Accor Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Accor Case Study Solution

Turning loyalty programs into loyalty ecosystems

In the recent consolidation, acceleration and diversification era,it has been reported that hospitality groups do not demonstrate the capability to have a loyalty program. About 50 million members of the associated with the loyalty program always tend to serve as the key driving factor of the bond that can be created with the guest. But, it is considered important to embed such a program within limitless touchpoints and brand ecosystem. A wide-ranging brand ecosystem is required to be supported through a wide-ranging touchpointsecosystem i.e. call centers, digital marketing, chatbot, mobile application, web application and most importantly hotels.

Bringing simplicity, clarity, and speed

The key objective in terms of bringing improvement in the customer touchpoints and digital transformation process is considered to a simple factor i.e. to make the life of a customer easy. On the other hand, speed, clarity, simplicity tend to be the top priorities that drive the revamping of the digital platforms. For example, while making bold choices, the speed index of the home page was primarily divided into six categories i.e. two on desktop and four on mobile. This is expected to bring a drastic reduction in the number of displayed rates in the bookings to a maximum number of four customers from 20.

Creating an agile culture

In terms of enabling the true transformation, the employees in the hotel required to work in a different manner which will be based on anticipation of the next day trends and will provide a faster reaction as compared to its competitors through the acceleration of decision-making process. Thus, it primarily includes a significant reduction in the number of organizational layers but will mainly be based on the introduction of a culture which promotes consistent testing and learning, collection of real-time reviews in the form of feedback and development of partnerships with different types of organizations which includes Asian tech giants to the start-up in France. Thus, AccorHotels is still observedstriving in terms of the development of an innovative business mindset ofwhich will be based on the successful and efficient performance of employees at work. (Baker, 2018)

Competition:

Due to the low entry barriers in the hotel industry, the competition is increasing with the change in time. Online travel agents (OTAs) and Airbnb have resulted ina significant increase in the availability of options for customers in meta-search engines. Airbnb is an intermediary platform that permitsthe customer to customer interaction creating a market buzz.OTAs have the biggest competitor for hotel companies that are attracting customers by capturing the central focus for an online booking strategy that making the customer focus away from their brands. That is why it is unwanted for hotels. Although OTAs believed that attraction and retention of the customer can only get by providing them experiences rather to make click on its website. Repeatedly, many of the hoteliers entered in partnership with OTAs in order to catch more benefits and they made it but became very costly for both and cannot succeed to tap new customer market.

Change in Consumers’ perception:

The emphasis on what customers are looking for, in order to select the hotel they want to stay at and the methods they would prefer for booking through, it is considered important and tends to be an easy approach to implement the effective digital strategies to direct the customers to their end objective. Thus, the advancement in the technological use and the provision of almost each and every type of service at one-clickhas led to a significant increase in the expectation of easy booking of a satisfactory room with all their specifications highlighted. As customers want choices, the objective is to make sure that such experience is being delivered through their visits to the direct site. By focusing on direct sales,it is considered that they can surely establish a strong customer relationship and provide their customers with more than average service as per their expectations while booking via indirect source.

The customer looks for personalized, new, emotional and different experiences. An indirect site used for booking cannot provide such experience to customers even though OTAs are often used by businesses in order to provideassistance in capturing a new customer base. Considering the fact that once the customers make the transition to the home site, companies such as Accor will keep them for subsequent bookings as well as not returning to the OTAs. While on the other hand, the representation of the benefits and perks of doing a hotel business is primarily based on the notion that customers love to feel well-attended and special. Due to this reason, the loyalty program is being used for providing the customer with such experiences and hopes which significantly allows the customers to continue their traveling experiences with the organization. Additionally, the platform of mobile application tends to provide assistance in making the loyalty programs hassle-free and easy-to-use for the potential customer basethus ensuring the comeback of customers.

Financial Growth:

The successful growth of Accor is considered to be represented in Europe by itself other than in North America and China. It has been stated by Accor that the target is about to reach €1.2 Billion EBITDA by 2022 demonstrating a 5.9 percent market growth for the year 2019 i.e. €825 Million. Similarly, in the fourth quarter of 2019, Accor represented Revpar growth to about 1.7 percent i.e. an increase by 0.6 percent. Whereas in Australia, the Revpar growth had declined by 0.8 percent with a 7.3 percent decline in the EBITDA for the division of its hotel assets as a result of the leases in relation to the portfolio of Mantra which was acquired in 2018. (Doggrell, 2020)

Additional Strategies:

Considering the issues faced by the organization and the initiatives that have been analyzed in order to improve the organizational performance and strengthen the brand position in the hotel industry, the organization is required to implement the below-mentioned strategies in order to remain competitive in the hotel industry.

Social Media Marketing:

In recent years, the trend and the use of social media platforms have increased to a large extent which allows each individual with access to socializingto the most powerful avenues both for promotion and marketing of the business.

Pros:

The key advantage of adapting social media marketing in comparison to traditional marketing methods is based on the fact that it is almost free to get started.
The promotion of business, services and offers through the use of social media platforms allows the organization to reach millions of people through one platform.
It significantly provides immediate visibility of the published content to both the target and non-target audiences throughout the world.
Increased probability of interacting with the customers tends to promote the business through boosting the online presence of the organization leading to improved brand loyalty.

Cons:

One of the key disadvantagesof social media marketing is that it is time-consuming i.e. it requires a lot of research in order to keep the audience engaged and interested.
It takes control of social media marketers and the owners of the business.

Differentiation Strategy:

It mainly includes product creation based on high-quality and services tailored in order to meet the requirements of the consumers. Such products and services tend to play a significant role in distinguishing the business from competitors and other players in the market.

Pros:

The invention of new products is considered to be an important factor in differentiating the products and services in the market which tend to demonstrate the probability of making the organization the market leader.
Differentiation is primarily known for the maintenance of high and efficient relations among the customers and the organization in terms of accommodating its different type of consumer base.
Product advertisement and marketing is a strategy that falls in the category of differentiation strategy which creates the probability to successfully convert the customers from the business competitors.
As the Accor currently offers its services at low prices, providing customers with the least price services attracts a widerange of customers in different areas.

Cons:

Extreme differentiation tends to demonstrate a negative impact on organizational growth rather than bringing significant improvement in credibility.
The addition of unnecessary products and services might result in the loss of a potential consumer base.
Offering services at lower prices might create a misconception in the minds of customers that their services are similar and low-quality like the cheaper brands.

Timeline for improved marketing effectiveness:

The marketing effectiveness of the brand plays an important role in the achievement of perfect balance from brand building to the successful activation of the brand. Due to the increased investment in social media marketing campaigns, the average spending in promoting the brand has significantly increased to about US $4.3 billion. (Peter S.H. Leeflang, 2014)Therefore, the key obstacles that greatly influence the marketing effectiveness primarily include the costumer-facing collateral, brand demand, threat of competition, increased opportunities for sales and competitiveness. Thus, it mainly includes four steps:

Planning the campaign in order to track the brand marketing (10 days)
Differentiation of the channels with the increased probability of demonstrating the increased engagement of customers with the organization. (30 days)
Determination of the marketing metrics based on the data collected through tracking the consumers’ visits on the website. (15 days)
Measurement of the improvement in marketing effectiveness. (5 days)

Progress measurement:

In order to evaluate the marketing effectiveness of Accor after the implementation of additional strategies, the progress can be significantly measured through considering the key performance indicators which mainly include: return on investment – the measurement of the sales revenue generated by the campaign; cost per win – the measurement of expenses of each sale; cost per lead - the measurement of the marketing campaigns’ cost effectiveness; conversion rate – the measurement of the conversion rate on the website i.e. the conversion of visitors into potential customers; incremental sales – the measurement of the marketing efforts contribution in the number of sales; purchase funnel – analysis of the sales process of the leads that tends to be generated through the implementation of the marketing campaign; and customer lifetime value – the measurement of the life-time value of the potential customers..............................

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