Hilton Hotels: Brand Differentiation Though Customer Relationship Management

1216 words - 5 pages

To:$Tom$Keltner,$CEO/Americas$ From:$0619$7389$ Date:$February$16th,$2008$ Re:$Future$CRM$direction$and$Strategy$ $ It$is$proposed$that$Hilton$Hotels$Corporation$reinvest$approximately$$2$million$dollars$in$the$OnQ$CRM$ initiative$with$the$focus$on$a$more$targeted$approach$to$better$serve$the$diverse$Hilton$portfolio.$This$ tactic$addresses$the$objective$of$significant$growth$given$the$key$issue$of$achieving$service$ standardization,$a$typical$challenge$of$service$delivery$operations.$$With$Blackstone’s$capital$backing$ (see$Exhibit$A),$the$perfect$opportunity$is$presented$for$Hilton$to$reinvest,$revamp$and$expand$the$OnQ$ ...view middle of the document...

$ Competitive$advantage$growth$is$stagnant$in$the$mid_tiered$hotels$and$decreasing$in$the$high_tiered$ hotels.$These$results$are$a$key$indicator$that$although$the$CRM$initiative$has$performed$well$to$date,$a$ more$targeted$approach$is$needed$to$deliver$the$required$return$going$forward.$ $ In$this$targeted$approach,$the$lowest$priority$will$be$given$to$the$hotels$in$the$lower_tiered$segment$as$ the$current$OnQ$CRM$program$appears$to$be$doing$well$here.$In$this$segment$we$will$simply$continue$ our$current$OnQ$CRM$initiative.$The$highest$priority$segment$will$be$given$to$the$mid_tiered$as$it$ accounts$for$the$next$biggest$segment$size$(see$Exhibit$G)$and$is$currently$experiencing$stagnant$ RevPAR$Index$growth.$A$newly$revamped$OnQ$Platform$and$the$Guest$Cycle$has$been$suggested$(see$ Exhibit$H).$In$the$high_end$segment,$the$focus$should$be$on$Conrad$International.$It$is$the$only$hotel$in$ the$entire$Hilton$Hotels$Corporation$brand$portfolio$that$is$doing$poorly$compared$to$its$competitive$set$ and$has$a$downward$RevPAR$Index$Trend$(see$Exhibit$I).$A$revamped$OnQ$Platform$and$the$Guest$Cycle$ for$the$high_tiered$segment$has$also$been$made$(see$Exhibit$J).$A$possible$factor$of$why$Waldorf=Astoria$ Collection$is$outperforming$Conrad$International$in$the$high_end$segment$could$be$the$fact$that$ Walforf=Astoria$Collection$is$completely$company_owned$while$Conrad$International$is$partly$ franchised.$To$do$well$in$this$luxury$segment$with$franchised$properties$there$must$be$a$clear$delivery$ of$expectations$to$the$franchise$owners$and$the$front$line$staff.$It$is$recommended$that$Hilton$leaders$ meet$frequently$with$the$four$Conrad$International$franchises$to$ensure$proper$execution.$$ $ Please$find$the$following$GANTT$Chart$(see$Exhibit$K)$for$a$complete$roadmap$to$successful$ implementation$detailing$when$key$tasks$should$be$completed,$the$task$lead$responsible$for$each$task,$ and$the$funds$required.$These$steps$will$ensure$that$Hilton$becomes$the$world’s$premier$global$ hospitality$business.$ $


$ Exhibits:$ $

Exhibit$A:$Hilton$Hotels$Corporation$SWOT$ $ Strengths:$ Weaknesses:$ • Wide$breath$and$depth$of$brand$–$ • Franchised$business$causes$ internationally$recognized$ problems$in$service$delivery$and$ consistency$ • No$other$company$can$compete$ on$integrated$system$ • Strong$brands$and$strong$growth$ Opportunities:$ Threats:$ • After$the$Blackstone$Group$ • Competitors$also$employing$their$ acquisition$there$is$more$capital$ own$CRM$strategies$(Marriott$ available$to$be$invested$into$the$ with$Siebel$Systems$and$other$ Hilton$to$grow$the$business$ hotels$with$frequent$guest$ programs)$ $ $ $ Exhibit$B:$Total$Calls$to$Call$Center$(2001$–$2007)$ $

29000000$ 28000000$ 27000000$ 26000000$ 25000000$ 24000000$ 23000000$ 22000000$ 2001$ 2002$ 2003$ 2004$ 2005$ 2006$ 2007$

*15.31%'increase'since'2001'in'total'calls' $ $ $ $


$ Exhibit$C:$Net$Revenue$per$Call$$(2001$–$2007)$ $


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