Hilton Hhonors Worldwide: Loyalty Wars

Hilton HHonors Worldwide Loyalty Wars 1. Why do you think the modern-day form of FMPs is more sustainable than the earlier forms like trading stamps and coupons? concern stamps and coupons were required to give in to newer forms of allegiantty broadcasts because oCompetitive pressure has made it demand for unifieds to innovate oTrades and coupons atomic number 18 not differentiating factors because they can be easily emulated by competitors Modern FMPs are more sustainable because they can withstand ambition due to the followers reasons oFMPs can provide individual customised experiences for separately consumer oData pine away housing capabilities of computers has made information required for such customization easily acquirable oFMPs can benefit alliances through with(predicate) mutually beneficial allegiance programs oFMPs too help in segmenting customers and formulate customized services to each segment 2. What are the benefits of HHonors Program to Hilton? Hilton wou ld benefit from the HHonors Program through the following methods oEfficient estimation of move Cost The program would provide historical information about the customers and thereofly aid Hilton to gauge the customers characteristics which in turn would school principal to better tax r scourue and yield management oBenefits from Double Dipping The program allowed transfer of benefits within Hilton and its partners which allowed two sides to earn currencies through joint customers. oBetter scope of compassing franchises/management contracts The programs ability to drive business made it more lucrative for the little hotels to strike deal with Hilton oEnhanced 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 customers popular oHelp gain corporate contracts Hiltons major(ip) business came through corporate clients and this program would aid the corpor ate travel managers ensure compliance to their boilersuit travel policy 3.What is the decision problem of Jeff Diskin? What alternatives are left with him for HHonors program with announcement of competitive rewards program by Starwood? Context Starwood, one of the major competitors of Hilton, has announced the launch of Starwood Preferred Guest Program which is anticipated to be a bigger loyalty program than Hiltons HHW which would be assist by a huge investment in advertising plight Jeff Diskin, as the head of Hilton HHonors, has to take a call on Hiltons reaction to the announcement and its future course of action. Alternatives Jeff Diskin currently has the following options to square off from oCompete point to point with Starwood Position HHonors differently from Starwoods and hold on to loyal members oCut down on its costs and deliver the same business to gain better margins 4. What should he do? Why? The various alternatives can be evaluated as mentioned in the table given below All the quadruple major hotel chains will soon start competing on frequent-stay programs thus leading to price wars which may result in serious abuse to the industry. Overtly generous loyalty programs have various risks which include the following oCustomers tend to be variety-seeking and use loyalty programs to make profits oThus even the repeating customers might go to other hotel chains oThe more the rewards, the great the expectation customers will have.Thus the rewards will tend to be ever-higher oLoyalty programs chiefly function as discount programs. Thus by offering greater incentives, Hilton will implicitly train the customers to expect lower prices which will lead to reduced margins and thus lower revenues Cost cutting measures are apparent to be limited in such service industries. Thus, Jeff Diskin should avoid loyalty wars and maintain current rewards levels. Further, he should explore differentiating Hiltons shuffling through sustainable brand loyalty. One p ossible measure could be to repositing the brand as a unique experience and create brand loyalty and brand passion as competitive advantages.