through advertisement through mass media and the internet. Face Book and the Orkut are also becoming effective communications and will be effectively utilized towards this end.
7.2 Customer Retention
The loyalty program is paying sufficient dividends for the hotel chains. Subsequent to this, the hotel should expand its loyalty program to bring several members on board. This is because the loyalty programs are in themselves a mode of sales promotion and a way of customer retention.
7.3 Increasing Low Income Cadre of Service
The Hilton hotel chains are apparently revered for the high quality and expensive services. However, given that the hotel endears to ultimately serve the community, the then there is direly needed to cater for the diversity in society. This would be achieved through the introduction of lower cadre hotel services that are relatively cheap yet with high quality and standards. This will also demystify the perception that the Hilton hotel chains are a preserve of the rich and the affluent in society.
7.4 Employee Welfare
The Hilton hotel chains have rewarded their employees relatively well. Nevertheless, the reward program would be expanded to ensure that all the staff is rewarded in a way. Most importantly annual increases in the chain workers salaries would go along way in ensuring that the works take an active role in the sales promotion prospects of the hotel chains.
7.5 Introduction of Sales Promotion through Cell Phone
The mobile technology is growing faster than any other technology, particularly in third world and developing countries. This third world and developing countries have an equally robust niche for the hotel industry. The hotel would link up with subscribers to undertake elaborate customer acquisition programs. If the subscriber numbers offer any sufficient reason for adoption, then there is all reason to adopt this medium.
7.6 Three Year CRM Strategy
To increase the sales of the hotel chains, the hotel will develop a number of customer relations strategies over a period of three years.
- The hotel chains will beef up its advertisement and marketing cost benefit analysis such as can be able to cut down on the marginal cost incurred in the advertisement process. The hotel chains will also try to measure the effectiveness of the CRM campaigns through an elaborate monitoring and evaluation process.
- The hotel chains will also endeavor to increase its customer satisfaction through measures such as enhanced responsiveness through customer centered approach to response. The customers’ concern will be taken as the central theme of response by the CRM department.
- The hotel chain will expand its loyalty program aimed at not only retaining the customers but also expanding their demand for the chains services and goods. The loyalty program will equally be fragmented into cadres to cater for the diverse income cadres of the hotel chains’ customers.
- New services and product packages will be introduced to cater for the low income cadre of the customer. However, their income notwithstanding, the service and product quality of the hotel chains will remain above board.
- The hotel projects to increase the retention rate of customers, and ultimately reduce the customer churn. In addition, it will proactively endeavor to retain the customers a little longer. Overall, the central objective will be to reduce the turnover of customers.
- The hotel will projects its target towards increased customer self service. This will not be allowed to compromise the responsiveness of the staff towards the needs of customers. Subsequent, the accessibility of the CRM staff will be duly enhance, though with due diligence to reduce the cost of interaction per customer.
- The promotional prospects of the hotel chains will be reviewed over and over to ensure that the process is more effective. Products and services will be developed based on the history of customers, their preferences and likely fashions and the customers’ interests and demands.
- The hotel chain over the three year period will adopt elaborate customer centric approach to marketing. The CRM department will channel at least 40% of its efforts towards this course. This is projected to leverage the income by an estimated 25-30% increase in the overall income of the hotel chains.
The Hilton hotel offers world class hotel facilities. The hotel has chains world over and there offer a reliable option for a hotel. The hotel also offer loyalty programs that can be accessed world over. Given the hotels linkage with international airlines, the hotel offers an effective and all round base for leisure venture. Summative the hotel is worth the cost as it offers quality for the customers’ money; one can count on the hotel for quality services and expended efficiency and efficacy.
It also needs to be appreciated that for the business to grow, the entire process of customer needs be interlinked in a somewhat progressive and harmonious manner. Lapses in the process will automatically cost the business. Where provisions are provided for the rewarding of the customers through their loyalty, it should be opened up to allow for transfer or subsequent redemption for other purposes. This will not only retain the customers but will also facilitate the acquisition of new customers alike.
The interaction of the service department and the customers is of equal and pertinent importance to the business. This interaction should therefore professionally and strategically undertake to meet the desired end. There ought to be no oversights and underestimation or overestimation. Ultimately, customer relation management is about interactions; very strategic interaction, that has due purpose.