Starwood Hotels Launches Secret Program to Acquire Customers

Picture of Contrarian Marketing

Starwood Hotels Launches Secret Program to Acquire Best Customers

This Case Study featuring Starwood Hotels (Westin), is instructive about how contrarian marketing is ‘not magic’, but rather ‘just math‘.

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One of the world’s largest hotel and leisure companies, Starwood Hotels & Resorts Worldwide, counts among its holding nearly 1,000 properties across the globe. It began in 1995 from a nearly bankrupt real estate investment trust and grew into one of the world’s largest hotel companies with a value exceeding $14 billion (Sales & Marketing Mgt. #158, “A Transformative Experience, 2006).

Picture of Starwood and Westin Hotel Lobby

Starwood took customer segmentation to a new level with a “secret” pilot program launched in late 2009; one that explored new ways to identify prime customers based on factors other than frequency of stay, the key measure in traditional hotel loyalty programs. Guests’ earning potential and their ability to influence other travelers was also measured.

It was “secret” in that the hotel chain took great pains to keep the details under wraps despite inviting thousands of customers to participate. There was even a code name for the pilot project, which was separate from Starwood Preferred Guest, the company’s primary loyalty program for frequent guests, and the Ambassador program offered to select customers in 2008.

More unique, they targeted travelers loyal not only to Starwood but to competitive hotels. In addition to gathering data, the focus was one-on-one relationships between the customer and a designated Starwood ambassador, whose job it was to make their Starwood experience memorable by determining what mattered to each guest and how to make their stay even better. From the moment a guest came through the door, the hotel staff knew how to make him or her comfortable, whether through offering up herbal drinks and scented candles or providing access to a local fashion show. Celebrity-level chefs and “heavenly soft” beds helped increase each experience and in the process enhanced customer loyalty.

In other words, Starwood made special efforts to offer individualized, personalized service: service that guests ultimately must have determined made a difference. As of 2010 Starwood is expanding the pilot. They are inviting more overseas travelers and exploring “breakthrough” ways to discover and engage new, high-value customers, as well as new ways to benefit existing guests (USA Today, March 11, 2010).

“We’re reinventing the hotel experience,” said CEO Steve Hayer in 2006. “There are different needs for different types of travel, and it’s not just about price and location. Our bet is that it is all about experience”.

It is also about quantitative marketing—looking at factors beyond how often guests stay and evaluating their lifetime growth potential in order to rebrand what is basically a commodity (a hotel room). It’s a contrarian move, one that can translate to increased revenue.

Source:  Excerpt from the Contrarian Marketing Book  Chapter 1:

By Nick Mavrick

You can find Nick Mavrick on Google+

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