60 Seconds, May 2004

As we go to press, Marriott Rewards is enrolling its 20 millionth member — apropos for a program that’s 20 years old.

And it’s worth noting that in recent months, Marriott has been awash in industry recognition. It was just named the best upscale hotel by Entrepreneur magazine, and recent surveys have indicated Marriott customers are among the most loyal in the business.

We checked in with Ed French, Senior Vice President of Marketing, and Holly Mendelson, Director of Marketing, to find out what’s going on with one of the true standard bearers of the frequent guest industry.

InsideFlyer:
It’s your 20th anniversary, and you’ve now reached your 20 millionth member — congratulations. You mentioned you might have a few things up your sleeves to mark the anniversary.
Mendelson:
Well, you know about our Megabonus, and our Rewarding Events promotion — those are two of the things. We’ll be coordinating a few more things throughout the year.

IF:
Last June, you lowered your Silver Elite threshold from 15 to 10 nights a year. Certainly, in the airline industry, when programs open up their elite ranks, some members complain about a resulting lack of availability of perks. Have you seen an increased demand on limited resources?
Mendelson:
That’s really not an issue, because remember, we lowered the threshold for Silver; the limited perks start at our Gold level. We were careful not to make it mutually exclusive.

IF:
I’m guessing your Silver tier has grown, then. Have you seen some solid growth in the past few months?
French:
It’s hard sometimes to pull it apart when you think about the individual tiers because of some of the things that are going on like the changes (to elite qualification). If you look at the tiers where we haven’t made changes we’re seeing growth, if you look at the tiers where we have made changes, we’re seeing growth. Our total active membership is growing and the total number of nights that our members are giving us is growing as well. Our indicators are in the right direction.

IF:
We hear conflicting stories on how the business travel industry is doing. To what do you accredit your growth?
French:
I think a couple things. The changes we made in our elite program — that’s been received very positively. I think in general, as business travel has started to pick up, that’s obviously helped us as well. Having a combination of a strong program and a strong core product underneath has helped us grow.

IF:
What kind of customer are you after?
French:
Our program still is targeted at the frequent business traveler, but we hope we can also build a program that can get other frequent travelers and even some less-frequent business travelers. It’s really one of the reasons we lowered the threshold from 15 to 10 nights for Silver, because we wanted to cast a broader net, in terms of business travelers.

IF:
Despite the naysayers, it does look like business travel is picking up. Customers see a lot of hotels and a lot of loyalty programs. Why should they choose Marriott?
French:
We want on two fronts to win the customer. One is based on the product. The product is about distribution and being in the places where the customer wants us to be, and it’s about offering a product and service that’s based on their needs. Then coupled with that a recognition and reward program that encourages people to vest with us, if you will, as their traveling career begins and grows.

IF:
You used the term “traveling career.” It’s interesting, but you don’t often hear terms like that, even in an industry that’s supposed to be focused on loyalty.
French:
We’re trying to look at customers over a longer span of time. We want to recognize them for their business right-now-today, but we also want to be sure to recognize people over their lifetime of travel, and it’s one reason we do look at recognizing members based on multi-year history — in some cases going back years and years in the program.

IF:
But with regard to newer members — how much of your effort is spent on simply informing new customers about your program, and how much is spent in wooing customers away from other programs?
French:
I can’t really give you a quantitative breakdown. We’re focused on
enrolling people in the program, and then doing everything we can to encourage them to give more and more business to Marriott hotels. One of the interesting things we’ve seen is, as people stay in the program longer and progress to higher elite tiers in particular, we’re seeing a bigger and bigger portion of their business coming to us, so ideally we’d like to move everyone up there as best as we can.

IF:
If you could say one thing to our readers, what would it be?
French:
The biggest message we can share with people is just “Thank you.”