Hilton Hhonors Worldwide: Loyalty Wars
Hilton HHonors Worldwide: Loyalty Wars
1. Why do you think the modern form of FMPs is more sustainable than the earlier forms like trading stamps and coupons?
• Trading stamps and coupons were required to give in to newer forms of loyalty programs because: o Competitive pressure has made it necessary for corporates to innovate o Trades and coupons are not differentiating factors because they can be easily emulated by competitors
• Modern FMPs are more sustainable because they can withstand emulation due to the following reasons: o FMPs can provide individual customised experiences for each consumer o Data ware housing capabilities of computers has made information required for such customization easily available o FMPs can benefit alliances through mutually beneficial loyalty programs o FMPs also help in segmenting customers and formulate customized services to each segment
2. What are the benefits of HHonors Program to Hilton?
• Hilton would benefit from the HHonors Program through the following methods; o Efficient estimation of “Walking Cost”: The program would provide historical information about the customers and thus aid Hilton to gauge the customers’ characteristics which in turn would lead to better revenue and yield management o Benefits from Double Dipping: The program allowed transfer of benefits within Hilton and its partners which allowed both sides to earn currencies through joint customers. o Better scope of gaining franchises/management contracts: The program’s ability to drive business made it more lucrative for the smaller hotels to strike deal with Hilton o Enhanced customer relationship: The program enabled Hilton to provide customised hotel experiences for each of its guests which would in turn help Hilton and its collaborators become the customer’s favourite o Help gain corporate contracts: Hilton’s major business came through corporate clients and this program would aid the corporate travel managers ensure compliance
1. Why do you think the modern form of FMPs is more sustainable than the earlier forms like trading stamps and coupons?
• Trading stamps and coupons were required to give in to newer forms of loyalty programs because: o Competitive pressure has made it necessary for corporates to innovate o Trades and coupons are not differentiating factors because they can be easily emulated by competitors
• Modern FMPs are more sustainable because they can withstand emulation due to the following reasons: o FMPs can provide individual customised experiences for each consumer o Data ware housing capabilities of computers has made information required for such customization easily available o FMPs can benefit alliances through mutually beneficial loyalty programs o FMPs also help in segmenting customers and formulate customized services to each segment
2. What are the benefits of HHonors Program to Hilton?
• Hilton would benefit from the HHonors Program through the following methods; o Efficient estimation of “Walking Cost”: The program would provide historical information about the customers and thus aid Hilton to gauge the customers’ characteristics which in turn would lead to better revenue and yield management o Benefits from Double Dipping: The program allowed transfer of benefits within Hilton and its partners which allowed both sides to earn currencies through joint customers. o Better scope of gaining franchises/management contracts: The program’s ability to drive business made it more lucrative for the smaller hotels to strike deal with Hilton o Enhanced customer relationship: The program enabled Hilton to provide customised hotel experiences for each of its guests which would in turn help Hilton and its collaborators become the customer’s favourite o Help gain corporate contracts: Hilton’s major business came through corporate clients and this program would aid the corporate travel managers ensure compliance