Customer Relationship Management (CRM) IN HOTEL INDUSTRY

What is Customer Relationship Management (CRM)?

• CRM entails all aspects of interaction a company has with its customer, whether it is sales or service related. It even uses technology to streamline processes that impact customer loyalty, service delivery and quality management.

• “Customer is the most important person for a business. He is not an interruption to our work but the purpose of it. He is not an outsider; he is a part of it. We are not doing him a favour; he is doing us a favour by giving us an opportunity to serve him.” (By Mahatma Gandhi)

• Generally speaking, the five needs of customers are:- (a) Service(b) Price(c) Quality(d) Action and(e) Appreciation

There are three parts of application architecture of CRM:

1. Operational - automation to the basic business processes (marketing, sales, service)

2. Analytical - support to analyze customer behavior, implements business intelligence alike technology

3. Co operational - ensures the contact with customers (phone, email, fax, web...)

Industry Definition• Abbey (1999) proposes a hotel industry in a primarily a service sector

emphasis in given on the role played by relationship marketing. You are nothing without our customers understanding that your organization exists for no other reasons than to meet customer needs and expectations. Its imperative is to develop proactive methods for understanding what customers like and dislike.

• In hospitality, each customer relationship has value and should be managed effectively. There is opportunity for repurchase and recommendation from each past customer. The administration of the information about this past guest and the effective integration of the information into frontline guest services programs is the challenge of CRM implementation.

Integration of customer information:• The process of extracting customer data from legacy systems (i.e., the

property management system) and integrating the entire database in the property that contains guest information is complex and time-consuming.

1.Customer profiling : Demographic and Psychographic information can be appended to a large percentage of the customer database. This is followed by the implementation of effective marketing programs to attract similar customers to build revenue.

2. Direct marketing :The utilization of the integrated customer information for direct marketing offers is the goldmine of any CRM effort. Highly profitable offers can provide business during slow periods. These offers can be communicated via mail or e-mail.

3.Best customer/extraordinary service : The Mecca of all is to understand if the most profitable customers are the most satisfied. This involves very detailed satisfaction analysis, combined with valid financial data about each customer – all appended to the customer database.

eCRM or Web based CRM• e-CRM application in hotel industry are straddling across business

functions to retain, capture and capitalize on customer data, i.e. integrating all aspects of business process and systems by keeping the customers as the core.

• e-CRM projects are no longer viewed as stand-alone implementations but are now being increasingly pursued in context of larger business objectives and core strategic agendas.

e-CRM Components in Hotel Industry• Sales functionality: Contact management profiles and history, account

management including activities, order entry, proposal generation• Sales management functionality: pipeline analysis (forecasting, sales cycle analysis,

temporary alignment and assignment, roll up and drill down reporting).• Telemarketing/Telesales functionality: call list assembly, auto dialing, scripting,

order taking.• Time management functionality: single user and group calendar/scheduling, e-mail• Customer service and support functionality: incident assignment, escalation,

tracking/reporting, problem management/resolution, order management/promising, warranty/contract management

• Marketing functionality: campaign management, opportunity management, web-based encyclopedia, configuration, market segmentation, lead generations/enhancement/tracking.

• Executive information functionality: extensive and easy-to-use reporting• ERP integration functionality: legacy systems, the web, third party external

information• Data synchronization functionality: mobile synchronization with multiple field

devices, enterprise synchronization with multiple databases/application servers• E-commerce functionality: manages procurement through EDI link and web-server

and includes B2B and B2C applications• Service support functionality: Worker orders, dispatching, real time information

transfer to field personnel via mobile technologies (Rmana & Somayajulu, 2005)

Customer Relationship Management Software for the

Hotel Industry Guest Ware is a unique Customer Relationship Management System (CRMS) designed specifically for the lodging industry to provide personalized guest recognition and exceptional service quality. Leading hotel management companies use Guest Ware to improve guest satisfaction, lower operating costs, build guest loyalty, and increase revenues.

CRM Success

ITC MAURYA SHERATON DEFINES CRM AS:• Customer Service is now more fashionably called Customer Relationship

Management. ITC Maurya Sheraton has been following an unstructured form of CRM with a narrow focus of serving the customer well and in a most efficient manner.

• The concept of Customer Relationship Management has a broader focus of not only serving the customer but also creating the customer and retaining him for measurable and substantial returns. CRM is a vast subject where the concept of one to one marketing is supported by Database Marketing.

• CRM process at ITC Maurya Sheraton has been divided in 2 steps:-1. Identification of all Customer Relationship management ‘vehicles’2. Integration of these Customer Relationship management ‘vehicles’ DATA CAPTURE VEHICLES Maurya Sheraton has identified 5 such vehicles (from

marketing point of view) which are also the touch points for the hotel in the process of managing its Customer Relationship. These vehicles are:-

• Field selling• Loyalty Programs• Distribution Points• Web• Call Centers

Field Selling• When a sales group or a marketing executive of the hotel makes a sales

call to a corporate, then it is called Field Selling.• Field Selling includes Prospecting which means searching and seeking for

new customers.• Field selling is considered the most important vehicle for the CRM function

as the initiative is on the part of the hotel to contact the prospective guest.

• The help of field selling, the executive is able to make a direct contact with the ‘link’, the administration person and is able to take the feedback on a continuous basis and helps to customize the offering.

Loyalty Programs• These programs are designed to reward the loyal guests of the hotel.• There are certain points attached to the number of rupees spent by the

guest. Therefore higher the amount of the bill, the higher will be the number of points attained by the guest. These points are credited to the account of each guest with the help of technology. These are called Loyalty points.

• Whenever after the first time that guest checks into the hotels, the guest history also affects the loyalty points. The higher the number of points, more loyal is the guest.

• The points can be redeemed by the guest for either free stays at the hotel or free gifts as listed by the hotel or free meals depending upon the number of points accumulated.

Distribution Points/ Central Reservation System

• A customer can simply make a call at the reservation centre to make a booking with the hotel. It sounds simple but it could get complex in case he does not receive the expected or the desired response.

• Maurya Sheraton sees this distribution point as an opportunity to establish CRM as the respondents at the reservation centre could turn a prospective customer into a ‘sale’ or could let go off the opportunity to do so by not being polite enough or not giving out the information as desired by the guest.

World Wide Web• The World Wide Web is part of the internet. It is a computerized,

interactive, multimedia system to import and/or access information world wide.

• In hospitality, there are several avenues that one can take up to set up a web site to share information and do business with a potential customer.

• The web gives a convenience and allows the access to information at any time, it is considered as one of the vehicles for CRM.

• Once it is entered in to the hotel’s data base the customer does not have to repeat his preference as they are automatically suggested by the reservation form on the net.

VALUE CHAIN OF CUSTOMER INTERACTION IN HOTEL INDUSTRY AND POSSIBLE BENEFITS OF e-crm

Call center Sales agent Security

Credit Agent Operations

Database

CallCentre

SalesAgent

Security

CreditAgent

Operations

Guest Recognition