Comments on: Hyatt’s “random acts of generosity” – good idea or off target?

By: Paul Cohen

Paul Cohen — Mon, 29 Jun 2009 02:30:21 +0000

Disney did this with their “A Year of 1 Million Dreams”, and we loved it even though all we ever won were a couple of $5 pins. It did cause people to talk about the parks even when they went home but I have not seen on what it did to Disney bottom line. As far as rates go Hyatt will fill their rooms at the best prices they can get, I think they are trying to fill them earlier with frequent travelers.

By: Mike Pritchard

Mike Pritchard — Fri, 26 Jun 2009 05:13:11 +0000

Jaremy, it seems that the Economist is as skeptical as you and I. Randomness is just such a troubling idea in this context. The bumper sticker "Practice random acts of kindness and senseless acts of beauty" makes an odd statement to my mind, although to be honest it is the phrase "senseless acts of beauty" that really sets me off because I wonder what on earth it means, whereas "random acts of kindness" is easily understood. I think of people feeding a parking meter for someone else (alas no longer common with changes in meters), or paying for a meal at a restaurant for a couple who reminds the payer of themselves earlier in life. I don't have a problem with the idea of directing someone elsewhere when your business can't help. That seems to me to aim at creating a higher kind of satisfaction --- a customer whose needs are satisfied will look more favorably on your business in future. Self-serving? only in the same sense that we can argue about the motivations for altruism.

By: Jaremy

Jaremy — Tue, 23 Jun 2009 23:58:41 +0000

Mike- I think that at heart, the idea is not a bad one. When you go to a restaurant and get told “hey, this round’s on the house”, it certainly builds loyalty and gratitude. However, you’re absolutely right that any sort of publicity or policy just seems completely self-serving. And doing it in a completely randomized fashion wouldn’t make it any better – it would just make it seem even more coldly calculating.

The idea is an interesting meld of the oft-used pizza delivery policy (“If it’s not there in 30 minutes, it’s free”) with randomization in order to create loyalty. Unfortunately, the idea isn’t really revolutionary or unique enough to bring in a lot of newcomers – honestly, is a free drink or massage enough to make you spend an extra $30/night if you have already priced a similar hotel cheaper on Hotels.com? Random generousity is not enough incentive to cause individuals to switch hotels if the price is higher. Maybe if it’s the same.

I think the fewer people that know about Hyatt’s actions as policy, the better. Instead, they will just receive something free, be happy and maybe visit the chain more often in the future as a result. However, as soon as a friend reads off the NYT story, that illusion will be lost.

This reminds me a lot of the scene in Miracle on 34th Street where Gimball’s decides to make it company policy to direct any customer to their competitor’s stores as an act of goodwill. It’s not a bad idea in practice, but only so long as nobody knows that it’s a corporate scheme with only the bottom line in mind.