InterContinental Hotels Cultivates Customer Web Community to Improve BusinessBy Elizabeth Bennett | Posted 2008-01-04 Print
The world's largest hotel company, InterContinental, is using a private online community to tap into the needs and desires of its most lucrative customers.
Certain travelers want to know where the Internet hookup is the instant they enter a hotel room. Women who travel frequently like to exercise, but they don't want to work out in a glass-enclosed gym. Market researchers at the InterContinental Hotels Group (IHG) used to periodically uncover such insights behind a one-way mirror at a focus-group facility stocked with bottled water and M&Ms.
These days, however, they learn about the travel habits and preferences of customers in an online collaborative space—all the time.
Based in Windsor, England, IHG is the world's largest hotel company, operating more than 3,800 properties in roughly 100 countries. Since April 2007, it has been experimenting with a highly interactive Website for it's most loyal and high-spending U.S. customers. The rapid feedback from participants has sharply reduced IHG's time-to-market with new products and reduced market research and utilization costs by up to 90 percent.
While the high-end InterContinental Hotels chain is IHG's oldest and most widely known, it also counts the Holiday Inn, Candlewood Suites and Crowne Plaza in its portfolio. That's a lot of bedding down of a lot of people and the $1.8 billion business says it manages the world's largest hotel loyalty program, with more than 37 million members.
Staying abreast of travel and hotel trends and keeping customers happy is an ongoing pursuit for Ken Bott, director of IHG's global consumer marketing group. Bott is highly animated when he talks about the online customer community he and his staff have helped cultivate in the last nine months. The Priority Club Rewards Private Online Community consists of 300 of IHG's most loyal U.S. customers who travel for business at least 15 times a year and tend to fetch up across IHG's hotel chains, as the occasion dictates.
Customer Care Giving
Bott says that staying in close touch with customers, especially the three and a half million most loyal ones, is his priority. The focus group, the traditional method for soliciting feedback from customers for promotional campaigns or hotel-design changes, is a slow and costly method that only generates qualitative results. "It used to be that customers would arrive at the focus-group facility at 7 p.m., you'd show them the creative and then you'd show them the door," says Bott. Consolidating and analyzing the respondents' comments and incorporating them into a marketing campaign or new product could take months, Bott told Baseline. And focus groups are pricey. They generally require the presence of five marketers during the customer interviews plus the cost of the moderator, supplies, respondent incentives and the facility rental. A single study could take three weeks to prepare and cost $10,000, says Bott.
So when IHG began experimenting with online community software, Bott leapt at the chance to set up a focus-group alternative. His group chose a Web-based tool from Communispace, a Watertown, Mass. software company that builds private online communities for the customers of companies like Charles Schwab, Hallmark and Unilever. Communispace was easy to use, Bott says, and had a track record with Fortune 50 companies. It took about three months to customize the software to meet IHG's specifications.
It was important for IHG's marketers to receive feedback from customers in as many formats as possible. To that end, customers can provide opinions, suggestions and ask questions in five different ways, including via surveys, chat rooms and topic-specific discussion areas. Surveys focus on the needs and experiences of customers and can accommodate multiple choice responses or open-ended answers. For example, one survey asked members about their behavior when entering a hotel room for the first time. Some wrote that they take off their shoes and get comfortable, while others said they scanned the room from the doorway in search of an Internet connection and outlet for their laptop.
Though such comments are qualitative, Bott says enough respondents expressed a desire for easy-to-find Internet access that the company has selected a couple of pilot hotels in the Atlanta area to experiment with a revised room design; it will have a new orientation for electric outlets and a clear view of the desk chair from the doorway—designs approved by the online community.
There is also a "brainstorming" area of the site where customers can respond to questions from the marketing staff in open text fields. One day, the following question was posed: What do you do with your loyalty club card? More than 50 percent of respondents said it was a hassle to carry around so many cards and that they often left them at home, consequently missing out on earned car rental or hotel points.
Within a few days of the brainstorming session, Bott's team had developed a solution to ease the frustrations of its customers: a rewards card with space on the back for numbers of other hotel, airline and rental-car loyalty programs. Designers built prototypes of the new card and posted them in the private online community to gauge the opinions of customers. Participants favored one design that was eventually produced and mailed out. And in a single day, the marketing language for the card went from "Customizable card back" to "Customize your card," thanks to the input of community members. The whole process—from initial query on the site to card distribution—took four weeks.
Today, IHG's most regular customers can go online to the Priority Club Rewards site and enter up to ten rewards numbers to be printed on the back of their card. The speed with which IHG now make changes to existing products and develops new ones has shrunk considerably. In the past, Bott says the customized card could have taken several months to conceptualize and implement.
Then there is the savings. Where focus groups cost tens of thousands of dollars and only reach a dozen or so customers at a time in a single city, it now costs IHG just hundreds of dollars to send out an email to customers across the country inviting them to take a survey.
Bott says the site isn't all about what customers can do for IHG, but mostly about what customers can do for each other. Community members initiate two-thirds of conversations on the site, he says, mostly related to travel tips, recommendations and questions like where they might find the best pet-friendly hotels. People do occasionally complain about poor service and if there are consistent negative reviews Bott's staff might escalate the complaint, but not all problems are fixable. "If the customer is complaining because the clerk on the night shift looks like he's 15, there's not much we can do," says Bott. "We're open all the time and nighttime staffing is always a challenge."
So much information gets posted on the site that each week one of the marketing staffers consolidates the feedback and emails the information to the whole department along with a synopsis for the chief marketing officer. In 2008, the marketing team will implement a collaborative wiki on the company intranet, which will allow the staff to post observations and analysis about the customer findings, says Bott.
One particularly interesting finding recently emerged from a discussion about women's travel needs. Women who work out at hotel gyms said they prefer opaque walls to those made of glass. "Even when they know the gym is perfectly secure," Bott says, "women don't want to feel like they're on display."
When asked if IHG would consider making the necessary changes to address the glass-box concern, Bott said that such a costly alteration would require more research. "Customers may say they want the newest treadmill, or iPod and music selection, but it may not be financially viable."
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