MANAGEMENT INFORMATION
SYSTEMS (CMA613)
Case Study: Hilton Hotels: Brand Differentiation
through Customer Relationship Management
Daniel Chaytor
Overview
History
 Case Brief
 OnQ
 Discussion

History
• 1919: began operations with the Mobley Hotel in
Cisco, Texas, led by Conrad Hilton
• 1946: went public under the name Hilton Hotels
Corporation with a portfolio of 15 properties in 11
states
• 1964: spun off the international unit to focus on
domestic growth and diversification into casinos and
vacation ownership.
• 2000: acquired Promus Hotel Corporation, taking
Hilton close to the 1,700 properties mark
History
•
•
•
2005: bought back Hilton International, bringing about 400
Hilton properties into the fold
2006: opened its 1,000th hotel in North America since the
acquisition of Promus
2007: almost 3,000 properties, a presence in 78
countries, a global workforce of over 100,000
Case Brief


Aggressive goal of opening 1,000 hotels in North
America in 5 years, and 1,000 in the rest of the world
in 10 years.
Not easily achievable as lodging business highly
competitive
High capital
 High employee turnover
 Difficulty achieving standardization with service delivery
options

Other People’s Money

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Bala Subramanian, SVP of Global Distribution Services:
“No one entity has this type of capital to invest. The way
in which Hilton becomes more profitable is through other
people’s money.”
Tom Keltner, EVP and CEO of The Americas: “One key
measure of our success is willingness of owners to invest
with us. It’s share- of-wallet through brands, and share-ofshelf-space through owners.”
Only feasible way to fast growth - franchising,
alignment with real estate owners and standardizing
service delivery options.
Hilton OnQ


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The nervous system of the Hilton Hotels Corporation, a
comprehensive, integrated infrastructure.
Embodies both the one- stop shopping nature of an
integrated solution and a readiness to serve customers
“on cue.”
An ambitious custom-built enterprise system designed to
support the property-level operations of each hotel in
the Hilton family, regardless of size and segment, and
to enable the firm’s Customers Really Matter initiative
at each customer touch point
OnQ Platform and the Guest Cycle
Hilton OnQ (Video)
Hilton OnQ

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Ability to match customer reservations
with profile database records very
quickly to make the customer feel
special.
Built on the premise that technology is
an enabler for employees to deliver
great customer service
Tim Harvey, EVP of Shared Services and
CIO: “At Hilton we have a belief that
information technology is so intertwined
with our brands and their culture that you
need a consistent infrastructure to enable
the brand promise.”
Hilton OnQ


OnQ was a critical component of Hilton’s aggressive
expansion strategy, enabling the firm to open more hotels,
at a quicker pace, and with more consistency of delivery
than otherwise possible.
Outsourcing was not a viable option.


Harvey : “For you to know 100% of your customers so that you
can provide the most outstanding service, all technology
components need to work flawlessly together.”
Keltner : “Our IT infrastructure is a competitive advantage; it’d
take years for others to replicate it. Our branded sites look
different, but they operate the same way. We generated $750
million cross-selling4 last year, and I can sit in my office and see
how everyone did last night.”
Customer Really Matters (CRM)

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CRM (Customer Really Matters) initiative launched in
2002
“CRM is a way to use technology to give you the power
to solidify relationships with our best customers.”
The technology enabler was OnQ CRM, an application
built on the OnQ infrastructure that consolidated farflung customer data and produced comprehensive
arrival reports.
Customer Really Matters (CRM)


The aim was to give employees a clearer idea of who
customers are and what their past Hilton experiences
have been, in order to engineer constant improvement.
Keltner: “At every one of our customer touch points
there were barriers to good service because
information was not integrated and easily available. If
there is no holistic view, talk times [time taken per call]
are longer at the call centers, we can’t provide
continuity to guests that stay with multiple brands, we
can’t recognize them properly, if they had a bad
experience in their last stay we don’t know. With CRM
we set out to fix all that.”
Customer Really Matters (CRM)

Critical objective of the CRM initiative: fostering a closer
relationship with best guests throughout their lifecycle of
interaction.


Subramanian: “We want to ensure that our best guests don’t
sleep around with the competition.”
To achieve such tight relationships with guests, they
identified:

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recognition,
personalization
service recovery
customer analytics
Delivering the CRM promise

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Recognize guests at the reservations center to both speed
up reservation and increase service quality
Allows agents to access callers’ personal dossier and update
their preferences.
Every morning, as the property prepares to receive guests,
OnQ enables the front office staff to print the Best Guests
arrival report lists and ranks all expected guests with a
profile in OnQ and relevant information from their dossier.
Armed with this information, the front office pre-assigned
guests to rooms and ensured that the rooms were
appropriately prepared according to guest preferences.
Satisfaction and Loyalty Tracking (SALT)


Key component of the CRM initiative
Management carefully monitored the ratings a
property received on
 overall
experience,
 ability to recommend, and
 willingness to return.

The driving objective was improvements in the
percentage of surveyed guests who rated the
property nine or ten on a ten-point scale.
Data Flows
Competitive Advantage


Hilton was the first major multi- brand operator to roll
out a strong, integrated customer relationship
management effort that was tightly integrated with its
frequent guest program and was delivered chain-wide.
Subramanian: “The key to our competitive advantage
is that we have a lot of pieces that work well
together. Since we are the only company that has
the same technology platform and distribution
footprint throughout all the brands, we can leverage our
strengths consistently across the entire systems.”
Questions

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What are the advantages and drawbacks of the
OnQ system at Hilton?
What does Hilton have to do to maintain a
competitive advantage through OnQ?
What other recommendations would you make to
Hilton?