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

Sales Credit
Call center Security Operations
agent Agent
 Database

Call Sales Securit Credit Operati

Centre Agent y Agent ons
Guest Recognition