Marketing and Customer Retention

This report discusses the importance of customer retention in marketing and explores the case of Hilton hotels and their loyalty program. It also provides strategies for developing a successful loyalty program for a new hotel in London.

Marketing and Customer
Retention

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Marketing mix.............................................................................................................................3
Characteristics of Hhonors relationship marketing program......................................................5
Strategies for development..........................................................................................................6
CONCLUSION ...............................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Marketing is defined as the activities in which short term and long term needs of
customers and to create communication between customers and other partners so that values can
be rendered to them (Frye and et. al., 2020). On the other hand customer retention is defined as
the ability of the organisation in retaining customer for longer duration. Marketing activities are
primal for business as this leads in higher customer retention and customer satisfaction as well.
By associating various loyalty programs businesses in hospitality industry may enhance their
customer involvement and their retention as well. This report is explaining all the concepts of
marketing along with their impact on customer satisfaction on the background of Hilton hotels.
Hilton is a globally regulated hotel chain which is headquartered in US. The company is having
operation at more than 6200 locations which proves their worldwide presence. Hilton is running
various loyalty program under which they are trying to attract huge customers and achieve
prominent position at marketplace.
MAIN BODY
Marketing mix
Marketing mix is defined as the marketing strategies which are used by businesses to
understand prevailing market trends and to understand their used strategies so that these can be
adhered to market trends. For industry of hospitality marketing mix is used by the companies in
order to use prominent marketing strategies so as to attract pool of customers and retain them by
giving required services. In the context of Hilton as the hotel is maintaining 5 star hotel chain
around the globe due to which they are proving global identity and managing their customers in
sufficient manner. For Hilton hotels their marketing mix is elaborated as under:
Product: Hilton hotels is dealing in providing staying and luxurious services to their clients.
Hhonors is a loyalty program which is being introduced by Hilton in order to get specific edge
over competitive market (Liat and et. al., 2017). The organisation is dealing in four major
dimensions of products such as core products, facilitating products, supporting products and
augmented products. Under core products hotel rooms are given to customers, within facilitating
products bars and online reservation facilities are given. Similarly under supporting products
various additional services are given such as 24/7 room facilities and many more. At last within
augmented products luxurious facilities are given by Hilton. These all bifurcation is helping the

company to divide their customers on the basis of needs and demands. In order to retain
customers for longer duration Hilton is conversely using their loyalty program by which
according to desire of customer services can be moulded.
Price: Hilton is known for service provider of midscale to luxurious class so within this varied
pricing strategies are adopted by the hotel in order to grab variety of customers. For luxurious
services Hilton is offering premium prices so that provide wellness to their guests. On the other
hand for for middle class and price sensitive customers they are opting price skimming strategy
so that to retain them (Singh and Badugu, 2017). Hilton is prominently known for luxury and
wellness so they are much focused on reaching out that segment of people and retaining them for
longer duration.
Place: Hilton is headquartered in Virginia, US and they are having varied branches at all the
locations in global periphery. Hilton is associated with their regional offices in UK, UAE, India,
Japan and many more. As of now Hilton is managing 5685 hotels and resorts at worldwide level
and these are associated with more than 912000 rooms as well. The organisation is having their
operations in 113 countries and they are effectively known as market leader in tourist industry.
For attaining their major aim of customer retention they are continuously trying to expand their
business in varied locations (Sigala, 2018).
Promotion: Hilton is enjoying strong brand identity as they have completed 100 years of their
glory so the company is highly focused on mouth to mouth publicity and promotion. Hilton
honors program is related with 85 million members and they are growing at a minimum pace of
10% every year. Hilton honors is used by the company as their promotional tool as their loyal
customers are helping them for performing mouth publicity. On the other hand Hilon is using
social media marketing for enhancing value of their brand and retaining their existing customers
for longer duration.
People: Hilton has employed 170k employees in their organisation and they are maintaining
flexible work culture. On the other hand company is highly dedicated on providing various
benefits to their employees such as educational assistance, retirement saving, paid paternal leaves
and many more (Suh and Alhaery, 2016). These benefits are boosting morale of their employees
due to which they are working in effective manner and trying to provide ultimate satisfaction to
their guests. Dedication of employees of Hilton is giving them separate edge over market
position and marketing strategies.

Process: Hilton provides online booking facilities to their customer so that to render
convenience. On the other hand Hilton have launched their own app which enables their
customers to book services in prompt and economical way (Bavik, 2016). This eliminates the
requirement of front desk as with the help of app check in and check out functions can be
executed. Processes used by Hilton during booking and rendering services are quite easy and
accessible in direct manner which helps them in attaining higher customer attention and
retaining.
Physical evidence: The major parts of the hotel is intangible other than guest stay which is
provided during their stay. The services of Hilton are distinctively identified in which the
company is managing cleanliness of their rooms so that their customer gets services according to
their demands and needs. Hilton is highly active on maintaining interior and exposure of their
services so this part is giving them additional benefits over customer retention (Bacik and et. al.,
2019).
Characteristics of Hhonors relationship marketing program
Event driving customer messaging: This program is used by Hilton in order to manage
customer related activities in sufficient manner. Under this program different awards are given to
customer by accumulating points of their stay. Under this program more than 2000 Hilton hotels
are registered and the are managing a very robust portfolio of customers. This program is based
on staying offers in which for example is a customer is continuously using services of Hilton in
New York areas then promotional offer for that customer will be for that particular area only.
This is helping the company in enhancing customer retention and customer recall value as well.
Easy reward redemption option: For Hhonors customers Hilton has prepared different
website at which within a minute loyalty points can be redeemed. This program gives additional
comfort and ease to its members as loyal customers are getting these benefits (Al-Azzam, 2016).
Similarly on this website real time information can be grabbed which enhances online
convenience of customers. These generated information is proportionately helpful for customers
in making their buying decisions and for company to measure their marketing results.
No processing fees along with no blackout dates: Hhonors loyalty program is not
taking any kind of processing fees as this is dependent on customer stay only. This feature of the
program enhances functionality and value of their customer due to which Hilton may reach to
their objective of retaining their customers. On the other hand in order to redeem points

accumulated by customer there is no boundations so this provides additional edge to their
customer for being valued. These characteristics of Hhonors program provides high brand
loyalty and psychological values due to which customer receives soft benefits.
Enhancement in customer relationship management: Hhonors program is helping the
company in maintaining customer relationship as these programs are designed for loyal
customers and this enhances customer engagement in prompt manner. This program is analysing
various strengths and weaknesses by which Hilton is able to modify their offerings and varied
strategies (Gehrels and Suleri, 2016).
Based on Pareto principle: The loyalty program of Hilton is designed on the basis of
Pareto principle as this principle states that 20% of customers are generating 80% of revenues.
With the help of this principle the customers are primarily focused by them and high share of
loyal customer can be enjoyed which leads in their retention for longer duration. Pareto principle
is emphasised on part of overall population and similarly this program by Hilton is designed in
such a way that this is focused on providing benefits to a particular class of people in order to
attain success.
The major reason for succession of Hhonors loyalty program is that this is very particular
in understanding needs and demands of their customer and meeting their requirement as well.
This program is taking care of their customer through which customer retention is enhanced by
the company. On the other hand Hhonors loyalty program is adding major customer portfolio to
the organisation which enables them to face and inhale market competition in appropriate
manner (Ryu and Lee, 2017).
Strategies for development
In London a new hotel is going to be opened named “VriSoya”. The hotel is of three star
and located at city centre of London. The major objective of this hotel is to meet level of
expectation of their customers and to provide ultimate luxury and quality services to them. On
the other hand a prominent loyalty program is being developed by the management team of the
hotel as they are willing to attain higher retention of their customers and long term sustainability
of their business. For this there are various strategies that are being adopted by the management
which are elaborated as under:
Adding points as per visits: As per this loyalty program customers are going to get
points as per their stay. These points are accumulated for every stay of customers and due to

which loyal customer are treated in special manner. Similarly these points are treated as rewards
by the customer under which value can be added to minds of customers as well.
No restriction of redemption of points: There is no restriction of redemption of earned
loyalty points. The basic requirement is that for redemption 200 points is mandatory and 200
points can be earned after 3 stays. This is associated with giving additional benefits to loyal
customers of the hotel by which engagement and brand recall can be enhanced.
Solicit customer feedback: Customer feedbacks are regarded as one of the prominent
concept by which engagement of them can be enhanced (Idrees and Xinping, 2017). Feedbacks
are generally taken in order to examine loophole of services so as to understand areas due to
which customer satisfaction is lacking behind. VriSoya hotel is highly emphasised on taking
feedback as the hotel is a newly opened chain so they are required to modify services as per
needs and desires of their prevailing customers.
CONCLUSION
From the above report this can be concluded that customer retention is highly essential
for a business to grow and sustain as well. Customer retention is regarded as one of the major
constraint by which longevity of engaged customers can be intensified. Marketing activities and
strategies are designed in such a way that this could lead in more sales and engagement of
customer so that immense profitability can be enjoyed by the business. Marketing mix is used by
business in order to understand their strategies for various aspects and to determine their market
position so that any modifications which are having direct impact over business can easily be
determined and executed as well. Customer loyalty programs are designed in order to provide
value to loyal customer and to boost courage of their customer to use organisational offerings in
repetitive manner. Loyalty programs are helpful for hospitality businesses in making more loyal
customers and enhancing customer engagement and retention for longer duration.

REFERENCES
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