7 Replies Latest reply: Jun 25, 2009 1:04 AM by jerrycoin RSS

Business Plans

Alumni Steward Platinum 8 Reviews
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The last section of today's Wall Street Journal contains an interesting article on lotyalty prpgrams and their impact or lack thereof on bottom lines.
  • Re: Business Plans
    pltnmprincess Platinum
    Currently Being Moderated
    Wow, I find it hard to believe that there is little/no impact on bottom lines.  I personally seek out Marriott properties within my client's price range when my client's preferred hotels are non-Marriott.  I usually have to drive a bit further, but I can find a Marriott most of the time.  I have generated 80+ nights of revenue for Marriott this year where my client would have put me at some other chain.  I would think others do the same.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Business Plans
    tjcnewyork Platinum
    Currently Being Moderated

    Interesting topic, Stepping Stones, loyalty marketing is one of my hot buttons.  A key nugget of the WSJ article for me is this statement,

     

    "research consistently finds that profitable customers tend to make up only around 20% of a company’s customers. Break-even customers represent around 60%, and unprofitable customers around 20%." 

     

    Marriott Rewards currently has 30 million plus members.  Applying the WSJ article to Marriott, some 6 million customers make up Marriott's profitable customer base.  I speculate that Platinum, Gold and Silver Elite plus Marriott Vacation Club owners fall into that upper echelon of 6 million.  

     

    Several months back, I recall reading in WSJ that Marriott Vacation Club revenue in 2008 accounted for 22% of Marriott's revenue.  Interestingly, that amount is generated by around 400,000 owners a significantly smaller percentage than 20% of the total customer base.

     

    Yet, from the slow pace of brand integration spoken of repeatedly here, it's not clear how Marriott Rewards will encourage increased loyalty within this small but fiercely loyal segment.  Restating an earlier observation, MVCI owners are the most underserved segment of loyal customers in Marriott Rewards.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Business Plans
    tjcnewyork Platinum
    Currently Being Moderated

    An email from the CMO Council (Chief Marketing Officer Council) arrived today pointing to an interesting article. Although it is about brands in the packaged goods industry, I thought there were some lessons to be learned and applied to hospitality, specifically Marriott:

     

    "Defection and lapsed loyalty are rampant among major brands, a problem that is only worsening in the current recession.The current recession is reducing the capacity of many leading brands to attract new loyal consumers. The study has major implications for marketers and underscores the critical need for brands to more effectively engage by tracking their loyalty behavior and responding with relevant communications and offers. See  http://www.cmocouncil.org/resources/form_losing_loyalty.asp

     

    As the image below shows, Marriott Rewards is engaging Insiders and tracking loyalty behavior by measuring the percentage of travelers who extend a business trip for leisure.  For several months, a whopping 88% have responded affirmatively, yet Marriott's response with relevant offers has been limited to the Global Rate Break which ended June 2nd. Before it is too late, hopefully Marriott will seize the opportunity to regain lost loyalty and build new loyalty.  Marriott, deliver more offers that take full advantage of the trend to extend business travel for leisure and extend the Global Rate Break*.

     

    * Global Rate Break offered

     

    http://i396.photobucket.com/albums/pp50/TOWNHOUSEMEDIA/88extendbusiness4leisure-7.jpg

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Business Plans
    geomedic Silver
    Currently Being Moderated

    I see three levels of customer.

    1/ Those that don't travel enough to feel like they benefit from loyalty programs. While they are often wrong about benefits, their perception is reality.

    2/ Those that travel a lot... enough to qualify as elite in several programs. They usually don't worry too much about specific loyalty programs as they get them virtually everywhere (as I have become). For these people, on site benefits and redemption ability matters most. For me, that would indeed include extension stays. (I have stays coming up in both YYC and CPH that my wife could be joining me on... but the CPH Marriott is so dang expensive!).

    3/ Those that travel frequently enough to obtain elite level with a particular chain. These people are the ones that are most influenced in the challenge to accumulate nights within a single program.

    The article looks only at one side of the equation... attracting customers. They don't look at the downside of a progressively ugly or non-existent program pushing clients away.

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Business Plans
    Alumni Steward Platinum 8 Reviews
    Currently Being Moderated

    Value is the rosetta stone here--all customers including the most loyal should see increasingly more valuable need to buy the product, even in a down economy.

     

    So, Marriott should increase the value of its product, either as a stand alone or in competition with the other providers.  
    Simple to say, hard to execute. 

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Business Plans
    tjcnewyork Platinum
    Currently Being Moderated
    " Value is the rosetta stone here--all customers including the most loyal should see increasingly more valuable need to buy the product, even in a down economy.

     

    So, Marriott should increase the value of its product, either as a stand alone or in competition with the other providers.  
    Simple to say, hard to execute. "

     

    Well stated.  Execution is probably very complex because  perceptions of value are relative. 

     

    For example, it's very clear from participants here at Insiders that are frequent guests at full service Marriotts that high value is associated with free broadband/wifi at all full service brands.*   Similarly, Gold and Platinum elite give high value to BF vouchers when concierge is closed on weekends.

     

    There are areas where there is a shared perception of value across brands and status.  The best example is the Insider survey about extending a business trip for leisure.  Consistenly, a whopping 88% of the respondents reply affirmatively.  This indicates a very high value placed on combining business and leisure travel.  The recent promotion, Global Rate Break offered a 20% discount on weekend rates including Thursday to Sunday at participating properties.

     

    The 88% has remained constant suggesting that if Marriott comes up with more weekend/leisure travel offers, loyal Marriott customers will respond enthusiastically. As you say, the challenge is execution.  

     

    * Free Internet for elite members

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

  • Re: Business Plans
    jerrycoin Alumni Steward Platinum 60 Reviews
    Currently Being Moderated

    Right on!

     

    Here is a picture of the "Rosetta Stone", in the British Museum, to support  your comments!

    (For each location tag, you will be guided through a 3-step process to add (1) a city and a state or a city and a country, (2) a Marriott brand, and (3) a Marriott hotel.)

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