What Is Hiltons Core Business - Coursework Example

Good brands foster customer loyalty and loyal customers are more willing to increase their frequency of purchase or number of purchases in addition to becoming marketers for the hotel through word of mouth. The brand is therefore an important asset to any company.
2. Evaluate the performance of the Customers Matter initiative to date. Calculate an ROI for the project as (Total number of calls * increase conversion ratio * net revenue per call) / OnQ CRM investment. Support this analysis with qualitative rationale. Note the difference between OnQ (the entire infrastructure for running Hilton that cost $100m) and the OnQ CRM which is the focus here.

From the chart above that has been derived from the ROI equation it is evident that the Customers Matter initiative has been having an increasingly positive impact on Hilton. The positive slope manifests an increasing return on investment. From the chart, we can conclude that Hilton’s managers have been effectively using the investment in OnQ CRM to produce more income.
Another way of looking at this chart is that the numerator has been increasing more rapidly than the denominator. This implies that many calls were closed (as shown by conversion ratio increases), Hilton’s efficiency increased (as shown by net revenue per call increases), and increase in customers/potential customers (as shown by the increase in the total number of calls). In summary, it means that Hilton is improving its ability to extract value from its investment in the OnQ CRM system.
3. What do you think Hilton leadership should do after the Blackstone acquisition? Should they further invest in CRM or simply maintain the status quo? What aspects of Hilton’s CRM should be strengthened, if any, and how?

Hilton's leadership should focus its efforts on using the resources obtained from the Blackstone acquisition to tackle its threats and weaknesses. For starters, Hilton is aware that consistency and delivery of service are heavily dependent on its front-end staff. Secondly, with the CRM Hilton is slowly losing the chance to interact with its customers i.e. human touch is slowly being replaced by IT systems. Hilton is in the hospitality industry and as much as IT systems may be effective; they cannot create personal relationships with customers. Furthermore, too much investment in the CRM would create too much reliance on it, which implies that it could be a single point of failure. This only increases the risk associated with using the CRM.
From the points raised above, we believe that Hilton would be better off maintaining the status quo than over-investing in the CRM. The funds obtained from Blackstone could instead be used to improve the group’s management system, and front-end staff skills acquisition and to support the expansion drive towards increasing its hotels to increase its market share. From Exhibit 1 (Applegate, Piccoli, and Dev 7) we can see that Hilton is the fifth-largest hotel group. Blackstone’s funds should be used to continue the aggressive expansion program.

4. Briefly evaluate the potential value of CRM for one of the firms a team member works for. How significant could CRM be to the firm? Does CRM raise any potential customer data privacy concerns in this example?
Dell is a leading PC manufacturer in the world and as such requires the services of a robust CRM that can handle over three million customers a day, support collaboration across the company’s global sales teams, and provide assurance to Dell’s value-added resellers. With such a huge customer base and geographic spread of the organization, the CRM enables Dell to capture candid feedback from its 80,000 employees around the world, interact with its three million customers every day, and provide a single reference place for decision optimization. Moreover, Dell is the market leader in utilizing mass customization as a competitive advantage thus the intimacy it creates with its customers is vital for its future success.