HILTON CRM CASE STUDY

1. Hilton CRM Case Study Anqi Wang Yingyuan Deng Yueqi Meng Dongqi Wang Guoliang Li

2. C ont ents 1 2 3 4 Hilton’s Core Business Evaluate the Performance of Hilton CRM system Performance R eview and A dvice for D ecision M aker Strengthen Hilton CRM

3. Part 1 Hilton’s Core Business

4. Start with a Story…

5. Hilton Hotels The most internationally recognizable name in the lodging industry

6. Hilton Hotels Timeline Hilton’s Core Business Hilton’s Core Business

7. 1919 Founded by Conrad Hilton 1964 The Hilton Hotels Corporation Is formed, a nd b ecomes t he first h otel company t o be listed on the NYSE 1954 Conrad Hilton b uys Statler Hotel, w hich at the t ime was t he largest r eal estate d eal ever 1969 The first Double-tree h otel opens in Scottsdale, AZ 1984 First Embassy Suites o pens in Kansas City, MO Same year f irst Hampton Inn o pens in Memphis, TN 1990 The Hilton Garden Inn b rand m akes its debut 2005 Hilton Hotels Corporation r eacquires Hilton International 2007 Hilton c ompletes m erger with t he Blackstone Group’s real e state and c orporate p rivate equity funds

8. Expansion Strategy Hilton’s Core Business Franchising & Alignment with Real Estate owners is the only feasible vehicle for fast growth in the capital-intensive lodging industry

9. 4600 Hotels, resorts and timeshare properties Rooms 100 Countries and territories Hilton’s Core Business One of the largest and fastest growing hospitality companies in the world 75800 50000000 Members

10. Multi Branded Positioning Hilton’s Core Business Hilton’s Core Business

11. Hilton’s Core Business LUXURY FULL SERVICE FOCUSED SERVICE

12. Hilton’s Core Business Service Massage Hospitality Cooperate with local tour agency Airport shuttle bus Business center Fitness center Pet friendly Rental Management Audio Visual Equipment Car Rental

13. Hilton’s Core Business S W T O Recognizable brand name Diversified Portfolio Low Market Share Weak Management Competitors: Marriot The individuation of consumer choice Downturn in business travel Digitization and use of technology Innovation in Customer Services Dynamic growth in emerging markets The Customers Really Matter

14. Part 2 Evaluate the Performance of Hilton CRM system

15. Introduction of Hilton Customer Really Matter (CRM) Based on Hilton OnQ Consolidate far-flung customer data Produce comprehensive arrival reports

16. 100% Internal S ource 7 Unique Guest Experience Hilton OnQ Competitive Advantage to C ompetitors

17. Hilton OnQ CRM Focused on Hilton’s four categories of Best Guests Fostering a closer relationship with best guests throughout their lifecycle Recognition, Personalization and Customer analytics

18. Segment customers Segment sub brands – offer corresponding needs for each group Segment strategies Segmentation – General Introduction

19. Interaction frequency – best show this customer’s potential value and roughly predict future cooperate possibility Check-in Times – recognize the most likely loyal customers Online system engagement – easy to promote to Customer Value – recognize the most profitable customers Segmentation – Customer segmentation Principles

20. Less than 1 Million 1.6 Million 23 Million Hilton’s four categories of Best Guests & Segmentation – Customers The 8 million active members of the Hilton Honors program 4+: Individuals who stayed 4+ times per year Fast Rez : I ndividuals who signed up for an online reservation account Local VIPs

21. Three main brands : Homewood Suites upscale, yet casual, all-suite residential-style hotel brand. Target Customers: Traveler who want to live in a homelike environment while traveling Hilton Garden Inn Highly functional and innovative facilities hotel with warm and attached staffs Target Customers: smart , productive and practical traveler Hampton Inn casual , comfortable, personalized brand that has sincere connection with every customer. Highly value customer satisfaction . Segmentation – Sub brands

22. Segmentation – Strategy Recognition Personalization Customer Analytics Supported by technology infrastructure

23. Knowing the customer in person with all the information includes name, recent attainment. Make customers feel being recognized and being welcomed . Customize the customer’s personal needs. Giving them what they really require but not just service in a general level by collecting information both in advance or inner hotel. Personalization Recognition Supporting strategy. Making sure Hilton can quantify the customer data and make quick reactions. Customer Analytics Segmentation – Strategy

24. Delivering CRM Promise Recognize guests at the reservations center Print the Best Guests arrival report every morning The Satisfaction and Loyalty Tracking (SALT) survey Pre-assign guests to rooms and ensure that the rooms were appropriately prepared according to guest preferences

25. Evaluate Hilton CRM 99.4% of Hilton Hotel’s Brand Portfolio creates more profits than competitors by 2007 To sum up, Hilton CRM is successful! Hilton Hotels’ Brand Portfolio (September 2007) Hilton CRM ensures the rapid expansion and customer services delivery

26. Limitations Information transfer accuracy Hilton has a large scale in franchise, and the customer information was not integrated and easily available. Since the information system is not totally automatic, there will be a challenge to obtain all needed information accurately .

27. Hard to measure CRM can be measured but it will be hard to be exact. Unlike quantitative figures, CRM can be measured from both internal and external sides roughly through various channels. Limitations

28. Part 3 Performance Review and Advice for Decision Maker

29. Competitive Industry

30. Occupancy Worldwide Asia/China IHG STARWOOD HYATT MARRIOTT HILTON ACCOR 2014 Occupancy Rate of Hotel Industry

31. Financial Statistics REV PRF NPR IHG STARWOOD HYATT MARRIOTT HILTON ACCOR 2014 Hotel Industry Financial Statistics

32. Net Profit and Growth Rate Net Profit Growth Rate Resources From googuu.net Financial Statistics

33. Efficiency Call Center Data Net Revenue per Call Conversion Ratio 2001 $73.09 38% 2002 $77.64 39.1% 2003 $84.39 40.9% 2004 $85.57 41% 2005 $90.30 40.9% 2006 $99.29 41.5% 2007 $102.55 41.4% Source ： from the case

34. Customer Satisfaction “ With a score of 78 points out of a possible 100, Hilton took the leadership position…” --ACSI(  American Customer Satisfaction Index ), 2006.1 As the data shows, Hilton Worldwide led the industry this year with a score of 80, two points ahead of nearest competitor Marriott International (78 ) “This is the fifth consecutive year Hilton has either held sole ownership or shared the Hotels industry lead, according to ACSI data.“ -- By Forrest Morgeson and A.J. Singh Source ： from the case

35. Further Investment Customer Services Efficiency Customer Satisfaction Customer Loyalty Profit Competitive Industry

36. Part 4 Strengthen Hilton CRM

37. 1. Optimize internal management

38. Since t he information system is not totally automatic, there will be a challenge for information transfer accuracy. 2. The program costs a lot in operation: 93 Million Total Cost hardware and infrastructure implementation application development 40 Million 53 Million Solution to strengthen: Optimize the information transfer structure, improve the joint process between automation and manual work, execute it consistently and flawlessly across the network and reduce the management costs as well . Challenges: Recommendation

39. 2.Utilize data to to improve Hilton CRM Classic web Browser, Email, links WEB 1.0 Social web Wiki, Blogs, interactive WEB 2.0 Web of Data A ny m edia, any place, any device WEB 3.0

40. Basic Theory

41. Utilize data to improve cross-channel application for customer service and experience PHYSICAL WEB SOCIAL MEDIA MOBILE CALL CENTER

42. Social Media U.S h otel brand s increasingly use social media tools to connect customers

43. Attract more new and potential customers to get involved by social media brand promotion. Keep and increase c ustomer loyalty Collect customers diverse comments to track the performance of current customer service . Improve guest personalized experience by analyzing data. U se data to personalize and provide a list of options within Hilton' s capacity . Recommendation BIG DATA

44. Recommendation 4. Integrate all the data resources from different social media channels to help improve individual customer value management . Integrate customer value more effectively. Multi-channel provides more options for information acquirement and enlarge customer engagement

45. MOBILE AS NECESSITY A user-friendly mobile site and/or seamlessly integrated mobile brand app are quickly becoming “table stakes” for luxury hotel brands. 84% of Luxury Hotel brands now offer a mobile- optimized site experience on smartphones (up from 59 percent in 2014 ). MOBILE APP

46. Recommendation 1 Add “Read Review s ” function to enhance interactions with users and collect customer comments. Add online videos to optimize customer experience Improve Self-operated app “HHONORS ” to satisfy customer needs and improve customer experience. Source: Luxury Hotels 2015 ( Digital IQ Index )

47. Recommendation 2 Strengthen the cooperation with online travel mobile apps Attract more potential customers and create new customers . Increase more channels to enhance brand influence.

48. Thanks!