Lacek's Segmentation Strategy for Starwood Preferred Guest Gets Results

Challenge:
Improve response to promotional communications and increase ROI by decreasing communications expense.

Solution:
The Lacek Group helped Starwood Hotels & Resorts move from applying a broad-based communications approach to a targeted communications strategy that focuses on individuals with an existing affinity to Starwood or a predisposition to become loyal Starwood customers. This was accomplished through the development and implementation of a segmentation strategy that profiled Starwood Preferred Guests based on current value, opportunity (via existing and overlay information) and risk. Members were subsequently categorized into segments, each receiving a unique and customized set of offers. For instance, members in the "Grow Share" segment received different offers than members categorized as "Retain."

Results:
Since the shift to targeted communications occurred, incremental ROI on Starwood promotions has increased more than 200%. Additionally, reduced communication costs have allowed Starwood to increase offer spend on high opportunity members.