InterContinental Makes Customers a Priority - Worldwide1 Jan, 2009 By: Jacqueline Renfrow Response
E-Campaign Results Surprise
Perhaps IHG's most surprising DR success in recent years was the launch of its Priority Club Rewards E-magazine in April 2007. Meant to be an awareness campaign, IHG sent out E-mails as a teaser to drive loyalty customers to a landing page that housed rich media, including informational videos. "You can consume rich media in a more mainstream way these days," says Bott. "This is one of our ways where we can convey an intense value proposition in a pleasing, fascinating way and it has gotten a higher rate of return than other communications."
Bott speaks excitedly about the positive ROI created by rich media versus E-mail. For a traditional E-mail newsletter, IHG's ROI is between 2-and 5-percent higher than it would be in other industries, since travel still ranks among the sexier categories. However, IHG's rates for E-mails containing the E-magazine were three times higher than its other E-mail messaging rates. Bott thanks the appealing nature of video — its more dynamic and stimulating format.
"On average, the amount of time spent on the E-magazine is two-and-a-half minutes per customer; that's marketing nirvana," says Bott. And the cost to send out each E-mail, he adds, is less than a penny.
"We're really thrilled with the platform," Bott says. "It's now migrated to target elite customers, non-elite customers, elite with specific earning preferences. We would break even on the return of the first E-mails, and now we're into the 5-to-1 payback range."
Bott sees several benefits to these new forms of communication, including the fact that the optimization cycle can be employed very much in real time. Technology allows IHG to see the message's traction, tweak it and send out a revised message in a short period of time. Like Web site testing, often Bott will test cells of customers and, once they find successful traction, the ad will go out to the rest of the database, which is currently 40 million loyalty customers and growing.
But since IHG's loyalty program started back in 1983, some of its customers still prefer direct mail pieces. "E-mails have taken over the lion's share, but still, a bunch of customers prefer paper; they like to put it in their brief case, and, for a lot of folks, it's about ritual. So it will probably be several more years before our paper numbers [drop], and I don't think it will ever entirely go away," says Bott.
Bott estimates that 95 percent of IHG's communications are through E-mail or some other form of interactive electronic platform. But along with direct mailings, the company also does a lot of point-of-sale materials at hotel locations, including counter cards, tent cards and keycards. "Traditional DR is taking the form of pretty much everything customers are touching — from keycards to the direct mail piece," says Bott.