How could a large company like Starwood address the issue of exploiting customer data while at the same time safeguarding and respecting customer privacy?
Starwood can address the issue by only collecting the relevant data, offering protective mechanisms, as well as respecting customer rights and privileges. The information collected include both personal and non-personal identity information. The firm should consider situations under which it may disclose customer information such as customers’ consent. Large companies should limit the information they provide and require customer to use third parties to protect their personal information. Customers may safeguard their privacy by clicking on the link provided in such communications or contacting the firm directly to opt out of telemarketing, direct marketing, emails, or surveys.
How can Starwood attract the loyalty program nonusers into the program or find out more about the behavior and preferences of this large group?
The reasons why nonusers refuse to join loyalty programs include disorganized information, unachievable requirements, and disclosure of information. The number of people concerned with the privacy of their personal information is increasing. Starwood can increase the number of people joining the loyalty program through B2B partnership and offering more specific and accurate promotion. Large companies may need to regularly send people to their overseas branches to understand customer preferences. These partnerships can help large companies find potential users to join the loyalty program. Too much information may confuse potential users and customers need simple and casual relationships.
First, Starwood should give members the option to choose when to join and quit such program. The firm delivers offerings and promotions through mail. However, when customers register the “Starwood Preferred Guest” loyalty program, there is a check box giving email preferences. Second, the firm should use its customer database and information system to determine the frequency of sending promotional emails to a particular member, and the type of offering to send. For example, customers who score high response rates to information about points redemption may require sending more information about the same to this member. Summarily, the objective of Starwood’s direct offering is to focus on quality not quantity. Although the firm wants to customize its up-selling and cross-selling, these efforts may offend the customer. Starwood can find the limit by understanding background as well as needs of the customers. They can conduct a research to find out how customers feel and find out potential problems related to the method used in the delivery of the loyalty and program.
Reference:
Olson, P. (2005). Consumer behavior and marketing strategy. New York City: McGraw-Hill Companies,Incorporated.
Hanson, E. R. (2011). Mass communication: living in a media world. Texas: Mcgraw-Hill (Tx)
Wirtz, J. (2012). Essentials of Services Marketing. Upper Saddle River, New Jersey: FT Press.
