When it comes to brand loyalty, I am a tough customer. Perhaps because brand strategy is what I do, but I am generally skeptical of the promises brands make to me. I am incredibly picky about the brands I am loyal to, and can count on one hand the brands that I truly love. One of them is Starwood and in particular, its Preferred Guest sub-brand.
So I, like millions of others, am anxious to learn what will happen to my beloved brand when it merges with Marriott later this year. And as a brand strategist who has spent years handling brand transitions, I see the writing on the walls.
Starwood has already lost its differentiation. For years, Starwood represented a very different type of travel loyalty program. Unlike airlines and other hotel programs, Starwood offered no black-out dates. As a brand loyalist, I could go on vacation over Christmas and not pay ridiculous mark-up fees. I could decide last minute that I wanted to take a weekend getaway. I could share my points with others. But this year, Starwood instituted black-out dates, looking more and more like any travel loyalty program out there. You have the points, but you just can’t use them.
The AmEx relationship is in jeopardy. As Marriott looks to its merger, it is evaluating its credit card relationship with American express and is seriously considering transferring the card to JP Morgan Chase. Much has been written about the financial impact this will have on American Express, but very few are discussing the impact it will have on the Starwood brand cache. If you are the company you keep; then your co-brand relationships are essential to your image. American Express represents and elite and exclusive image. The co-branded relationship between American Express and Starwood strengthens the allure of the program. It conjures up images of free trips to the St. Regis and W’s worldwide.
The user base will be too broad. For Starwood brand loyalists, perhaps one of the biggest questions surrounding the merger is the new combined size of the user base. On the surface, customers are asking “Will the program become too large that I can’t get a hotel room when and where I want?” But brands are all about emotional projection. Behind that functional question is a very emotional one. “What will being a part of the program say about me?” Countless times I have gone to dinner with friends when the bill comes and we all put down our Starwood credit cards. Behind the chuckles are both a wink and a nod. We get it. We are part of an inner circle. We know the value of the card. The power of the SPG brand is the like-mindedness of its customers. With the merger of Marriott, that will be diluted significantly.
With so many changes already in place and new ones on the way, perhaps the question we should be asking isn’t whether SPG will survive, but whether it has already died.