Case Study: At Choice Hotels, a Check-In Consolidator is Key

For nearly a year, Choice Hotels has been running a special offer that rewards members of its Choice Privileges program with 50 extra points each time they check-in on Foursquare, Facebook, or Gowalla at more than 1,500 participating properties. By partnering with Topguest, Choice has been able to use LBS to build customer engagement without worrying about managing the infrastructure that a large-scale program requires. According to Daniel Guerzon, director of Choice Privileges Partnerships and Communication, check-in volume has continued to grow month over month since the program’s debut in December 2010.

How does your check-in program with Topguest actually work?
Members of our loyalty program, Choice Privileges, [who] get the Topguest app can earn [50] Choice Privilege points for one geo-check-in per day at selected Choice Hotels brands. Fifty points in and of itself is not going to get a redemption item — our minimum redemption items right now are actually priced at 8,000 points. We had magazines earlier in the year that were 2,000 points, [but] I think we’ve discontinued our magazines for the time being. Now, I think our cheapest redemption option is free hotel nights available at 8,000 points. Free nights are the No. 1 thing that all members of our program want. At 8,000 points, it would take a lot of check-ins. So ultimately, this [check-in program] is just meant to be a teaser engagement piece. [Customers say] “Hey, I can get a few more points here or there,” but ultimately you still need to stay to get a free night.

When we talk about ‘check-in,’ in the hotel business, people think that’s a physical check-in.

How did you decide which hotel properties to market the program at?
We wanted to test it without going to all of our properties. Choice has a large portfolio [with] over 5,000 properties in the U.S., over 6,000 worldwide. We wanted to see what the appetite was for this, in terms of [Choice Privileges] members, so we picked a couple of brands that we thought might be more suited toward travelers who might be a little more — I don’t know if internet savvy is the word, but technology savvy. I wouldn’t necessarily put Quality Inn in that bucket, but we wanted to also test it with another brand. When we talk about Cambria Suites and Comfort Suites, those are definitely brands where we think customers may be a little more business travel-like, and also may be a little more technology savvy, so we wanted to include those two brands. We included Quality as a counterbalance. There are probably somewhere around 1,500 [participating hotels].

How do customers know they need to download the Topguest app and check-in on a separate platform, like Foursquare, to earn points?
We’ve communicated via our own channels. We sent out a couple emails to users of those particular brands of hotels alerting them to the opportunity, but we did not send [emails] to users of other brands because we were not trying to make people shift from a brand that wasn’t offering this check-in [promotion] to a brand that was. So, if you are a user of one of the other eight brands then we didn’t promote it and didn’t tell you, necessarily, about this offer. It was not in the newsletter, for that purpose. We did not want to move people from one brand to another based on this. This was meant to build engagement with the brand they are already showing an affinity for.

When you talk about engagement, what does that mean to you?
We want them to interact with Choice and get more of our currency, hoping that acquisition of more currency will ultimately lead to a redemption, or at least a goal of redemption. If the goal is to make a redemption, then this check-in gets you a little closer to that goal. Maybe the thing that would put you over the top would be to stay another night, and that is then driving revenue. So, we’re hoping that by saying, “Hey, here’s another way to earn points,” it’s going to foster that engagement. That engagement building will ultimately, we hope, result in more paid stays in the hotels.

How did your partnership with Topguest first come about?
Topguest originally approached us and said, “Hey, we’d like to work with you guys and try something.” I think we ran into them at a conference, actually, so the conversations developed from there. They had already run a program with Priority Club, I believe, and they were interested in branching out and seeing what else could happen in the hotel space.

What challenges did you have in setting up the program?
To tell you the truth, one of the bigger obstacles internally was using the phrase “check-in.” When we talk about “check-in”, in the hotel business, people think that’s a physical check-in. Meaning, I’m checking-in to my room. If you’re talking to a different industry about this, like a restaurant or a gas station or a retailer, check-in has no other meaning, internally or externally. [When you say] “I did a check-in at Starbucks,” it’s pretty obvious what that is. But if you were to say, “I did a check-in at Comfort Suites,” what does that mean to you? Does that mean you’ve checked into a room, or you did this? In the hotel [industry], using the phrase “check-in” is complicated, and it’s unique to this industry.

So, how have you gotten around that?
We’ve really just had to spend a lot of time on education internally, to make sure we are speaking with people and telling them we are doing a program about geo-check-ins, so there wasn’t a misunderstanding [and they knew] it wasn’t some type of mobile check-in to your room. It was an education piece, more internally than externally. I think there were a few customer calls about what it meant, but it was more so to make sure that everybody internally understood at all levels of our organization — at our call centers, at the hotels, the team here, in terms of management — that check-ins in this case are not like check-ins at the front desk.

What is the benefit in partnering with Topguest, versus managing a program like this on your own?
I think it’s like the case with other partnerships, when utilizing a consolidator of a particular good or service is simpler and more efficient than trying to set up a lot of one-off relationships. For us, Topguest brings that to the table. [Our hotels don’t] have to do anything, because the fact is, we gave the folks at Topguest all of the coordinate information to load into their system to know exactly what the GPS locations for each of the hotels affected by this initiative were. They are building the infrastructural relationships with all the platforms, and then we only have to work through them, as opposed to reaching out [and forming] individual relationships with Foursquare, with Gowalla, with Facebook, and building and managing those relationships with each of the entities. There’s an efficiency of operation and a proven system. Topguest brought platform relationships and they brought a system that was already working, as opposed to us building something from scratch with multiple platforms, and then having to build technology or test technology to make sure it would work.

Now that the initiative has been going on for almost a year, what kind of results have you seen?
Results have been good in terms of engagement measured on the number of check-ins that we’ve seen. Check-in volume has grown from program launch through to date. People are going through the exercise of doing their check-ins when they have the opportunity. We know that some of them are just probably doing it while they’re driving to the hotel, but again, it’s putting us top of mind. It’s harder to measure from a dollar perspective, but we believe, from a subconscious level, in terms of building that engagement, it’s doing what we were hoping. The check-in volume continues to grow — we’ve seen an increase month over month — and that shows that more and more people are signing on to do it and those who have signed on continue to do it.

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This interview has been edited for length and clarity.