CRM in Hospitality Industries

Question: You are to identify and develop a research paper on a relevant CRM topic. You may choose any important topic under the CRM umbrella for your research. Relevant inputs for your paper can be gathered from published sources, interviews with experts, survey research, and the Internet. Possible topics include: Answer: Introduction: Aim of this research is to study the relevance of the application of Customer Relationship Management in hospitality industries. This research also provide the information based on proper study which essential for understanding CRM uses, due to which hospitality industry can serve in better and improved way to its customers. In hospitality industry customer satisfaction and maintaining good relationship is very vital part for getting success in business. During the research it observed that there are numerous literatures on the CRM applications importance and our study is based on rationale of researching CRM implications and benefit achieved from it. Regarding to the research criteria and its context appropriate research method has been selected. The research includes appropriate data from the hotels and to collect the primary data semi-structured interviews conducted from hotel managers and their staff and are also supported by secondary material. To analyze the collected data qualitative data analysis technique is used. The research observed that in the success and evaluation of hotel industries, traditional CRM forms has been essential factors and lead towards new renovation but on the other hand the new facts shows that with the help of eCRM, the hospitality industry gets global reach and marketing will be possible globally at a destination. eCRM introduces the advance culture in hospitality business and reach towards customers with computer and communication technologies (Chandra, Satish and Strickland, 2004). Competitive advantage will be achieved one over other by providing, managing and driving CRM in different ways and hence it is worth to research on this in depth. Rationale for Research: When starting any research based study it is essential to consider fundamental reasons serving behind conducting the study and this approach gives aim to the research project or that which is required to be researched. For this research proposal undertaking the research into CRM in hospitality industry is very much important and this influences the research trust. Understanding the CRM concept and studying its implementation is important for increasing the hospitality sector importance and increasing its demand and of course important for the understanding appropriate areas and enhancing and enlarging hospitality sector. Hence, the research project undertaking on CRM will not only benefit the particular industry and place where research is carried out in order to show new insights of hotel management and aim for the future (Bitner, 1990). Many of the hospitality industry around the world are successful just because of practicing and managing good customer relationship. It is not the case that only traditional CRM play important role in evaluation and success of hospitality industry but the another concept which is eCRM contributed similarly and from this approach computer and communication technologies are used and it will achieve internationalization in hospitality industry. As hotels can contact with their international customer by using new technology and customers can also find the suitable hotel for them. Hence it is important to research the right way of delivering and managing the CRM effort in hospitality and make it different. Literature Review: This Customer Relationship Management concepts is very magnificent as it swept the business world in nineteenth century, the concepts ensures that every businesses it may be small or large would interacted with their customer based in the changing ways and environment of businesses (Harvey, 1998). But after short period of its establishment it became an unwieldy process that means the process was better in terms of theory but not very impressive while it comes to practice in actual field due to various reasons. First and very important reason among all was it was not so easy to track all the records and keep those high volume records accurately and moreover that constantly upgrade those records (Deery, Iverson and Walsh, 2002). Today's business environment is very complex and hence only installing the software and integrating those software packages is not sufficient to implement successful CRM strategy and support CRM processes. For an effective and efficient CRM policy a holistic approach taken towards CRM is important. This approach includes training the employees, modifying the business processes which are based on customers needs and need to adopt relevant IT-systems, including software and hardware (Peccei and Rosenthal, 2001). By using those IT services is helpful in enabling the business sectors to follow its CRM strategy. The services provided by CRM can even redundant in terms if the acquisition of the CRM software licenses or hardware licenses. Now we will start talking about the answer of question which is going to be researched here that is applications in hospitality industry. According to the hotel industry CRM is simply define as a process of managing relation with the customer in an organized way as well as aiming to manage each Moment Of Truth which is experienced by customer (Boxall and Purcell, 2003). The main topic of consideration is also about the customer retention in hotel industry. In CRM language Touch Points are those points regarding to hotel industry where come in direct contact with the customer (Senker, 1995). Such contact points are important considerably for making direct interaction with customer and then provide valuable input to the hotel. The input provided by the customer has been captured as it becomes information and it can be used during various processes within the hotel (Campbell et al, 1993). This is being achieved with the help of technology and the aim is that wherever there is a customer interface with any of those processes and these processes further used that information for servicing the guest in most efficiently and as they required. Recent research evidence: A large series of studies conducted on word of mouth effects on hospitality industry in Sydney hotels and it is also illustrated that how customer values are varied through acquisition modes. Customers can be comparing on acquisition mode on three dimensions and that are rate of recommendation, retention and spending. We used qualitative research technique where 145 respondents were interviewed and among those 40% claimed that they chose particular hotel for vacations or for visit or for different purpose on the basis of recommendation, 18% choose the hotel by their advertising, 22% are due to the personal discovery and remaining people that is 20% choose particular hotel on the basis of other reasons. Certain factors are there which may drive customers to switch from particular organization and that are failure occur in maintaining core services such as mistake making during service providing, errors in billing, service catastrophe and so on. Applications After getting some finding from the research it is also important to find that how and where we can apply these finding. First in terms of customer retention it is observed that their benefits have been overstated. In the hospitality industries, managers need market research for their field in order to explain the customer responses on Reichhelds six claims (Huang, 2008). When it is observed that researches are spent on retention, then it is better to target them on the basis of complaints and on any other possible dimension (Rose, 1994). It is indicated from the research acquisition that the customers acquired by referral are superior to those acquired by advertising and promotion. The customers hardest to recruit are appear to be the most valuable customer base and it is the problem faced by hospitality sector (Babber and Koufteros, 2008). Hence the resources can be used to boost the advertising but it is less easy to expand referrals. What can managers do to increase the skills of customer service? Here we will discuss about the managers role in the hospitality industry in terms of increasing, shaping and developing the skills of employees. Manager can encounter certain problems during the management of customer services such as how they can direct, control and monitor customer service interaction without disturbing them (Cook and Macaulay, 1997). Service managers must make various design decisions when managing or improving service processes of customers. It is also suggested from some studies that there are certain choices in front of managers which they can choose to follow strategy of creating customer encounters and relationships (Holland and Baird, 1968). The latter involve considerably more efforts at building longer term interaction with clients and also keeping more trust worthy environment in performance skills of staff. In this section we will look at the use of standardized approaches to deliver customer services against the empowerment of employee approaches. The h uman resource practices have been reviewed which can be used within industries to instill and develop key customer service skills among staff (Humphreys, 1996). Management Control: Standardization versus empowerment It is the critical task for the manager to make decision on making the services standardized or using the more flexible and empowered approach (Winsted, 2000). The hospitality industries considering to cut the costs of customer service delivery, there have been constant pressures on building more standardize services in less time period. There are various examples take McDonalds chain, they reduced the individual treatment of customer expectations and also try to provide some semblance of personal service. Standardized services are often based on highly prescribed standard operating procedures which have to be learned and followed by the hotel staff. Such services are narrow and highly repetitive too (Brown and Sulzer-Azaroff, 1994). Standardization is the route favored by most of the hospitality industry. In this sector communication with customers are well organized manner with clear protocol for opening and concluding calls (Goodwin and Smith, 1990). To build trust of the customers and attracting them some strategies are performed by hotel organizations and that are, segmenting the market for matching customers needs with firm profile, customer database has been managed by using effective tiering of services, deliver value and satisfaction to all customers, develop trust in brand and install effective complaint handling and recovery procedures. Customer Retention in hospitality industry: To achieve full profit potential of each client or customer relationship has to be basic objective of hospitality sector. Though hotels are using conservative estimate, still the gap between most hotels current and full potential performance is enormous by all means. The profit has been achieved by retaining the customer base because only increasing 5% customer retention it will improve the profitability in net present values from 20% to 85% and hence in every industry sector customer retention is very important (Leslie and Russell, 2006). It is also observed through research that keeping existing customers is vital because to obtain new customers 5 to 10 times more cost will be required. Customer Data Integration: In CRM data management process is used in order to consolidate all customers and prospect data in order to create single accurate customers view is called Customer Data Integration (Monod, 1992). All hospitality sectors point of customer interaction should get access to an accurate and current customer centric view and under this concept to distribute the data timely manner is used for points of interaction Problems: There are several problem encounters while applying this system and that are difference between the data capturing and storing process, another one is disparateness in between databases where every database which is supported in a business case is developed in isolation. Problem encountered due to real-time customer interaction. Data latency is another problem which means as time passes data ageing is occurred due to batch processing (Wray-Bliss, 2001). Lack of standard is another process where no standard implies that data has to be integrated at point of contact. System data are compared by using imperfect matching techniques which lead towards data inaccuracy. Requirements of CDI: While using this data integration process it is requires enabling technology in order to manage initial and ongoing data integration efforts, the processes also require the technology used have capability of linking the customers, hotel-wide adoption of technology and customer linkage have to perform. Steps of CDI to indentify Touch Points: In CRMs language Touch Points are those points regarding to hotel industry where come in direct contact with the customer. Here any area where interaction has been occurring between hotels and their customers or prospect is the touch point. The interaction mediums are different such as human to human interaction can occur, interacting human to human but with the use of web technology i.e. communicating with customer through video chatting, human to technology interaction i.e. interacting with customer through computer telephony and next interaction can be done though technology to technology and web transaction is perfect example for this (Campbell et al, 1993). CRM model of trust and commitment in hospitality industry: Figure: Trust and commitment model It is the fact that when customer is satisfied with the services provided by the hotel and have full faith on their services and commitment then only they will loyal towards that hotel organization. And all the factors given in the above model has to be achieved by the organization in order to get trust and commitment from the customers. If organization keeps their promises made in the advertisements of prospects the customers will definitely want to come again and again over there with family and friends and also recommend their friend about the hotels but it will act vice versa if promises has not being kept (Rodie and Kleine, 2000). The latter involve considerably more efforts at building longer term interaction with clients and also keeping more trust worthy environment in performance skills of staff. To build trust of the customers and attracting them some strategies are performed by hotel organizations and that are, segmenting the market for matching customers needs with firm profile (Gallaghan and Thompson, 2002), customer database has been managed by using effective tiering of services, deliver value and satisfaction to all customers, develop trust in brand and install effective complaint handling and recovery procedures. There are certain factors which may drive customers to switch from particular organization and that are failure occur in maintaining core services such as mistake making during service providing, errors in billing, service catastrophe and so on. Another possibility is service encounter failures such as uncaring behavior, impoliteness, unresponsiveness or unknowledgeable behavior by hotel staff. Conclusion: This report will discuss how customer relationship management is important in hospitality industry and it is also shown that show retaining the customer is essential and impact of customer retention. Competitive advantage will be achieved one over other by providing, managing and driving CRM in different ways and hence it is worth to research on this in depth. The customers having trust on particular organization and satisfied from the services provided by that organization can only can loyal towards the organization. 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