Hilton Hotels: Brand Differentiation Though Customer Relationship Management

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To:$Tom$Keltner,$CEO/Americas$ From:$0619$7389$ Date:$February$16th,$2008$ Re:$Future$CRM$direction$and$Strategy$ $ It$is$proposed$that$Hilton$Hotels$Corporation$reinvest$approximately$$2$million$dollars$in$the$OnQ$CRM$ initiative$with$the$focus$on$a$more$targeted$approach$to$better$serve$the$diverse$Hilton$portfolio.$This$ tactic$addresses$the$objective$of$significant$growth$given$the$key$issue$of$achieving$service$ standardization,$a$typical$challenge$of$service$delivery$operations.$$With$Blackstone’s$capital$backing$ (see$Exhibit$A),$the$perfect$opportunity$is$presented$for$Hilton$to$reinvest,$revamp$and$expand$the$OnQ$ CRM$program$to$ensure$excellent$service$in$their$existing$and$upcoming$hotels.$ $ In$evaluating$CRM’s$performance$to$date,$several$measures$were$examined.$Total$calls$have$increased$ by$15.31%$since$the$CRM$strategy$launch$(see$Exhibit$B),$net$revenue$per$call$have$been$steadily$ increasing$(see$Exhibit$C),$and$there$has$been$a$1.12$billion$dollars$increase$of$revenue$through$the$call$ center$(see$Exhibit$D).$$This$can$be$explained$due$to$the$decreased$talk$time$on$the$phone$that$was$ achieved$as$OnQ$allows$agents$to$quickly$have$all$the$needed$information.$Even$if$this$result$was$only$ 0.54%$(see$Exhibit$D)$due$to$the$CRM$initiative$(or$1%$given$new$suggested$spending),$Hilton$would$ breakeven$on$it’s$minimal$annual$maintenance$expense$for$CRM$(see$Exhibit$D).$CRM$has$also$provided$ Hilton$Hotels$with$a$competitive$advantage.$RevPAR$Index$was$used$as$a$brand$competitiveness$ measure$as$it’s$not$affected$by$growth$from$simply$adding$more$properties.$In$2006$Hilton$Hotels$had$a$ RevPAR$Index$of$109.5$(ex.$9.5%$better$than$competitors)$versus$a$6.2%$surplus$in$2001$(see$Exhibit$E)$ before$the$CRM$initiative$was$launched.$It$is$clear$that$this$initiative$is$working$and$needs$to$be$ reinvested$in.$ $…...

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