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1 Case Study: InterContinental Hotels Group Consolidates And Data Management by Shar VanBoskirk with Kate van Geldern and Angie Polanco Executive Summary InterContinental Hotels Group (IHG) revamped its program during a customer relationship management (CRM) system upgrade. It unified its customer data into one database, consolidated delivery under one vendor StrongMail and centralized management into a single customerfocused team. The multiyear, cross-organization project resulted in cost savings, increased productivity, and more customer-centric experiences. IHG Overhauls As Part Of a Larger CRM UPGRADE IHG is an international hotel company with seven brands including Crowne Plaza, Holiday Inn, and InterContinental and more than 4,400 hotels worldwide. In 2009, IHG began a strategic initiative to improve its customer relationship marketing. Part of this effort included upgrading its promotional, transactional, and loyalty marketing programs. The Challenge: IHG s Program Lacked Comprehensive Customer Data Today, Lincoln Barrett, the vice president for guest marketing and alliances at IHG, manages a well-integrated mix of , social, mobile, and the call center all of IHG s customer marketing channels but this was a long time coming. In our interview with Barrett, he let us know that 24 months ago, IHG campaigns were: Not user-centric. Loyalty program members and nonmembers were managed in separate databases. IHG lacked a unified CRM system, which relies heavily on. The outcome? Fragmented and uncoordinated customer communications. IHG also failed on most aspects of Forrester s marketing review. 1 Managed inefficiently. IHG s program was handled externally by two vendors, one for transactional messaging and one for marketing messages. This meant results data came in separately and in different formats, making it very difficult for IHG to get a holistic view of its customers. Multiple vendors also meant lots of time-consuming back and forth. Uncoordinated across the organization. The relationship marketing team handled outbound marketing and loyalty program s, while the distribution marketing team sent s with transactional communications. The fragmented management of meant uncoordinated campaigns and missed opportunities for cross-sell or upsell. Headquarters Forrester Research, Inc., 400 Technology Square, Cambridge, MA USA Tel: Fax:

2 2 The Fix: IHG Centralized Management IHG did three things to address the shortcomings of the program, which also contributed to the progress of its larger customer marketing renovation. It: Unified all customer data into a single database. IHG built a new customer database and real-time data mart that enabled two new capabilities: 1) access to data from all customers whether they are first-time bookers or loyalty club members from the same place, and 2) the ability to match new data like website activity or purchased profiles to existing customer information. The benefit? IHG can now respond to customer activities immediately with customized s. Its previous data structure updated customer data only every 30 days, which made it difficult to respond by in a timely manner. Consolidated program management under one vendor. For more control of its marketing and transactional programs, IHG integrated StrongMail s in-house marketing solutions into the Unica platform it used for campaign management. In Barrett s words, Internal hosting gave us flexibility with our management. Having one vendor also reduced the enormous amount of handoff time for campaigns and data in working with multiple external vendors. Organized by customer life cycle. To do away with channel-centric goals and operational silos, IHG marketing reorganized according to its customer life cycle. sits within the guest marketing team, which also includes the call center and the social and mobile channels. Re-orgs are never simple, but Lincoln found IHG s was worth it. For the first time, we are organized for the customer. We have one department that runs all customer contact channels, he said. The Results: Efficient, User-Centric Marketing IHG s customer marketing initiative took longer than two years and involved a multiteam effort of , IT, and marketing teams from around the globe. However, IHG has seen a 16% lift in revenue since assuming its more customer-centric approach. -specific improvements include: Cost savings. Because this was a companywide undertaking, it s hard to estimate cost savings for just . However, Barrett confirmed that merging the program under an installed solution from one vendor significantly reduced annual operating spend purchasing a perpetual license has eliminated all ongoing, volume-based CPM fees. Quicker production times. In just three to four days, IHG can now develop and execute campaigns that used to take 22 days to deploy. Additionally, IHG reduced the hundreds of templates previously used for reservation s to one dynamically driven template across all brands, regions, and languages. Barrett explained, Internal hosting cuts the handoff time needed with external partners. We are much faster now with dynamic content and real-time communications.

3 3 Dynamic, customized messages. The robust database of centralized customer information integrated with marketing automation tools makes behavioral targeting in IHG s s possible. s that were formerly basic triggered bookings confirmations now have optimized content by geography, brand, and customer behavior that can upsell and cross-sell additional products (see Figure 1). This relevant messaging works IHG s dynamically triggered prestay averages a 50% open rate and a 20% click-through rate. Comprehensive and timely reporting. IHG now has fast access to more complete and accurate data since it now comes from one vendor and goes into a single, centralized data warehouse. We have better insight into the transactional s timeliness in terms of the data we get back. And we re also able to integrate with the database, so we can understand how customers are interacting with each , Barrett said. What s Next For IHG s Program To continue to capitalize on its integration of with other customer communications channels, we expect IHG to: Improve its business processes. IHG will take steps to improve its internal processes. Specifically, it plans to formalize test and review processes, which will take deliberate action on performance results, and adjust programs that don t work. Advance measurement practices. IHG is building a more dynamic reporting mart as well as developing an approach to tagging messages for effective tracking across channels. Now that it has a line of sight on s base metrics, it is looking to advance measurement practices with attribution modeling across channels. Barrett explained this next step: Ultimately, it is about connecting actions to results, which is something we ve not been able to do in the past. Integrate with emerging channels. IHG is working with StrongMail s social suite to deploy test programs that integrate and social channels. The plan is to create consistent messages across these channels as well as to tag s to measure the lift from extending into additional channels.

4 4 Figure 1 IHG Can Optimize Content With Customer-Centric Offers Messages are customized with hotel-specific offers; there are hundreds of different variations of messages that can be inserted by brand and region. Source: InterContinental Hotels Group Source: Forrester Research, Inc.

5 5 endnotes 1 IHG used Forrester s marketing review to examine its business processes and user experience to diagnose places where its programs were underperforming. See the July 14, 2010, The New Marketing Review report. Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 27 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please clientsupport@forrester.com. For additional reproduction and usage information, see Forrester s Citation Policy located at Information is based on best available resources. Opinions reflect judgment at the time and are subject to change