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Conceptual framework of CRM in hotels

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  1. Abstract
  2. Origin of customer related management (CRM)
  3. A framework on the customer relationship management
  4. Status of customer relationship management in India
    1. The five strategies for practicing relationship marketing
  5. Organising Customer Relationship Management.
  6. Trends
    1. Consumer
    2. Products
    3. Technology
  7. Use of technology in CRM
    1. Sales force automation
    2. Customer service helpdesk
    3. Call centers
    4. Systems integration
  8. Personalising customer interaction
    1. Customer communities
    2. Personalization
  9. Developing customer insight
    1. Customer database
  10. The past, present and future of CRM
  11. The hospitality industry
    1. The hospitality industry and CRM
  12. How other industries can profit from the CRM experience of the hospitality industry
  13. Conclusion

Until recent years, relationship management has been largely ignored by most industries outside the service sector. Classical marketing theory and practice has focused on customer acquisition rather than customer retention. However, due to the intrinsic nature of the service industry, customer relationships are critical to ensure customer loyalty. This is especially true of the hospitality industry, where relationships create more value for the customer than factors like price and product features, and therefore enhances the lifetime value of the customer to the organization. The leading hotel brands have always made the effort to go beyond customer satisfaction and ensure value through relationships rather than transactions, resulting in high levels of customer delight and subsequently, loyalty.

Traditionally, strategies for growth in revenue, branding, positioning and profitability have all been developed with the primary objective of increasing market share through a focus on customer acquisition rather than the consolidation of existing customer relationships. There has also been a belief among most organizations that since their organizations are not in direct contact with the eventual consumer, the customer relationship is not directly relevant to increasing market share; the equity and positioning of the brand will lead to greater market share.

While this approach has its merits, there is a realization today that customer retention is more profitable than customer acquisition.

It is also being increasingly recognized that loyal customers buy more often and more per transaction, pay premiums more willingly and are more likely to recommend the product or service to others.

These findings recognize the philosophy of the service industry, in particular, the hospitality industry, which has traditionally followed the principles of customer relationship management.

[...] Effective CRM goes beyond service; it involves implementing systems and processes to ensure that the marketing process promises, builds an environment for effective delivery, and finally delivery the promise in a manner that exceeds the customer's expectation, thus adding value and building the relationship All employees are involved in initiating and building relationships with customers: relationship building is not restricted to sales and marketing personnel. Sometimes customer contact employees may initiate the relationship The relationship goes beyond databases and customer preferences: It involves the use of this information to not only target customers with appropriate product, but also to create value for the customer through customization It is important to be consistent in both the service offering as well as the service delivery in order to build the relationship. [...]

[...] The key to CRM in the hospitality industry is the presence of satisfiers as defined earlier. The tangible elements of the hospitality product are manifested in the core benefits and hygiene factors, which are necessary conditions in order to eliminate customer dissatisfaction. But it is really the satisfiers that create value for the customer. Satisfiers are often intangible in nature and can be critical in building relationships and loyalty. The tangible elements can often be duplicated by competition, and do not sustain competitive advantage over other hotel brands. [...]

[...] And, this process needs to be managed most efficiently for the best of results. Customer relationship management is a comprehensive sales and marketing approach to building long-term customer relationship and improving business performance. Gathering all the information about customers helps the company to develop customer insight and enhance customer interaction. Technology tools and systems such as customer database, electronic point of sale, sales force automation, customer service helpdesk, call center, etc. help in establishing customer relationship. Also, integration of these CRM systems with back-end systems such as ERP helps in offering [...]

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