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Hilton CRMs

Hilton CRMs
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Week 4: Hilton CRM – Going Social Instructions
View the following media:
• Hilton El Conquistador Resort CRM video
• Social CRM: Business Technology Whiteboard
Read the following:
• Case: Hilton Hotels Corporation: Data-Driven Hospitality
• Gartner: The 9 Types of Social CRM Apps
Explore the world of social CRM and the impact to business strategy and
customer relationship.
A word document word may be used for this assignment.
Hilton has successfully been using their CRM for some time and it has gone social
offering many ways for customers to connect. You are the CIO of DuckSuites in a newly
acquired Hilton brand. Your organization would like to engage the customer using the
new social applications. Pick a type of service (such as social analytics or social media
engagement) and discuss how using the service will change your internal operations.
Do not focus on the customer but how the internal organization will use the data from
the service and the potential impact to operations.
Create a word document to capture your thoughts and ideas.
Chapter 7 / Electronic Business Systems ? 215
ilton Hotels Corporation has learned that customers
are more satisfied when they have a problem and the
hotel staff takes care of it than if the stay goes flawlessly.
Giving hotel staff the information to make critical recoveries
is the reason Hilton, during one of the industry’s
worst downturns in decades, piled $50 million into a custombuilt
customer relationship management (CRM) information
system that has been integrated to cover 22 million guests in
every property across the eight brands that Hilton owns. “The
hospitality industry is a people business,” says CIO Tim
Harvey. “It doesn’t do any good to have great customer information
that’s only in the reservations system and available to
the call center. We need to have it common across all systems.”
Hilton is putting its CRM system, called OnQ, to the
test in a high-stakes expansion program. As the industry regains
momentum, Hilton is opening an estimated 275 hotels
by the end of 2005. OnQ is the IT centerpiece of a 2-yearold
Hilton CRM strategy, officially known as “Customers
really matter.” The strategy is pinned on the idea that
employees with a clearer idea of who customers are and what
their past Hilton experiences have been can engineer constant
There are plenty of risks in the strategy. For one, Hilton
needs to present its deep customer histories clearly enough
that employees at the front desks, where turnover averages
more than 100 percent a year, can put it to use. And Hilton is
trying to use the integrated information system to build loyalty
with customers across an incredibly diverse mix of eight
hotel brands—so the same customer is recognized checking
into a $79 room at Hampton Inn in Davenport, Iowa, or a
$540 suite at the Hilton Hawaiian Village in Honolulu.
The risk Harvey and his team know they need to guard
against is hitting a hotel staff with so much information, or
doing it in such a disruptive way, that it prevents employees
from interacting with guests and making judgments.
A lot of love and sweat went into building OnQ, a system
that’s about 70 percent custom-coded. The custom components
include a property-management system, the CRM
application, and a hotel owner-reporting module.
The system is delivered as an IT service to the franchise
dominated chain. Hilton owns just 52 of its 2,216 hotels, and
franchisees license the software, paying Hilton annual fees
that work out to about three-fourths of 1 percent of a hotel’s
Hilton’s IT leadership is stacked with hotel industry veterans
who have no trouble defining IT success in terms of
how quickly guests get to their rooms and whether the
rooms are what they asked for. Harvey looks at it this way: If
guests are disappointed, eventually Hilton’s shareholders
will be, too. “We are passionate that our brand is only as
good as our customers think we are,” he says.
OnQ’s $50 million price tag makes it by far Hilton’s
largest technology investment of the past several years.
For OnQ to fulfill its mission, it needs to do more than
deliver information; it needs to be a decision-support tool.
For example, if a guest has complained in the past about being
bumped from an overbooked hotel and moved to another
Hilton property, the system will highlight that history
should the same situation come up, thus making it less likely
a hotel will ask that customer to “walk” again.
One way OnQ already is yielding measurable benefits is
in its ability to match customer reservations with profile
database records. Before the system’s deployment, just 2 of
every 10 guest reservations could be matched to an existing
profile. With OnQ, it’s matching 4.7, and Hilton says that
number can be closer to 6.
Such success brings a smile to the face of Chuck
Scoggins, senior director of Hilton.com and a key figure in
the OnQ development project. Each customer profile includes
a variety of information, from credit card data and
stay histories to frequent-flier miles and room preferences,
all of which can be used to match people to their profiles.
The company considers its matching technology, which lets
the front desk search through 180 million records and get
answers almost instantly, to be critical intellectual property.
“These are our algorithms, and we believe they’re the best in
the industry,” Scoggins says. That’s why Hilton continues to
custom-build most of its software instead of buying off the
shelf. “I’m reluctant to replace something we’ve worked so
hard on until we can be sure it will be a significant improvement,”
Scoggins says.
While OnQ helps Hilton run its existing operations, the
system’s real return will be measured by whether it lets the
company reinvent what it does and what it offers customers.
Harvey hasn’t lost sight of the more distant future.
Hilton’s 540-person IT staff spends about $132 million a
year—about 2 percent of revenue—on IT. About $1 million
of that goes to true research and development investigating
emerging technologies. “Too often, we forget to think about
innovation in the rush to meet business objectives,” Harvey
says. “We get so intent on trying to deliver, but that thinking
outside of the box is crucial to our future success.”
Case Study Questions
1. What are the benefits and drawbacks of the OnQ
system at Hilton?
2. What does Hilton have to do to create a competitive
advantage through OnQ? Provide some specific
3. Is it possible to have too much information about a
customer? Explain.
Source: Adapted from Tony Kontzer, “Data Driven Hospitality,”
InformationWeek, August 2, 2004. Copyright © 2004 CMP Media
Hilton Hotels Corporation:
Data-Driven Hospitality

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