Home2 Suites by Hilton is the worst

I am a Hilton Diamond member. This puts me into elite status as a customer of their brands. It also means I travel so much on business during the year that I spend my life in airports and sleep in unfamiliar beds, sheets and pillows. It entitles me to a free breakfast (believe me, you get what you pay for), complimentary Wi-Fi and a bottle of water when I check in.

I am in Seattle on business today and I am staying in another Hilton property (I hesitate to call it a brand) called Home2 Suites by Hilton.

Home2 Suites
Hilton can do better than its Home2 Suites.

It is quite seriously the dog ugliest hotel I have ever seen. It looks like it was built from corrugated metal and scrap. From the outside, you would expect to enter the lobby and find folding chairs.

When I checked in last night. I told the very nice desk attendant that the hotel was the ugliest thing I had ever seen. Her reply was interesting. “Yes,” she said. “We are an extended stay hotel.”

I guess in order to qualify as an extended stay hotel it has a prerequisite of being hard on the eyes.

The limited service at Home2 Suites.

As I write this blog from my hotel room, please excuse any ramblings or tirades. I am not quite myself. You see the rooms are not soundproof and the gentleman in the next room apparently can’t sleep with the TV on full blast with a never-ending parade of action movies. I have the opposite affliction and was not able to sleep with explosions and bad acting ricocheting around my room all night.

Despite telling the front desk about this, that TV is still in a continual loop here at breakfast time. I am assuming that limited services in extended stay also apply to front desk help.

Home2 Suites is poor excuse for a hotel and has no place in the Hilton brand. (And I know something about the Hilton brand, having done brand work for Hampton Inns, Doubletree and Homewood Suites.)

This is a terrible industry for branding because the chains slice and dice the category into such fine segments that you can see through them. They think we know the difference between their descriptors of those who stay at their brands. Here I am. Staying at Home2 Suites. Who am I?

Hilton has no brand permission to be in this low tier segment. It is a boil on the brand’s butt.

So who am I? Well, I am a chump, according to this past stay. Let’s see if they have that as a market segment.

Affinity programs and why they fail.

Affinity Programs Rarely Create Affinity

Almost all businesses from retailers to transportation companies have affinity programs designed to foster brand loyalty. Most work very poorly and often are simply a table stake in the category. Retailers, manufacturers and airlines will often find that their customers belong to a host of affinity programs that most certainly includes their competitors. (Affinity programs are an extension of CRM. Read an article on CRM here)

Affinity programs are similar to coupons

In many ways, discount coupons can be part of the affinity programs because they are all aimed at fostering trial and gaining repeat business.

As retailers know all to well, this sort of affinity program has severe limitations because consumers all begin to regard the couponed price as the real price.

Affinity programsAs a result, a business built on couponing lowers the standard price point significantly and reduces margins. P&G (Proctor & Gamble) are victims of this game. As margins reduce so do advertising dollars. What these packaged goods giants are left with is poorly supported brands that rely on a discount price for business success. Not a very good model to say the least.

I have written extensively about the airline industry in the past. Nowhere are affinity programs more a part of day-to-day business and many are utter failures. Often times the programs seem more like a criminal sentence rather than a benefit. Let me give you a personal case in point.

Airlines use affinity programs as a cornerstone of customer relationships

I have frequent flyer accounts on a multitude of US airlines. These affinity program accounts promise advantages on international carriers as well because of the alliances (like the STAR Alliance, SKYTEAM or ONEWORLD Alliance). I am a perfect example of a prospect who belongs to a host of competing programs. How then do the airlines try to compete for my business? In a word—Status.

United Airlines affinity programsWhen you fly as much as I do, gaining status on one or more airline is not that difficult. The key number to remember is 100,000 miles. Generally, at that threshold your status is considered premier. Don’t confuse this with PREMIER STATUS, which is an industry designation. I am speaking of having gained a premier position in status over other flyers. And this is where the trouble begins. The promise of status is very different from the reality.

I have flown over 2.5 million miles on United Airlines. As a result, I earned their top tier status. I am officially known as a Star Alliance, 1K Gold Member. This means I have flown over 100,000 miles in the previous calendar year. Sounds impressive on the surface but the system really falls apart after that.

Global Services. The Pinacle of Affinity Programs

On United Airlines they have a special status known as Global Services. If you have ever waited in your designated line at a United gate you have probably heard this group called to board the aircraft after people with disabilities that need extra time to board and in conjunction with military service people in uniform. United does not disclose how they formulate the invitation to Global Services but there are plenty of blogs around that speculate in a revealing if not an accurate way on just how they do it.

Global services is the ultimate affinity programTwo years ago, United awarded me with a Global Services member invitation. Benefits included first on the aircraft boarding, upgrades to first class 72 hours before your flight based upon availability. A separate phone line to call to speak with a Global Services representative. No fee charges to change a reservation. Hotel rooms paid when needed —regardless of the reason (including weather). And if possible, they will even pick you up at a connecting gate with a tight connection and whisk you off directly to the next gate in a company automobile. I have even had them bump a fellow traveler from a flight in order to guarantee me a seat in a last minute change.

Affinity programsSounds pretty good. And it can be. The problem is in how United manages the Global Services membership. It turns out that Global Services status is not based upon miles flown but rather the revenue you generate for the airline— in comparison to your peers.

This past year, for example, I flew my usual 100,000+ miles on United. I also have a United credit card upon.which all of my travel is booked. My Hilton Honors program is linked to the United account (Hilton touts it as double-dipping) and even my Hertz rentals get logged into my United Mileage Plus account.

This year, United took away my Global Services status. The reason? Because their revenue was down on my total spend. I’m now just a 1K flyer.

I know, who am I to complain. Well I’m going to complain and I’ll tell you why. I am a human being and we all feel about our privileges in the same way we feel about a coupon price being the REAL price. Once we have it we feel punished without it.

How should affinity programs measure affinity?

What United did not recognize was the value of my long term business with them. They have no metric for understanding it and as a result will be the ultimate loser in this game.

American Airlines affinity programsAs a 1K, I’m on upgrade lists but I rarely get them because they continue to discount the first class seats up until the time of departure and award the remaining seats to any and all Global Services members. I no longer have a designated customer service rep to help me sort through the myriad of travel issues that accompany this many flights per year. On top of this, no one cares if my connections are tight or that I miss flights because of delayed connections. Well, almost no one because my clients and I care. It’s just that United does not.

Affinity programs

What United does no know is that I also have a premier status on American Airlines. I am an Executive Platinum with American and United just said goodbye to  all of my business.

Here is a bit of history. My local airport is a small regional one in Greensboro NC. Aside from a few select destinations like New York, Chicago, DC, Atlanta, Philadelphia and Dallas all flights require a connection. Many years ago I started flying with US Airways because they had the most connections out of Greensboro. I could get almost anywhere in the nation via a short 20 minute connecting flight through Charlotte NC.

As my international business grew, I began to fly more and more on US Airway’s STAR Alliance partner United Airlines because they had great connections internationally through another partner airline Lufthansa. Over the years, I flew more and more connections through United as opposed to US Airways because the hubs of Dulles, O’Hare and Newark worked as well for me as connections from Charlotte.

This seems to happen to everyone. Affinity Programs lose relevance.

What happened to me, as often happens to frequent flyers, is that my status with United grew and I tried to consolidate more of my flights with the airline to gain greater status. In an odd twist, United began to cut service from Greensboro at about the same time they acquired Continental Airlines.

United eliminated direct flights to Houston (a Continental staple flight), took on the Newark connection route and eliminated all real United flights from my airport. In its place they flew only United Express flights from GSO (as Greensboro is known) which utilizes small regional jets and are owned by companies like GOJet and other regional carriers. These flights were smaller and more cramped but the longest leg of the connection was Newark and you can put up with anything for an hour and a half.

Affinity programsThe next shoe to drop occurred when US Air merged with American Airlines, thus eliminating the option of any connecting flights through Charlotte. American is part of the ONEWORLD Alliance and not the STAR Alliance. At the same time as this merger, United stopped flying jet aircraft between GSO and Dulles and replaced those flights with a turbo-jet WW2 throwback that added 20 additional minutes to the flight.

Then United cut back on the frequency of flights eliminating the possibility of caching an afternoon flight out of DC for any international flights. Reliability of the on-time arrival of the connections was so bad that I took to always taking the earliest flight. Regardless of the length a layover I flew early because I was consistently missing my connections on United Express from Greensboro. To be safe, the best bet was first flight out in the morning on flights that originated from GSO.

Affinity programsThrough all of this turmoil, I remained loyal to United because of my Global Services status. They bailed me out of many a tight squeeze by meeting me at the gate and shuttling me to my connection. They provided me with the flexibility of flights by booking me on competing airline flights when the connection failed to work as planned. They treated me as if I mattered. As a result, everyone in my company flew United because often my colleagues fly with me. United failed to measure this value.

Affinity programs and the nNFL Baltimore ColtsThis past January, when United dropped me back to 1K status I gave up my loyalty. The reduction in status did not make me want to try to book more flights with the airline in an attempt to regain status. It had the exact opposite effect. It made me angry with them. I felt like a Baltimore Colts fan who had an emotional connection to a team that left me stranded in the middle of the night.

Suddenly I realized that my belief that I mattered to them was a figment of my own imagination. The affinity program was completely one-sided. They had no affinity for me.

In measuring my value to the airline, they failed to take into account the sacrifices I made to remain loyal. They also failed to calculate the value my fellow employees brought to United by flying with me. They completely missed the point. Affinity must work both ways or it simply does not work.

The brand opportunity for affinity programs

Here then is the brand effect of affinity programs; the value of a member needs to be calculated as a lifetime benefit not a short term measure. Once a benefit is granted it should be considered long term because anything less than that is viewed as a punishment. So the threshold of premier benefits needs to be a bit higher and the forgiveness of not meeting that criteria once gained needs to be significantly lowered.

Cvs affinity cardIt is possible that all affinity programs are incomplete or failed attempts at fostering loyalty. Often they begin to feel more like handcuffs than they do a life-line. The very act of specialness always requires that many be left out.

Think about this for just a moment. How special would it feel to be a premier member only to find out that everyone had the same status and boarded at the same time? You see the conundrum. Signaling out specialness is a double edged sword. It must cut a bit but not so much that it hurts.

Affinity programsThe airlines are in deep trouble. Currently, their revenues are up but that is due only to the dropping cost of fuel. They have never understood the costs of doing business and they continue to miss the value of customer loyalty. For the airlines the battle is defensive not offensive. They struggle to maintain loyalty and have very little to offer in the battle to steal market share.

To make up for this they have created affinity programs that express no love for the customer or prospect and reward only short term investment. They have never developed a metric to understand real value and fail to measure and reflect the sacrifice the member has made to remain loyal.

We have many choices in today’s world and most of us chose based upon short term values. Businesses, or rather brands must have a longer horizon. If they do not they become prisons rather than coveted havens.

 

Airlines and thier markets

The retail category market study

The worst marketing. Airlines.

Airlines need culture change

I have not blogged on airlines in quite a while and I thought it was appropriate to look at the category again in light of the new CEO for United Airlines (Read a market study on the entire category here) and my thinking that airlines need culture change.

Airlines need culture change
United’s former Sleezball

Funny thing, United is getting criticism for not looking within the industry when it appointed Oscar Munoz as its new CEO. It seems that United has trailed all of the major carriers in terms of customer satisfaction in the past few years and this is being blamed on the fact that former CEO, Jeff Smisek, who resigned last month because he was a sleezball, was not from inside the industry either. Come on. Give me a break.

Airlines need culture change
New United CEO Oscar Munoz

In the spirit of full disclosure, I am what United has designated as being Global Services. This is their highest status in their frequent flyer pantheon. For those that do not know all the benefits I am privy to because of this status, it means that I get to board the aircraft right after the lame and the infirmed and then have the privilege of being crammed into a tiny seat for longer than almost all other flyers. In the common event that the flight is delayed, I get to sit in my confined space a few minutes longer than others. Sounds good doesn’t it?

Airlines need culture change. Especially UnitedUnited has continued to disappoint me. It doesn’t even recognize that, in an industry of mediocrity, that all airlines needs culture change. The flights are so delayed that I have taken to flying out of my local airport first thing in the morning even if my connecting flight leaves late in the afternoon. All too often, subsequent flights out of Greensboro are later and later as the delay in takeoff is compounded by all the other late flights that my aircraft suffers before arriving to GSO (Triad International Airport, named so despite the fact that no international flights begin or end there). These delays are getting all the more common as airlines (not just United) push these planes to the breaking point by flying tight schedules designed to eek out every penny of profit from the over-worked commuter flights that feed their infamous hubs.

Airlines need culture change not more of the same

I recognize that all I do is complain about airlines. Some of you may say that I need to move to a city that has direct flights and does not rely on connecting flights as a requisite to get anywhere. I have to admit. I have entertained this idea at times. But such a change in domicile is not without costs. By COSTS I mean the flights that fly direct are WAY MORE EXPENSIVE. It is actually cheaper, much cheaper, for me to fly from Greensboro to Washington Dulles and then connect to a flight to Geneva then it is for me to fly direct from DC to Geneva without the connection. Crazy.

The problem with airlines is the airline insider.  Think about the way those in the industry measure customer satisfaction. The percentage of on-time flights, comfort in the seats and whether the airline gives you a 5-cent bag of pretzels and 4oz of a soft drink or water. They also offer coffee but I don’t seem to be able to recognize the taste as any version of coffee. Think about it. They measure customer satisfaction by standards that should denote the lowest common denominator of any airline.

Its could give a lesson or two on culture change and Airlines need culture change.I think the industry only has hope by looking to an outsider to change direction and recognize that, while they may be in the transportation business, the airlines are equally in the hospitality business. Is Oscar Munoz the answer? I don’t know. If he fails to change the entire paradigm, I would suggest that they appoint a new COO who understands the logistics of the industry and then hire a senior leader from Ritz Carleton as its next CEO.

How might culture change when leadership decided that customer satisfaction was more than being on-time? Ritz is not just a hotel brand. It has actively positioned itself as different and better from its competition. It has made service personalized and actually makes you feel as though you are fortunate to have chosen that brand.

What ALL the airlines need is culture change and a recognition that we would like more than what we are getting. They could start to measure their preference not in terms of oversold flights because they have cut back on the schedule but rather how many more flights they would need to account for the increase in traffic. Even Southwest would begin to worry. Maybe standing in line for a seat is not that much fun. Is everything in the airline industry based upon discount fares and fewer fees? There may be a different path. Hopefully someone sees that. Airlines need culture change.