I couldn’t believe the coincidence. I was scanning McKinsey & Co.’s newsletter called McKinsey Quarterly that I get online and that I find a great source of up-to-date articles, videos and interviews on what’s new in business consulting and strategy. I was reviewing the most recent edition as part of our class in social media. We had just finished discussing the topic of big data and I ran across this piece entitled “Redefining Service Innovation at Starwood” by the senior vice president of distribution, loyalty, and partnership marketing at Starwood Hotels & Resorts, Mark R. Vondrasek. I was keen to see what Starwood had to say.
It was a forward-looking and very customer-focused interview with two of McKinsey’s employees, an associate principal in their Washington, D.C. office and a director in their Dallas office. The Starwood senior vice president specifically talked about the importance of guest loyalty and its Starwood Preferred Guests (SPG) program, targeting its platinum members. Mr. Vondrasek mentioned “stretch” benefits, meaning that guests can qualify for SPG status without absolutely meeting the minimum number of guest nights. He talked about checking in via Apple Watches, mobile phones, in addition to standard keys. He said Starwood had developed an SPG app so that its guests could tell the hotel if their plane was late, when they wanted to check in to their rooms (YOUR24), if they wanted a Diet Coke and Cobb salad in the room as well as if they wanted the business center or gym open longer. He called much of Starwood’s innovation a “listen and learn” dialogue with the customer. And quite frankly, it sounded great, pretty much what Michael Saylor said hotels were going to be doing in his book, The Mobile Wave.
Then I opened the business section of the Sunday N.Y. Times and there, prominently displayed in David Segal’s (“The Haggler”) column was the headline, “A Preferred Guest Gets the Cold Shoulder.” Guess where? That’s right–Starwood Hotels. Evidently, a Starwood Preferred Program member had his account frozen and blocked from his use because the hotel had believed there was suspicious activity on his account. Problem was, when the S.P.G. member called and tried to get the matter resolved and his account unfrozen so he could use it, he kept being told by whoever answered at Starwood that “I’m sorry. This is handled by another department–which you cannot speak to our call. You can only email.” So he emailed numerous times and got no replies. When that didn’t get anywhere, he contacted the NY Times consumer columnist for help.
“The Haggler” finally got a Starwood spokesperson and after numerous and frustrating follow-ups to resolve the issue, someone in a department that could actually do something rather than just say he had the wrong person. Although the hotel unfroze the member’s account, it offered him nothing else to maybe say they were sorry, “other than access to an account he no longer has much interest in using,” columnist Segal said.
What’s the lesson here?
It’s great to have all these innovative loyalty programs and high-sounding phrases such as “the new service landscape,” “listen and learn,”, and “the power of partnership,” but there’s another phrase that might not sound so M.B.A.-ish or buzzwordy, and that’s the cliche, “practice what you preach” not to mention “walking the talk.” If I were Starwood, I’d be embarrassed by the episode and the contradictory chest-thumping by one of its senior officers in the prestigious McKinsey & Company Quarterly for all the world to see whose readers, very likely, also read the business section of the N.Y. Times.
Here are both pieces: http://www.nytimes.com/2015/02/15/your-money/a-preferred-guest-gets-the-cold-shoulder.html