Company: Kimpton Hotels
Contact: Steve Pinetti, Senior VP, Sales & Marketing
Location: San Francisco
Industry: B2C
Annual revenue: Confidential
Number of employees: 7500

Quick read:

A large hotel group had successfully created a loyalty program based not on miles or points but on rewards geared toward individual preferences. But the company's email program—a key element in a good customer relationship strategy—was not nearly as well-defined.

The company's branding also was not very clear. Each hotel was branded separately, and even frequent guests had no idea of the corporate name.

By implementing an email strategy that focused on segmentation and on targeting communications based on individual preferences, and by slowly adding a corporate branding strategy, the company increased the average revenue generated by a customer email campaign from $70,000-$80,000 to $350,000-$750,000.

The Challenge:

Kimpton Hotels and Restaurants had created a loyalty program called Kimpton In Touch, which was geared toward recognizing and rewarding the individual wishes of its guests. Kimpton In Touch members could define their preferences down to the type of pillow they preferred and whether they liked rooms on a high floor or closer to the ground.

The company had an email incentive program that it regarded as relatively sophisticated. Kimpton officials tested various elements within their campaigns—where the offer should be, whether it should be in dollars off versus percentage off, etc.—and had modest success. Typical campaigns brought in between $70,000 and $80,000 (for a $5,000 spend).

Steve Pinetti, senior VP of sales and marketing for Kimpton, felt strongly, however, that if the email program were as focused on individual customer care as was its loyalty program, he could increase revenue significantly.

Pinetti had another problem: the Kimpton brand was nonexistent. Guests of each hotel knew it by its individual name rather than by a brand name, so it was difficult to cross-promote brands. Hence, it was a challenge to fill beds in a new hotel because Kimpton's loyal customer didn't realize that the new hotel was a Kimpton hotel.

Campaign:

Pinetti and his team began an email program that revolved around targeted communications to various affinity groups and around building a Kimpton brand.

Step 1: Invite customers to join a specific affinity group

When Kimpton In Touch loyalty program members and other guests joined the Kimpton email program, they were asked to indicate the types of communications they wanted to receive. Customer affinities were divided into seven groups: wine, pets, dining, eco issues, LGBT, "hot dates and great rates," and "packages and promotions."

Working with vendor iPost, Kimpton integrated its CRM database with its booking database so that whenever a guest updated his profile, adding or deleting preferences, it would be updated both at the front-desk level (so Kimpton representatives would be aware of a guest's preferences) and at an email level (so email campaigns could be highly targeted).

Step 2. Begin to slowly introduce the Kimpton brand

Pinetti began to include a branding line at the bottom of emails that were sent from the individual properties to loyalty members of those properties. The line included the Kimpton logo and mentioned that the hotel in the email was a Kimpton hotel.

After about six months, the word "Kimpton" began to be used in the "from" line in every email from individual hotels. After another six months, the logo was moved to the top of the message, next to the name of the specific property. Then Kimpton became the masthead, and the name of the specific property was reflected in the body of the hotel.

Step 3. Allow individual hotels to send customized emails

Although Kimpton was attempting to improve corporate branding, it wanted the individual properties to continue to be able to send email campaigns. Pinetti and his team created an automated system that allowed the managers of the hotels to work within a template in order to send their own emails with specific offers for the customers.

Step 4. Send targeted emails

Once the systems were integrated and the affinity groups were formed, Pinetti began to create targeted email campaigns for the different groups.

For example, when a new Kimpton hotel opened in New York, Pinetti created a campaign that talked about the new hotel and included a list of "things to do in New York." It was targeted to particular segments of the email list:

• Geography (those in the vicinity of New York City)
• Those who had stayed recently in nearby Kimpton hotels
• Those who stayed regularly in nearby Kimpton hotels

The emails were also customized by affinity group. The list of things to do in New York was different, depending on whether a visitor was a member of the LGBT list, the eco list, the dining list, the wine list, and so on.

Results:

Emails campaigns that used to generate between $70,000 and $80,000 in room bookings now generate between $350,000 and $750,000 in bookings, according to Pinetti. "Almost every single email campaign we've done has been a big hit," he said.

And now, when new hotels open, Kimpton has little trouble filling beds. The emails were successful at building a Kimpton image and at cross-selling among Kimpton brands.

Lessons Learned:

Identify affinity groups early on

As you gather names of people who want to receive data, determine as early as possible what buckets of data you want to have available, Pinetti suggested.

"I wish that I had had a vision, three years ago, of exactly how many databases I was going to have and that as I was gathering names of people who wanted to receive data, that it was all in a nice neat and clean box so I could pull the lever for eco or for pets," he said. "At one point I had data in four different places."

Keep segmentation plans "behind the curtain"

It's easy to fall into the trap of over-segmenting and over-committing. Promising highly segmented communication and then not being able to live up to the promise can cause problems. Instead, simply begin serving more targeted communications without exposing too much of your plans.

Useful Links: