Loyalty Wars - Free Essay Exampl

Hilton is threatened by the approaches that Starwood Hotel and Resorts is making. Initially, Hilton HHonors Worldwide had a loyalty package for its customers that was working just fine. However, with the new Stardom loyalty program, Jeff Diskin, Hilton HHonors head, sees no chance of competing with the former (Deighton & Shoemaker, 2005). Hence, Diskin needs to come up with a creative approach to effectively consolidate the loyalty of its clients to compete with its principal rival.

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The first approach that Diskin can undertake is coming up with an utterly new loyalty program that is distinct from the existing one. This new program will focus on building a convincing brand for the company rather than competing directly with other hotels. The new program will aim to create dedication and enthusiasm for the Hilton brand with the end goal of creating faithful clients to the organization. Besides, the new strategy can be used to provide an accurate estimation of the strolling costs of clients so that the company can formulate a more effective competitive strategy. Studying the clients' movement will not only help design a new compensation plan to improve loyalty but also enable the company to offer better personalized services to clients.

Escalating Costs

The critical issue with the loyalty issue that Hilton faces concerning Starwood Hotels and Resorts' new loyalty package is escalating costs. The latter has plenty of resources that enable it to provide more affordable services to clients than those that are rivals, such as Hilton (Deighton & Shoemaker, 2005). While Hilton may not have the ability to engage in a loyalty war with Starwood, the company can study the entire package that Starwood offers and come up with a mitigating price strategy that would reduce the prices of its products significantly. Moreover, the company can come up with unique services that would entice its clients, as the price is not the only factor that governs a customer’s loyalty.

Reference

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Deighton, J. A., & Shoemaker, S. (2005). Hilton HHonors Worldwide: Loyalty Wars. Harvard Business School.