Hilton

QUESTION 1

The loyalty program can help the property operator and brand owner manage customers better, and this is shown below:

* The loyalty programs are generating insights into customer behavior and segment differences, providing the ability to respond more precisely to the needs of customers in different segments.

* By loyalty programs there can be a better understanding of the characteristics of the products to which they apply.

* By loyalty programs, inefficiencies for the customer can be avoided.

* Any new information that will be collected may challenge strategic assumptions in important ways.

* The loyalty program helps the property operator manage customers better and some of its benefits are:

- building and leveraging powerful and insightful databases of customer information

- customized products and services

- it may also facilitate cross selling by attracting loyal customers to additional products and services and make it easier to capture similar customers in the future.

* The loyalty program gains competitive advantage when it:

- delivers superior customer value by personalizing the interaction between the customer and the company

- it demonstrates the company's trustworthiness and reliability to the customer

- it tightens connections with the customer

- it achieves the coordination of complex organizational capabilities around the customer.

QUESTION 2

STRENGTHS

* Membership in the Hilton Honors program was opened to anyone who applied at no charge. Members earned points toward their Hilton Honors account whenever they stayed at HHC or HIC hotels.

* HHonors Program offers a practice known as Double Dipping (Hilton guests could earn mileage in partner airline frequent flyer programs for the same stay that earned them HHonors points).

* Exotic rewards were offered (two person, seven night diving adventure in the Red sea for 350.000 points including hotel and air fare).

* Members had other benefits besides free stays. They had a priority reservation telephone number. Check in went faster because information on preferences was on file.

* Members earned points by renting a car flying with a partner airline using Hilton Credit Card.

* The program let the most valuable guests be recognized on property. If a problem comes up, the guest can contact the customer service team.

* Hilton keeps track of preferences enabling the hotel to provide customized services. For example, a guest may want a room that is for non smokers and has a double bed.

* Hilton Honors Worldwide used direct mail to cultivate the relationship between members and the Hilton brand.

* A significant proportion of Hilton's business came from contracts with large corporate clients. Hilton offered discounted rates if the corporation delivered enough stays.

WEAKNESSES

* The Diamond VIP status is not well organized. This level was not mentioned in promotional material and no benefits were promised. Although in the previous three levels there were specific offerings, there are no in the Diamond VIP. According to Hilton, they do not make promises that they can not keep.

* Customer characteristics were needed by the model to estimate "walking cost", the cost of turning a customer