Hilton Case

Hilton Hotels – Brand Differentiation through Customer Relationship Management

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Introduction •

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Hilton Hotels Corp. Customers satisfaction - problem is taken care of by hotel staff and the flawless stay. Late 2003, Hilton spent a whooping $50 Million on a customer information system. The customer information system – OnQ. Part of 2 year old customer relationship management strategy. “Reason for being”, “100% percent customer satisfaction” and “Customer really matter” – Hilton Hotels Corp hospitality.

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OnQ •

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70% custom coded system. Custom components - Property management system, CRM application and Hotel-owner reporting module. 4 TB of customer profile info managed in IBM’s Informix database. Pegasus Solutions central reservation system. Newmarket International’s Delphi sales force automation tool. Modified Legacy revenue management

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Advantages of OnQ •

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Online room reservation through Hilton’s central reservation system. Extra attention to VIP customers – spending increased from 40% to 61%. Tracking fraudulent customers – taking advantage of “100% guest satisfaction”. Hhonors frequent guest program – building customer loyalty. Customer get rooms based on their preferences, meeting their needs and faster service. 3/18/12

Future developments •

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OnQ as a decision support tool. Reservations held for Diamond and gold customers. Guests can include what they want in their room – water, extra pillows, treadmill etc. Additional services – golf, spa, theatre packages etc. Building web based connections – corporate travel departments to directly book rooms from its central reservation system. Rolling out portals - booking employee

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Question 1 What are the benefits and drawbacks of OnQ system at Hilton?

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Benefits of OnQ •

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Facilitates better service – employees having clearer idea about customer and their previous Hilton experiences. Build customer loyalty – Hhonors frequent guest program. Establishes value of a customer – extra attention to VIP customers increasing their percentage of  spending. Identification of rare un-valuable customer – reducing unnecessary cost to Hilton. Faster service times – in hand knowledge about the customer preference enables faster allocation of rooms with specific facilities. 3/18/12 Increased

revenue generation – sale of 

Drawbacks of OnQ •

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Presenting deep customer histories to front desk at Hilton. It is very hard to update and keep a track of  the preferences of individual customers and the history. Information about customer experiences would become obsolete with time. Customer preference may change at any point of time as they might expect to experience something new. Huge cost involved to satisfy the specific needs of customers. 3/18/12

Question 2 What does Hilton have to do create a competitive advantage through OnQ? Provide some specific examples

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Things to do to gain competitive advantage The OnQ has to be more than just a customer information system. It has to be developed into a decision support system.

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Hilton must record accurate customer data and be able to have this data presented clearly enough so that it can be used to help make decisions. Effective complaints management system that helps to resolve dissatisfactions faced by customers and ensuring it wont occur in future stays. Providing new themes in their rooms and enabling guests to experience new themes. 3/18/12

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Case Study Executive Summary In there efforts to become one of the world’s premier hospitality firms, Hilton Hotels identified some key problems within the firm that need to be solved. One problem the firm identified was that Hilton Hotels lacked outstanding technological innovations. They also saw a problem with the lack of IT infrastructure in the firm, and that the organization had no way of maintaining its relationship with its valued customers. Another problem that the firm saw was that there was a need for man-power in order to properly build and maintain these strong relationships with customers. The causes of these problems were due to forces in the industry, both from competitors and consumers. Hilton Hotels conjured up some great solutions for there different problems, and the solutions were all found in technology. Solutions for the problems included, Hilton OnQ, CRM, Using Call Centers to optimize the CRM concept, Best Guest Arrival Reports, and The Satisfaction and Loyalty Tracking (SALT). In hopes that Hilton Hotels would continue in their growth via the use of technology, my recommendations were also centered around technology. I recommend the expansion of the OnQ and CRM technologies, as well as the implementation of free 3/18/12

Problems •

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Hilton Hotels was lacking the technological innovations that made other firms in the industry really stand out to new customers while, maintaining and building relationships with their valued customers. Lack of an IT infrastructure that would enable employees to deliver great customer service. Hilton Hotel did not have an innovative way to maintain and strengthen the relationship they had with their valued customers.  There 3/18/12

was a need for man-power along with

Causes of the Problems •

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 The pace of innovation, via technology, in the hospitality industry was growing tremendously and Hilton Hotels needed to keep up to remain competitive in the industry. The force from their competitors was weighing in on them. Hilton also had no way of 

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Solutions to Problems •

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Hilton OnQ – this IT Infrastructure created by the Hilton gave their firm a nervous system. This allowed customers to have a one-stop shopping of an integrated solution, and also allowed employees to provide excellent customer service on cue. The system was able to support the property-level operations of every Hilton Hotel, regardless of its size or segment. OnQ is a competitive advantage and, it helped Hilton to aggressively expand at a quicker and more consistent pace. CRM – CRM was an addition made to the OnQ infrastructure. It utilized technology to give Hilton a solidified relationship with its premier customers. CRM added a holistic view to excellent service, and 3/18/12

More Solutions to Problem •

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Using Call Centers to optimize the CRM concept – The Hilton Hotels wanted to optimize the new CRM portion of the OnQ system, so they utilized the call centers to gather more information about their customers during the reservation process. “OnQ Reservation allows the agents to access callers’ personal dossiers and update their preferences. This information shortens the time on the phone and it enables better crossselling.” Best Guest Arrival Report – This was a useful tool, because it allowed the property to prepare for receiving guests. This report was useful to the property because it listed and ranked all expected guests that had a profile in OnQ and formatted relevant information from their dossier in an easily s canned format.   This allowed the property to pre-assign guests to a room that was prepared according to their preferences. This helped the firm to become more efficient in the services they provided to their valued guests.  The Satisfaction and Loyalty Tracking (SALT) – SALT was a survey 3/18/12 that a sample of departing g e asked to complete. This

Recommendations •

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I would recommend that Hilton expands their OnQ and CRM technology to include all of the properties that they own. Meaning, whether a customer stays at an Hilton Hotel, a Homewood Suites, or a Waldorf-Astoria, their preferences would still be available at the various properties. With the growing need for technology for most consumers even when they are away from their homes and offices. Therefore, it would be beneficial to Hilton Hotels to be the first hospitality firm to offer FREE unlimited internet service to all hotel guests. It can be up to the firm to decide whether the free internet should be wireless or via Ethernet. By adding this feature to all of their hotels, Hilton Hotels will attract 3/18/12