Introduction of Customer Relationship Management.

Customer relationship management (CRM) is a broadly recognized, widely-implemented strategy for managing a companys interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management denotes a company-wide business strategy embracing all client-facing departments and even beyond. When an implementation is effective, people, processes, and technology work together to increase profitability, and reduce operational costs. Phases of CRM The three phases in which CRM help to support the relationship between a business and its customers are, to:

Acquire: a CRM can help a business in acquiring new customers through excellent contact management, direct marketing, selling and fulfillment. Enhance: a web-enabled CRM combined with customer service tools offers customers excellent service from a team of trained and skilled sales and service specialists, which offers customers the convenience of one-stop shopping. Retain: CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives.

Background of the company

Hilton Worldwide (formerly, Hilton Hotels Corporation) is a global hospitality company. It is owned by the Blackstone Group, a private equity firm. As of January 2009 Hilton brands encompass 3,200 hotels with 545,000 rooms in 77 countries. Hilton is ranked as the 43rd largest private company in the United States by Forbes. OnQ is the IT centrepiece of a two year old Hilton CRM strategy, officially known as Customers really matter. The strategy is pinned on the idea that employees with the clearer idea of who customers are and what their past Hilton experiences have been can engineer constant improvement.

Answer to questions. 1) What are the benefits and drawbacks of the OnQ system at Hilton? The benefits of the OnQ system at Hilton are: One of the benefits that OnQ system delivers to Hilton is customer satisfaction. Customer satisfaction is the most important element in business, so OnQ can help Hilton to get that by highlighting the problems or inconvenience that the customer faced. For example, if a guest has complained in the past about being dumped from an overbooked hotel and moved to another Hilton property, the system will highlight that history should the same situation come up, thus making it less likely a hotel will ask that customer to walk again. Also, it also establishes the value of a customer to Hilton based on personal history and on predictive modeling of the business the person is likely to do. The other benefit of the OnQ program is that it will help make customers feel more important. If a customer is to come in a hotel 1,000 miles away from the first one they stayed at, information about the person will still be right there at the reach of the desk clerk on duty. An obvious benefit would be the ability to offer customized products and services based on customer preferences i.e. business travelers would need internet access, dry cleaning, newspaper, conference room availability, etc. Like the article explains Hilton also has the ability to leverage their customer database through extranets to attract high volume corporate accounts. Before the systems deployment, just 2 of every 10 guests reservations could be matched to an existing profile. With OnQ, its matching 4.7 and it can be closer to 6 The drawbacks of the OnQ system at Hilton are: There is high risk in this strategy. Hilton needs to present its deep customer histories clearly enough that employees at the front desks, where turnover averages more than 100 percent a year can put it to use. The risk that they need to guard against is hitting a hotel staff with so much information, or doing it in such a disruptive way that it prevents employees from interacting with guests and making judgments.

2) What does Hilton have to do to create a competitive advantage through OnQ? Provide some examples The key to creating a competitive advantage with the OnQ system is expanding their customer profile database and to create a competitive advantage with the OnQ program, Hilton needs to have their desk workers treat the customer as if they are coming into their own house. They may even ask questions about why they are traveling, where they are traveling, and how long they are traveling to find out the objectives of the customer. Hence, for Hilton to tailor reservations to customer preferences they have to know their customer therefore they must remain diligent in accumulating customer information. With that information its important their employees be able to utilize the systems. Another competitive advantage may be derived from a cost savings standpoint. As the article mentions they have

been able to consolidate their call centers. These savings can be passed on to the customer through lower rates, or nicer amenities. 3) Is it possible to have too much information about a customer? Explain Yes it is possible to have information about a customer but having too much information about a customer may become a problem. As too much information is recorded on a customer, it may become more difficult to assimilate through all of the data in order to aide in decision making. There are certain things that should not be kept about a customer. For example, what do they do, how many members are there in their family etc.