Skift Global Forum: Starwood’s Chief Brand Officer on Loyalty and Innovation

Starwood isn’t the world’s biggest hospitality company by market cap — that’s Hilton — but it is the leader when it comes to combining old-school marketing with modern tools like social media to expand it’s reach.

It’s also not shy about rethinking loyalty programs in ways that compete more with brands like American Express than it does with peers like Marriott and Hyatt.

Phil McAveety, EVP and Chief Brand Officer of Starwood Hotels & Resorts Worldwide, will be speaking at the Skift Global Forum about the future of marketing in travel, and Skift recent caught up with him to talk about the brand’s complex marketing mix. He oversees the company’s loyalty program, Starwood Preferred Guest, and is responsible for all aspects of marketing for Starwood and its brands, including Westin, Sheraton, W, Le Meridien, The Luxury Collection, Four Points by Sheraton, and others.

The Skift Global Forum is sold out. 

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Skift: How do you successfully market a brand on its values or attributes when consumers — including pinched business travelers in addition to budget-conscious leisure ones — are increasingly making choices based upon price?

Phil McAveety: In today’s business landscape, it is more important than ever to create emotional connections with consumers. If travelers develop bonds to our brands through our advertising, programming, on-property experiences, and service delivery, then price becomes less of an issue.

We must prove the value they are getting — whether staying at our St. Regis brand for an anniversary milestone or at Four Points for the kids soccer game away — by effectively delivering on our brand promises. And the good news is, thanks to technology, there are more ways than ever to engage with consumers.

Today, we are able to be more targeted with marketing communications, meeting consumers on their terms in more relevant ways, and we can also be more places, so they can engage with us however and whenever they prefer. SPG is also key to helping us create loyalty beyond reason. Even during the recession when the skies were gray, our SPG members were even more loyal with their stay nights up nearly 10%.

While new technologies are an advantage, we also know that our associates help us deliver on those simple human truths of wanting great service and a good night’s sleep, and that’s pretty impactful for creating emotional ties. We believe in the power of brand equity, and if we can deliver a great experience for our guests each and every time, then they’re willing to pay a little more.

Skift: How do you think the recent trend of dollars to loyalty (like Delta) or third parties getting more involved in loyalty (like Expedia) affects brands’ relationships with both their most loyal customers and future customers just beginning down the path of choosing a preferred brand?

Phil McAveety: This goes back to creating those authentic connections with our guests, and for us the brand experience is key. We are not Nike or Apple; you can’t take a product home with you. And as we have no physical product as such, the experience is our brand. We have nine distinct lifestyle brands at Starwood, and we have to deliver on our brand promises in every interaction.

This includes the physical (ie- design), the programming of how we bring the brand to life, the technology, which is putting more control in the hands of our guests (and of our associates), and finally, but most importantly, the service that creates more memorable, personalized experiences for our guests. We have to deliver consistently to gain their trust, and we have to listen to their feedback.

We were the first to offer ratings and reviews directly on our hotel websites, and that feedback not only helps our hotels deliver better but also drives to booking because of trust.

Skift: How does mobile impact your marketing efforts? Especially as OTAs/booking sites add push notifications and other alerts before shoppers finally make a purchase?

Phil McAveety: More and more, mobile is everything, and our “mobile first” strategy sets us up to break away from the competition. Our enhanced web mobile experience — designed specifically for mobile devices — makes it easier, faster and more intuitive for guests to find and book their stays.

Most OTAs are focused on a single aspect of the guest journey — getting the guest to the front door. Our digital innovation, combined with our brands, loyalty program and the experience we deliver in our hotels, gives our guests a true “end-to-end” experience before, during and after a stay. We’re focused on the entire guest experience, and our mobile strategy is for our guests to be able to access us whether pre-, post- or during their stay for a truly holistic experience however they chose and on their terms.

Skift: Starwood has embraced new media/social media like few other brands. Why do you think it’s important for brands to incorporate users and customers into their messaging?

Phil McAveety: Mobile and social are changing the way we connect with our guests, creating a 24/7 relationship in- and out-of-stay. Starwood was an early adopter of social networks like Facebook, Foursquare, Weibo and Instagram, and through mobile and social, we’re reinventing customer service. Because we now have a constant dialogue with our guests, we are able to make course corrections, fix problems and deliver highly personalized service to surprise and delight in real time, all the time.

This year, Starwood engaged in nearly 5 million social media interactions with our guests, providing on-the-spot customer service. We understand that in order to accomplish the things we talked about before — loyalty beyond reason, emotional connections to brands — we have to engage in a dialogue with our guests. No longer is one-way communication an effective method and social media is the perfect platform for creating meaningful conversation.

Skift: Travel brands from hotels to destinations to even airlines are now highlighting their role in fostering one-of-a-kind experiences for their customers. Why the shift to experiential travel? What does a brand do when it’s not so unique?

Phil McAveety: We’ve seen a seismic shift in consumer behavior over the past few years, and we know that experience-led consumption is something today’s travelers truly crave.

A couple of reasons for this: boomers may now ‘have it all,’ so they’re looking for more life-affirming experiences; emerging economies are leapfrogging generations of consumer habits, and as they reach maturity, they’re seeking out more sophisticated ways of consumption; and finally, millennials (an ever more important consumer target) are actively looking for “Instagrammable” moments to share with friends and then on their social channels.

After all, if it didn’t post, did it actually happen? We see this trend playing out with our guests whether they want to unlock a destination, learn about the next great thing or simply get a reliable Internet connection, a good breakfast and a comfortable bed. Brands today — even if not so unique — have to find ways to differentiate themselves from the market and then deliver on that brand promise day after day in order to create a truly authentic experience that links with consumers.

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