Program Marketing Case Study
A global hotel group has partnered with Hospitality Marketing Concepts (HMC) since 2004. The paid-membership loyalty program discussed in this case study runs across Asia-Pacific and China. Members enjoy substantial dining and rooms benefits. In addition to providing telemarketing and online channels to acquire new customers, HMC also provides the client with extensive CRM and multi-channel marketing services to retain customers and therefore stimulate incremental revenue to the hotels.
HMC’s Membership programs create a local database of frequent loyal users who generate substantial increases in all revenue areas of the hotel. Because the valid-email ratio of this specific membership database has exceeded 90%, email campaigns have been determined to be the most cost-effective tool for promotions and to encourage member engagement and drive hotel usage. The primary objective of these campaigns are to stimulate customer loyalty and engagement through regular communication with the members, and ultimately to boost both F&B and rooms revenue for the hotels.
The paid-membership loyalty program discussed in this case study is comprised of 42 hotels in Asia Pacific. There are a total of approximate 42,000 members. Gender is split 76% male and 24% female. Members have high disposable incomes, are Small to mid size business managers/owners & professionals (SMEs), Frequent diners/entertainers, and generally interested in value and recognition as opposed to discounts. 40% of member-base is categorized as “High Socioeconomic Status,” compared to 20% of the general population in the countries comprising the membership database.
Research, Planning and Implementation
Our approach is to compile multiple, unique hotel promotions together and distribute to members within a single, consolidated monthly e-newsletter. This process streamlined operational overhead and consumer effectiveness, as members avoid getting confused and overwhelmed by many EDMs from different hotels. In addition, due the efficiencies created by this process and predictability of a regular monthly schedule, an increasing number of the client’s hotels have participated in contributing promotions: From just 7 hotels at the beginning of 2008, the number of participating hotels increased to 39 hotels in June 2009. In addition, we implemented a best-practice sharing process, so when a hotel’s promotion was particularity successful, a case-study illustrating the success was shared among the other hotels. The result: Overall effectiveness of the EDM’s grew substantially over time (a survey in July 2009 reported over 95% of members believe ‘strongly’ or ‘sometimes‘ that the EDM’s add positive value to their membership).
All the offers are categorized in accommodations and dining and then listed by hotels in alphabetic order for easy reference. Since, as we discovered via member survey research, most members are more interested in accommodation offers, we prioritized the visual display of these promotions have therefore placed the room offers on the landing page and grouped all the dining offers under a secondary tab. A special rate code has been set up by the hotels and unique offer quotes are provided to the members, in order for the results to be measured. The members can either book via toll-free number or from the website directly by clicking on the respective links. As mentioned in a previous section, the actual promotions are generated by each hotel, and therefore they are highly targeted and unique by nature, thus, creating an overall message that resonates very effectively with Priority Privilege’s network of local SME members.
These e-newsletters generated a total of revenue at AUD $45,193 with 210 room nights in 2007, and soared in 2008 to AUD $273,899 in total revenue with 1543 room nights. This has shown a steady growing trend in year 2009. Through the first quarter of 2009, a total of AUD $247,473 revenue has already been generated with 1360 room nights. At this pace, we are projecting revenues well over AUD $1,000,000 and 5,000 room nights.