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Integrated Strategies (Winter 2009)

HHonors, the Hilton hotel chain’s customer loyalty program, launched in its basic form in 1987, making it almost as old as some of the original airline loyalty programs. In 2007, the program celebrated its 20th anniversary.

But longevity alone doesn’t make a successful loyalty program – HHonors also prides itself on continued flexibility and responsiveness to customer needs to keep it in its current double-digit growth pattern.

“There are two things that distinguish the HHonors program from the rest of the competition,” says Richard Wolfman, Director of Partnerships for Hilton. “The first is what we call ‘double-dipping,’ where members can earn both HHonors program points and airline miles of their choosing when they stay with us. Most other hotel chains require members to choose one or the other. And the other differentiator is that there are no blackout dates for hotel redemptions.”

Says Wolfman: “I would describe HHonors as both an extremely flexible program and an extremely rewarding program for our members. We try to create as much value as we can for our customers.”
 

Rewards and Recognition

Hilton’s HHonors program exists to achieve a number of objectives. “First and foremost,” says Wolfman, “is to look after our best customers – and to reward those customers who choose to consolidate their travel with us. But it’s not just rewards. We also focus a lot on recognition. So it’s not just about the fact that you stay in a hotel, you earn points, you earn miles. [With HHonors], the more you stay, the higher the status you can achieve. And the higher up you get, the more benefits are available to you on property, including upgrades, bonus points, etc.”

In fact, when Hilton asks customers what they value more – the rewards or the recognition – the results are split about 50-50. “People obviously want to collect currencies, but they [also] want to be recognized when they check in and treated as if they’re special,” says Wolfman. “Over the years, Hilton has invested heavily in front-office technology that allows us to recognize guests and to make sure we give them what they want.”

The HHonors program also allows customers a high degree of personalization. “When you go online as an HHonors member and go to your HHonors profile, you can stipulate the type of room you want and the HHonors benefits you want available to you in the room – bottled water, free Internet access, etc.,” Wolfman explains. “And you can do all of that prior to your arrival, so that when you show up at the front desk and the front office person greets you, they’ve already allocated you a room according to your exact specifications.”

The flexibility of the program is another way it has been made more personal and responsive to the needs of customers. “Members can not only define for themselves what their stay looks and feels like, but the program is also flexible in the way they can earn points and miles,” says Wolfman. “Depending on their needs, for instance, members can earn more points and fewer miles per dollars spent, or more miles and fewer points.”

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Expanding Integration

Increased flexibility and responsiveness to customers are two reasons the HHonors program recently hooked up with Maritz Inc. and its Direct Rewards program to provide a richer and more seamless merchandise component to its loyalty program.

“When people join hotel programs, for the most part they want to redeem their points for hotel stays,” Wolfman explains. “But there are a lot of people who already spend a lot of time in hotels and don’t want another hotel stay but would prefer something else. They want to have choice and control over what they do with their points.”

For those members, Hilton launched an HHonors online mall – the Rewards Store, run by Maritz – where they can redeem their points for over 5,500 items, including name-brand merchandise like Sony, Movado, TaylorMade and others; gift cards from Saks, BestBuy, or Harry & David; and even experiential rewards like having a chef cook dinner for your family, riding in a stock car, or getting skydiving lessons.

Wolfman also stresses that service is a critical component: “Obviously we go to great lengths to train our staffs to ensure we deliver the kind of service our brand promises. And we do our due diligence to make sure the third-party vendors we partner with deliver the same world-class service we deliver in our hotels every day.”

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Proof is in Redemptions

“Since we launched the Rewards Store, we’ve seen an increase of 110% in terms of merchandise redemptions from where we were before,” says Wolfman. “And overall redemptions are growing dramatically.” In fact, Hilton reports that it is seeing around a 20%-25% increase per year in redemptions.

One-stop shopping is one reason for that. “We now have a single destination members can go to in order to redeem their points for merchandise, and that makes a big difference in communications to members,” says Wolfman. “Previously, we had a number of vendors and members had to go to various different pages to look at different vendor products. The virtue of its simplicity aids communication – and as we all know, the simpler the communication, the more click-through it’s going to achieve.”

In the end, Wolfman says there’s no point in having rewards currency unless you’re going to spend it. “We want people to realize the value of HHonors points and to use the currency to the greatest extent possible,” he notes, “and the only way they’re going to do that is if we can offer them what they want and get it to them in good time. The best way we can see to do that is to recognize them when they come to the hotels, give them a huge amount of choice and variety in what they can use their points for, and give them the right environment in which they can redeem their points easily.”

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