An article in the June 21, edition of the New York Times Magazine outlines a new promotional plan by Hyatt. The campaign aims to build loyalty among the hotel chain’s best customers by having hotel staff perform “random acts of generosity.” The idea, of course, is that those customers on the receiving end of these acts will experience the feeling of gratitude and reciprocate by booking more stays at Hyatt properties. The article nicely backs up the notion of loyalty building by citing a paper written by University of Washington professor Robert Palmateri entitled, “ The Role of Customer Gratitude in Relationship Marketing,” the will appear in the July 2009 edition of the Journal of Marketing.
In addition to being a loyalty builder, this promotion is also an MPR campaign. It is particularly interesting because it has potential for great success, while facing some classic MPR challenges. Hyatt is faced with handling a couple double edged MPR swords. First is that of media coverage. Mainstream media outlets like the NY Times and USA Today are covering the story, and the blogosphere is chattering with posts appearing on the Economist’s Gulliver blog, several hotel/travel industry blogs, and even posts on personal blogs and Twitter accounts. The potential downside, however, is that all of these otherwise excellent media mentions can serve to take the “randomness” out of the campaign, thereby diminishing its authenticity and credibility.
The campaign’s generosity is also targeted all Hyatt customers regardless of how often they use the chain’s services. This is a good idea because it will not make any particular class of customer feel left out, and will likely help spread word-of-mouth across a broad cross section of Hyatt customer types. It can be argued, however, that most customers are not the “road warrior” types and, therefore, don’t have a large circle of influence among frequent travelers. In light of this fact, would it be reasonable to suggest that Hyatt concentrate on the high frequency and high luxury (that is- high profit) customers? As there is a standard set within the travel industry for treating good customers better than the average ones, this sort of segmentation can increase the effectiveness of the campaign without alienating too many customers. We’ll be able to judge Hyatt’s success by how long they keep this up, and, perhaps, by the number of imitators this campaign spawns.
If any readers experience this treatment at a Hyatt, please post a comment to this blog entry or shoot me an email.
Reflection:
What MPR opportunities is Hyatt missing?
Is there anything in particular that Hyatt can do to allow them to maximize their use of MPR without diluting the fact that they are truly performing random acts of generosity?
Is a broad segmentation approach best?
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