Starwood’s CEO Has a Unique View on Loyalty

Adam Aron no longer has ‘interim’ in his Chief Executive Officer title at Starwood.

He launched Pan Am’s first frequent flyer program. As Hyatt’s Chief Marketing Officer he launched Gold Passport.

I had the pleasure of interviewing him on stage at the Travel Executive Summit on Thursday in Atlanta.

Aron was Senior Vice President of Marketing at United and I got to tell the story about his economy meals partnership with McDonalds (the associated happy meal toys available on United’s Orlando flights are still available for sale on eBay). United replaced the galley carts to keep the burger warm while the lettuce and bun stayed cool.

He was CEO of Norwegian Cruise Lines, of a chain of ski resorts, and later went into private equity. He became part owner and CEO of the Philadelphia 76ers.

I pointed out that despite tweeting only 5 times this year he has thousands more twitter followers than I do.

My role was to ask questions, but really just to prompt stories. Whenever he stopped telling a story, I’d prompt another. They were all great to listen to. Each one contained a lesson (what I think of as a You see, Timmy…).

Aron believes:

  • Loyalty programs will spread to more industries, not contract.
  • The basics are Recognize and Reward — he found that was just as true in skiing, cruise lines, and filling sports stadiums as for airlines and hotels.
  • Frequent flyer programs replaced expensive, less targeted, and far less nimble forms of marketing.

I think of frequent flyer programs combining two distinct things, rebates (earn and redeem) and status benefits (elite) into a similar program and they’re often conflated. To Aron you have one program driving the two key elements of loyalty — recognize and reward.

He shared the story of how United’s top tier elite level became 1K — they ran a database query for all of their 100,000 mile flyers and wanted to offer them additional recognition (“If an employee was only going to smile once a day, it should be for them”). So they created a system tag to identify these customers to employees, and the space used had room for only 2 characters — it was meant as an internal tag, not to be public with customers, but it eventually stuck.

It’s interesting to have a loyalty marketing executive serving in the role as chief executive of a major hotel chain. It makes me even more hopeful that Starwood stays independent — because it puts the Starwood Preferred Guest program front and center at the chain, and suggests there will be top level support for the program.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Is the first sentence breaking news (I.e., the CEO search is over) or am I missing some sort of clever pun?

  2. Interesting to learn more about Aaron. Glad to see it would logically follow SPG would be in capable hands; it’s probably the single most valuable asset Starwood as a corporation has. Others attempt to emulate it, but it’s always breaking exciting new ground and leaves others to catch up. It’s the single largest reason I’d struggle to see Starwood being bought out–their strongest asset would disappear into another brand were it swallowed, so it only make sense they stay independent or buy others.

  3. @Nathan I believe I was the first person to introduce Aron without the interim title at the event on Thursday. I can tell you that at least at that point an internal company email had not been sent on it. Aron told me they were no longer using ‘interim’ (“I am CEO until the next one”).

  4. Hi, Gary,

    Just want to say that you did a fantastic job interviewing him last week. Did not have a chance to say Hi to you during the conference. But I have been reading and enjoying your blog for a long time. Good stuff.

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