Marriott International is a global corporation, with 13 brands of hotels and 2,400 total properties in 70 countries. Marriott's global customers are Fortune 100 firms that only want to speak to one Marriott representative. This customer expectation drove the creation of Marriott's Alliance Account program in 1997. The Alliance Account program, with 12 account directors, is now responsible for a portfolio of 30+ accounts that generate more than $800 million of Marriott's total annual business. While alliance account directors are critical, though, they comprise only one half of Marriott's marketing equation.
Marriott employees around the world comprise the other half. When alliance account directors devise a business solution for a global account, they depend on Marriott resources to help implement it. These resources might be national or regional sales leaders, subject-matter experts in information technology (IT), revenue management, operations, telecommunications, finance, or even furniture rental.
While creating the Alliance Account program, Marriott faced the question many organizations face: How can we coordinate the activities of hundreds of employees around the world to ensure that any value-added implementation is transparent to the customer? More critically, how do we get them to devote their time to something for which they will receive no direct compensation?
Steve Richard, VP for alliance accounts, says global cross-functional teams offer an ongoing challenge at Marriott, but the firm has successfully leveraged Marriott's many competencies to serve alliance accounts. An alliance account director will start working with a given customer. She will immerse herself in the account's business challenges and then will start thinking about offering a business solution. She will determine what sort of resources she needs and will request that appropriate Marriott people—anywhere from 5 to 50—meet, sometimes in person, sometimes on the phone. At the meeting she presents the solution she's created, provides the value propositions for both Marriott and the account, and asks for the group's suggestions and assistance.
Richard says that the alliance account director is the team leader, responsible for generating excitement and creating a sense of urgency—what we sometimes call a "burning platform"—for all team members. In most cases, Richard says, employees will do what they can to help. And while they do not receive direct compensation, by implementing the solution, they make the Marriott organization stronger and more nimble and, in many cases, generate more business for their region, market, and/or area of expertise.
Iris Riemann, based in Frankfurt, Germany, a Marriott International alliance account director since 1999, is a perfect example. She serves two global accounts, one of which is Siemens, the $75-billion-dollar electrical engineering and electronics firm. Siemens is based in Munich but has a presence in 190 countries; it has 250,000 travelers a year, almost half based in Germany. These facts create interesting challenges for a global account manager.
Before 1998, when Marriott named Siemens an alliance account, the two firms' relationship was very fragmented, very local—almost nonexistent. In 1997, Siemens took the first step in centralizing its travel management, creating its Corporate Mobility Services (CMS). At the same time, though, Siemens maintained its country travel groups. These groups, each with differing cultural, country, and performance-management standards, report to the Siemens country headquarters, with only a dotted-line relationship to Siemens CMS. So even if Siemens corporate agreed to a special travel arrangement, the country travel groups did not have to comply with that agreement.
When Riemann was named Marriott alliance account director for Siemens, she immediately immersed herself in Siemens' business challenges. In 1998 Marriott had offered Siemens CMS centralized pricing for 1999. When Riemann took over the same year, she pulled together a cross-functional Marriott account team to support the German Siemens travel managers and meeting planners it could locate. Later that year Riemann met with the Siemens' country travel groups, presenting how she and Marriott might help support their travel policies and lower their travel and lodging costs. As she helped the various country groups, Riemann began to act as a link between those travel teams and Siemens' CMS. She found herself providing both groups with information and resources they lacked. All of Siemens travel groups, for example, were glad to receive regular reports listing spend/room night figures for all their travelers.
Centralized pricing and the dedicated Marriott account team worked so well that in late 1999 Riemann and her team extended the relationship with Siemens travel managers in other countries. Riemann contacted Siemens' travel management in the United States, in the United Kingdom, and also in Hong Kong, Singapore and Beijing, all major Siemens markets. Riemann also appointed Marriott account team leaders in these locations to build up local Siemens account teams. Local account teams included alliance account members, market sales leaders, sales leaders of key Marriott hotels, and various subject matter experts. Overall and local team membership changes as Siemens' business challenges change. The most critical addition to the Siemens team was Karl Kilburg, senior vice president for Marriott in Continental Europe, who accepted the role as the Marriott Focused Executive to Siemens globally. Kilburg helped Marriott escalate the relationship to a strategic level, sponsoring a multimillion-dollar joint technical venture between Marriott and Siemens.
Marriott also invited Siemens travel managers to Marriott International headquarters in Washington, D.C., where they met with members of the Siemens account teams, Marriott HQ subject-matter experts, and senior executives representing sales, marketing, and other areas critical to the account. These travel managers appreciated both the ease of doing business with Marriott and Marriott's ability to support their e-business approach within travel management. Riemann and Marriott had set up electronically bookable room allocations through Siemens' TravelNet. Riemann and her team—now numbering between 20 and 30—actively support Siemens Travel Management by increasing use and acceptance of TravelNet. Dedicated Siemens room allocations currently apply only to 15 German hotels, but Marriott will soon roll it out in other European countries where Siemens uses TravelNet.
Since early 2001, Riemann and her team have been adding individual team members in those countries where Marriott has only a few hotels (Poland, Denmark, Canada, etc.). With these teams in place, and with Marriott's ability to support a Global Account Program, Marriott has become Siemens' Corporate Travel Management's "favorite hotel supplier," and is now (since 2001) Siemens' No. 1 hotel company in lodging expenditures.
What has Siemens received from the relationship? Marriott International tracks its alliance accounts average spend/room night. In 2000–2001, the average Siemens traveler spend/room night decreased by $8 from the previous year. (With about 220,000 Siemens room nights per year, total savings comes to $1.76 million per year.) And the Marriott-Siemens high-tech joint venture, bent on bringing the latest web technology to the business traveler, may offer the greatest benefit of all. It is an offering Siemens and Marriott can both use and sell to other hotels.
What value has Marriott received? In 1998, Siemens' listed only 52 Marriott hotels in its preferred hotel directory. In 2000 that number had jumped to 204. In 1998 Marriott sold 100,000 room nights to Siemens. In 2000 that number surged by 80 percent, to 180,000. Since Marriott started treating Siemens as an alliance account, Siemens' annual business with Marriott has gone from $7+ million/year in 1998 to about $17+ million/year in 2001, more than a 140 percent increase.
Reimann is clear that this sales leap would have been impossible without the coordinated and dedicated efforts of Marriott Siemens account teams around the world. Reimann created the initial value propositions and sense of urgency for serving Siemens. She then worked with the teams to refine and deliver those propositions. She managed the communication with and coordination of her account team members.
The most successful account management programs are based on data— financial and customer-based— and are committed to continuous improvement.
She calls these team members her "volunteer army" and it is an apt phrase—even though the vast majority of team members do not report to her. Marriott has continually shown itself able to align around the needs of its largest accounts—a rare and, as we have seen, a very profitable skill.
Marriott has successfully made its Alliance Account program a business initiative for critical customers and broken down divisional barriers, just as Knauf, Minnesota Power, and Honeywell did. Firms that successfully implement strategic account management usually need to align internal relationships and processes before, during, and after the program's launch. In our experience, the most successful account management programs are based on data—financial and customer-based—and are committed to continuous improvement.