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CRM Present

Starwood Loyalty Program
by Irene Tse on 21 March 2013

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Transcript of CRM Present

Question 1: How can a large company such as Starwood exploit customer data while still safeguarding and respecting customer privacy? Agenda 1. Introduction

2. Question 1

3. Question 2

4. Question 3

5. Conclusion

6. Q&A Question 2. What should Starwood do to attract loyalty program nonusers into the program or find out more about the behavior and preferences of this large group? Starwood Preferred Guest Starwood Loyalty Program Introduction Types of information collected: 1. Personally identifiable information

2. Non-personally identifiable information Personally identifiable information collected: 1. Demographic

2. Psychographic

3. information to fulfill special requests Non-personally identifiable information collected: 1. Use of the website

2. Communication preferences

3. Travel habits

4. aggregated data relative to your stays responses to promotional and surveys Purpose of collecting data: 1. providing services such as processing a transaction

2. marketing and communications to the products and services

3. performing market research Processing and disclosure of information: Situations in which Starwood may disclose your information to others include:

1. received customers' consent
2. disclosing info to offer products or services
3. when companies on behalf of Starwood require such information
4. when a hotel leaves the Starwood system and access to your PII is necessary
5. in the event Starwood is merged or acquired by another company
6. to comply with legal requirements
7. in case of emergency Once the information is shared, Starwood: 1. seek to limit the scope of information that is furnished

2. require third parties to protect your PII Customers may refuse by: 1. clicking on the link included in such communications

2. contacting us directly to opt out of direct marketing, telemarketing, emails or surveys Question 3.
(i) How far should Starwood push its direct offerings to its program members?
(ii) How can it discover the boundary? Conclusion Q&A Starwood Hotels - Under Starwood Hotels and Resorts Worldwide, Inc.
one of the leading hotel and leisure companies in the world with 1,134 properties.

-Operate nearly100 countries and 171,000 employees at its owned and managed properties SPG – Starwood Preferred Guest -connection to nine exciting hotel brands more than 1,100
hotels and resorts in nearly 100 countries.


-stays will earn valuable Starpoints® redeemable for Free Nights and Award flights, both without blackout dates, plus other redemption options. The nine hotel brands ST Regis, The luxury Collection, W Hotels, Meridien, Westin, Sheraton, Loft, Element, Four Points
Different class, cultural and design Loft Element Signing up cost you one minute Step 1 Step 2 Step 3 Done! Email approve SPG Apps Reasons for those nonusers not joining the loyalty program Ways suggested to Starwood to increase the no. of people joining the loyalty program “… Earn two Starpoints for every eligible U.S. dollar. … “ For spending every US$1.00 can earn 2 starpoints.
Lots of starpoints are required to redeem present. Hard to obtain points 1. Select hotel by using the search engine/ agency E.g. hotel.com / agoda.com …

2. Only go to a country once for traveling purpose. Non-frequent visitors People feel worry about their personal information are being stolen.
Not willing to provide any information.
Personal protection. No. of people concerning about the privacy of personal information --- increasing. Information disclosure Information disclosure Non-frequent visitors Hard to obtain points 1. B2B Partnership

2. More specify and accurate promotion 1. B2B Partnership 1. Business especially MNCs may need to regularly send a inspector to their overseas branches for understand.

2. Meet clients overseas. (E.g. HSBC, IBM…)

3. Need to fly frequently in a year.

4. Potential users to join the loyalty program. 2. More specify and accurate promotion To sum up, the objective of Starwood’s direct offering is to focus on quality not quantity. It should mainly offer its members with exact information he or she needs. Similarly:

On average a member spends in Starwood every two weeks → send this member promotion emails every two weeks.

If a member on average only visit Starwood once or twice a year → should not sent emails to this member too frequently. High response rate to information about points redemption → send more information about points redemption program to this member.


Low response rate to promotion about new features → do not send this type of information to avoid annoying this customer. Example Starwood should make use of its customer database and information system to determine how often to send the particular member a promotional email, and which type of offerings to send. 2. Use customer database to determine (i)
How far should Starwood push its direct offerings to its program members? Clear
Nice tone and structure
Attractive
Straightforward
No confusion
Reader-friendly Starwood should also pay attention to the quality of its content send to its members 3. Focus on the quality of content Promotions and offerings are often delivered through email. When customers register the “Starwood Preferred Guest” loyalty program, there is a check box about the email preference. 1. Give members the option to choose and quit. Survey
 - select program users and non-users
 - must get consent of the customers

Casual Interviewing

Observation

Respond rate Potential boundaries Potential boundaries Potential boundaries How can it discover its boundary? (ii)
How can it discover the boundary? Although Starwood wants to customize its cross-selling and up-selling… Customers maybe annoyed. objectives of cross-selling:

--> increase the income derived from the client or clients / protect the relationship with the client or clients

Up-selling:
--> induces the customers to purchase more expensive items When Starwood go far into the direct offerings using cross-selling, up-selling

- Relationship easily get disrupted
- Customers easily feel bad
- Annoyed by the promotion, -> turn into bad feeling towards Starwood Understand their backgrounds and needs well! Starwood choose to customize the promotional email
- costly

Our suggestions: More mass promotion
- customers easily get annoyed
- mainly to public users/ not existing customers

-> strive a balance between the two Marketing research
-> deliver marketing research to find out how customers feel

-> find out potential problems of the delivery method of the loyalty and program Are the customers bored?
- Plan for a trip already spend time and effort

- May not have time to concern about those minor rewards (Business trip)

- Prefer convenient and relax rather than a little rewards or discount A new SPG membership benefit may launched which turn the starpoints to be credit refund (20starpoints = USD0.1 credit) SPENDING USD1400
GIVE YOU BACK USD25!!!
TO ENJOY STARBUCKS $1=2starpoints
12000starpoints = one nights of a 5stars hotel 1. Clearly and definitely to list out what they pay what they get Transfer to be STARBUCKS-CARD
Gain Starpoints
Hotel Spending choose - automatic rewards system
- choose a fixed benefit
- transfer starpoints into the benefit automatically deliver to the member Too much --> confuse
- The rewards from starpoints are too wealthy
- Information are too much and complex
- Customer feel no idea or even concept of what the starpoints can really exchange for More specific and accurate promotion Travelers want simple and causal

- Clearly and definitely to list out what they pay what they get


- Launch a credit refund benefit

- Immediate discount for new member application

- Automatic rewards membership plan Travelers want simple and causal Suggested Ways 2. Launch a credit refund benefit 3. Immediate discount for new member application e.g. new member may enjoy 95%off for the first spending within one month
Can enhance immediate interest to those nonusers 4. Automatic rewards membership plan Starwood has done a good job on customer orientated Overall -> Marketing Research

-> Survey

-> Database Question 3 - How can it discover the boundary? Reason of not joining the program:
(1) Messy information

(2) Hard to achieve requirement

(3) Information disclosure Question 2 - What should Starwood do to attract loyalty program nonusers into the program or find out more about the behavior and preferences of this large group? 1) Provide freedom

2) Better use of database

3) Quality but not quantity Question 3 - How far should Starwood push its direct offerings to its program members? (1) Only collect relevant data

(2) Protective mechanism

(3) Customer has RIGHT Question 1 – How can a large company such as Starwood exploit customer data while still safeguarding and respecting customer privacy? Question 2 - What should Starwood do to attract loyalty program nonusers into the program or find out more about the behavior and preferences of this large group? Solutions:
1) B2B

2) Specific Promotion /Credit refund/ Immediate discount/ Automatic reward Problem 4 Starwood targets existing member with customized offering and communications, but yet they have to figure out how much and how far the customer will accept these things Problem 3 7 million of customers are member of SPG, but 6 million are not. Starwood has little knowledge on the remaining half customer base Problem 2 Customer like the way that Starwood learn their preference but yet they would like to have control over the kind of information the company use – which is known as the privacy problem The problem of Starwood Hotel Problem 1 Starwood has collected customer behavior such as movie watching, minibus use and room service, they are not cleared how it can use the information
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