IHG's Ambitious Marketing Makeover

International Hotels Group merged its relationship and distribution marketing groups to create a common voice and strategy across its customer channels.

"Evolution is not a force, but a process," 19th century British journalist John Morley once said. The quote rings true at U.K.-based International Hotels Group (IHG), which operates seven global hospitality brands, including Holiday Inn and the InterContinental. Over the past year the company has been busily evolving its marketing structure to align with the way customers conduct business today.

According to Steve Sickel, senior vice president of distribution and relationship marketing at IHG, the rise of social media and online travel booking have created an overall shift in customer behavior, and as a result, have forced IHG to change the constructs of its marketing. "You see things like choice and control on a huge ascent in terms of customers' attitudes toward buying," Sickel says. "You put all these things together, and answering the phone and quoting one rate doesn't work anymore."

In 2009 the organization embarked on an ambitious initiative to adapt to these changes. IHG merged its relationship marketing department, responsible for database marketing and one-to-one initiatives, with the distribution marketing department, which oversees the customer channels including voice, search, IHG's website, digital, social media, and the loyalty program (Priority Club). "We have brilliant marketers, but we had a crappy marketing machine," Sickel says.

Lincoln Barrett, vice president of guest marketing at IHG, explains that bringing the two departments together would break down the silos between departments and customer touchpoints and enable a step-change in the way the company can holistically integrate communications and customer initiatives. "Each team was working well and driving value, but there was an obvious synergy to be gained by building an integrated team," Barrett says.

Sickel approached the organizational design of the integration from the perspective of a classic corporate merger: Start from the bottom, write the mission, create value collectively, and from there, design the scenarios that will lead to success. "It was a fundamental shift in the way we did business," Sickel says. "We took two organizations that approached the business somewhat differently and integrated them. In a way, we were synergizing."

Sickle first identified six new functional leaders who would oversee Guest Marketing & Alliances, Global Interactive Marketing, Hotel Marketing, Product Management, Loyalty Marketing, and Guest Relations & Customer Care to serve as the transition team. Barrettt, one of the six leaders, says the team was tasked with defining how each team fit into the new vision and approach, and had to work collectively to create the mission and vision of the new marketing department.

After the transition team agreed on a mission statement-"To leverage every customer touchpoint to drive enduring revenues and brand love-the functional leaders identified four value outcomes based on marketing interacting with customers. They are: 1) sell more hotel rooms; 2) sell customers affiliate products like auto clubs and credit cards; 3) use customer interactions to inform customers about company developments, events, and news; and, 4) continuously learn from customers during interactions in order to better respond to their needs and to better target offers during future interactions.

After the team agreed on the four outcomes, Sickel started communicating these goals at every opportunity. He says that solidifying the four outcomes helped to rally everyone to work toward the same purpose. "I was a broken record. For the first six months I sent videos, messages, and spoke about [the outcomes] at town hall meetings. I over-communicated," he says. "Every time I started a meeting, I said, 'We are this, we work toward these four outcomes, and this is how we drive revenue. If the work that you're doing is not fully leveraging this model, then rethink it.'"

With the goals in place, IHG also had to rethink how the new group would look physically. The groups were located in the same buildings from Atlanta to Singapore, but worked separately. Sickel wanted to physically connect them to encourage collaboration and to support the new organizational setup. "We blew up [the departments] and redesigned them," he says. "In some cases [employees] literally had to move their desks."

The company also established teams that hosted workshops with the newly assigned employees to teach them how to leverage the improved model and to do things differently. Barrett admits that during the integration the teams experienced challenges and organizational uncertainty, such as difficulty in defining people's roles and responsibilities, building connections between the new teams, and documenting processes. But, Sickel adds: "[The process] helped to open their world a bit broader."

In addition to physically moving employees and architecting the departments, Sickel and his team had to build new processes to enable marketing to create consistency when delivering the company's brand proposition. To form cohesion, IHG consolidated its databases to obtain a single view of the customer and built multichannel, real-time response campaigns by partnering with Unica. The data now lives in one operational data store that the team can access from a central location. When customers conduct a transaction on the Web, that interaction goes into the central data store in real time, so the team no longer takes three weeks to respond to a customer action. "No longer are we accessing old batch data," Sickel says.

Rather than introduce new technologies to enable the processes, the employees from one group learned how to use technologies that had only been used by the other group and vice versa. For example, the distribution department learned how to operate the campaign management system, which previously only the relationship marketing staff used. Sickel says this widespread technology adoption required training. "It was about leveraging the investment that we already had," Sickel says. "It was not dissimilar to any technology deployment where you have to put the effort into good change management to get people to do something a different way."

The four outcomes spell success
The new distribution and relationship marketing group consists of 3,300 employees globally and includes the company's 2,500 contact center agents. Sickel says the marketing organization is quicker to respond to customer inquiries and is creating value from the customer touches that it manages. "Fundamentally, we see our ability to interact with the customer as a unique corporate asset," he says.

Barrett adds that the organization operates with fewer silos and is more synchronized in getting key initiatives to market. "We're all on the same page," he says. In addition, resources are aligned to key initiatives and customers see a more seamless experience across the channels.

As a result of bringing the people and processes together, Sickel says IHG has seen improvements that pertain to each of the four outcomes. In May the rate at which the organization closed sales increased 20 percent over the same period last year; the company's second goal of selling value-added items with hotel rooms grew between 9 and 11 percent year over year; IHG enabled the third outcome-better informing customers through a multichannel brand relaunch and ad campaign; and the fourth outcome-learning something new about customers, focused on email collection. As a result IHG increased the number of new email addresses it collected by 25 percent.

Looking ahead, Sickel wants the fortified marketing group to further leverage social media and mobile to communicate with customers. Last year the company experimented with a "Friends and Family" Facebook campaign that offered discounts for rooms. IHG pushed the campaign internally to employees from its Facebook page and the employees virally promoted it by forwarding it to their friends and families. With virtually no financial investment, the campaign generated $50 million in revenue in one year.

Sickel says the marketing organization is learning from experiences like the viral campaign on Facebook. "We're still keeping our ears to the ground and seeing what moves and how we take advantage of the movements," he says. "Who knows what's around the corner."

Despite the positive results, Sickel says IHG still has room for improvement. "It's a good start, but there is still a lot more we can do."