Brand has to be at the heart of your business to succeed, says former CEO of hotels group

Brand has to be at the core of your business and “stand for something” in today’s fast-moving digital world, says the former Chief Executive of the InterContinental Hotels (IHG) Group.

Speaking at a Vital Topics debate on global branding, Richard Solomons, who retired from the company this summer after six years at the helm and 25 years with the business, said it was essential to have absolute clarity in terms of what your business was about.

“It is about understanding how you create value and having a long-term plan you can then deliver against. As a business IHG floated on the stock exchange in 2003 and has had a consistent story ever since and had long-term investors. It is about creating an environment where every member of staff thinks about the brand in every decision they make.”

Solomons, an alumnus of the University of Manchester, said the way to instil such a culture was to talk as much as possible about the brand. “You have to explain to everyone in the organisation over and over again what you are about.”

He added that brands today have become increasingly associated with experiences. “Brands have become experiential and IHG was ahead of the game in this regard. We did a tonne of work around what matters to the customer and making sure the brand was clearly defined. We put brand and customer understanding at the heart of the business. That is easy to say but much harder to do.”

Digital challenge
In a complex market with multiple transaction channels, Solomons said a lot of people want the simplicity of one click decision-making. “That has become important in the marketplace and having a digital tool that ties all your brands together is really important.”

Asked specifically about the challenges posed by online aggregators to established brands in the travel and leisure industry, Solomons said engendering loyalty in customers was key.

Although aggregators have come into the market fast, he said at IHG what was important was what mattered to its own customers. “When you drill down you find that people who book online are price-sensitive leisure travellers who are not loyal, so there is no point trying to communicate with them. The trick is how to get loyal customers to pay direct. That is where the loyalty programme comes in and IHG was the first hotel group to introduce such a programme.”

Solomons claimed that while aggregators will tell you that they are cheaper, they are not. “They might be more convenient to use but they are not cheaper,” he added. 

Chinese growth
Under Solomons’ tenure IHG was particularly successful at expanding its brands, which include Crowne Plaza and Holiday Inn, into the Chinese market.

He said the key to success in China was to invest in a whole new digital infrastructure and take a long-term view. “IHG had flat profits in China for 10 years but now has a fast-growing business there. It was a very long-term game. The company first launched in China in 1984 and by 2005 had 25 hotels. Today it has 300 with another 300 in the pipeline. China is an unbelievable market, nowhere is moving faster. It is a very demanding market but also very rewarding if you get it right.”

Solomons was interviewed on stage by Fiona Hunt, board director at MediaCom North Group.

Vital Topics is kindly supported by KPMG