CRM Implementation in the Hotel Industry:

Customer Relationship Management can be defined as the process of managing customer relations in an organized and customer oriented manner¹. The aim of the customer relationship management is to handle the “moment of truth” or the moments of crisis that customer face while dealing with the organization and its stakeholders. ²

In the Hotel industry where the revenues of the organization are highly customer oriented there has to be a high level of customer relationship management that allows the organization a chance to get ahead of its peers and thus gain an advantage in this customer oriented industry. ³

There are certain points where there is a direct contact between the organization and the customers and these are known as ‘Touch Points’ in CRM. The importance of these points cannot be understated as they are the points where there is a direct interaction and they provide valuable input to the organization. ⁴ The data that these points provide to the organization can be used in various other processes in the organization where they can act as the difference between success and failure. This can be done with the help of technology and the aim is that whenever there is a customer interface with any of those processes they are able to use that information in servicing the guest in a most efficient manner.  And thus by doing this the organization can be sure of a good result at the end of the year. ⁵

Earlier CRM used to be called Customer Service and this was a concept that many organizations in the Hotel industry used to follow religiously and hence the onset of customer relationship management cannot be a very new and unique concept to a lot of them. ⁶ Many organizations have been following an unstructured form of CRM with the old narrowed down focus on serving the customer well and in an 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. ⁷

There are certain vehicles of CRM that have to be used by the hotels to attain the perfect CRM. There are a few steps that have to be followed the first step includes the identification of all the ‘vehicles’ that can be used to create a better customer relationship management scenario for the organization. ^{8, 9} the second step in the process shall be to integrate the various vehicles that have been identified in the previous step and then to bringing them together to create a useful and highly successful customer relationship model. ¹⁰

There are various vehicles that can be used by the hotel industry to create a better customer relationship management model for the organizations in the hotel industry.

Vehicles for data capture:

The first step of the implementation of the hotel industry is to create vehicles for capturing the data that is out there. There is a lot of data that the industry has to process. ¹¹ This is where the following vehicles come into picture

Field selling:

The first category of the data collection vehicle for a proper implementation for CRM in the hotel industry is field selling. It happen when there is a sales group or a marketing executive of the hotel calls up a corporate and informs them about the hotel. It includes the concept of prospecting which means searching and seeking for new customers. The current accounts are one of the best sources to uncover new business that is within these current accounts, as they harbor many sources of untapped business potential. The current account provides the hotels with leads and referrals. Leads can be defined as prospective customers that have not been contacted yet for usage of the services provided by the organization. While referrals can be defined as the new found knowledge of new prospective customers.  Field selling has been considered as one of the most important vehicle for the CRM function as the initiative is on the part of the hotel to contact the prospective guest. ¹²

Loyalty programs:

The second vehicle for a proper CRM implementation in the data collection stage for an organization in the hotel industry is to create a very unique and useful loyalty program for its customers. The program should be such that it encourages the customers to come back again and also make them loyal promotes of the organization. Although this can be primarily done by providing good services, but in the hotel industry loyalty programs to play an important role.

The aim of these programs is to make the customer feel rewarded for even the money that they have themselves spent. CRM is all about making the customer feel special and a successful implementation of the strategy would require such a program where each and every penny that the customer spends is utilized to create loyalty point for them which can then be used to buy more services from the hotel at discounted rates or for free even at times. By doing this the hotel can sometimes generate additional revenues then they would normally do and also make a very loyal and satisfied customer for the future.

Distribution Points/ Central Reservation System:

The third and probably one of the most important vehicles is the distribution point for the beginning of the experience of the customer. This point is the place where data regarding the satisfaction of the customer can be very easily collected. The customer when creating a booking should be allowed to be stress free and should feel that the oncoming experience at the establishment shall be satisfying. If this vehicle is not correctly managed then the customer shall create a negative image of the establishment even before he arrives there. Thus this is too an important part of a successful implementation of CRM in the hotel industry. ¹⁹ The data that is collected from this step can be analyzed for any changes that have to be made in the operations of the reservation or even the functioning of the organization as a whole. Thus this step should never be underrated in such a customer oriented industry.

World Wide Web:

We live in a digital age. The World Wide Web has come a long way in the past few years and this gives a very important and useful opportunity for the CRM program implementation. The web can be used for a lot of purposes but for a successful implementation of a CRM program it can work as very good corrector of sorts²⁰. The organization can easily manage the data that it derives from the visits on the Company’s website; however they should also focus on the other aspect of the web which is the social media. By tapping into the social media the organization can actually make amends in their CRM strategy based on the feedback that the organization has received on places other than the company website. This is a tough task but it can be very useful for the organization²¹.

Call Centers:

The last of the more popular vehicles that can be used for data collection are the call centers that the Hotel industry uses for various purposes ranging from customer reservations to customer grievances and this can be used as a platform to create a very satisfying customer relationship management platform where the problems of the customers are also stored and processed and this allows the organization to find out any flaws in their CRM systems and they are able to make the necessary changes to be able to serve the customer ins a more efficient and satisfying manner²².

Thus it can be said that not even one vehicle can be ignored for the proper implementation of a CRM system in an organization in the Hotel industry.

Steps in CRM implementation process:

The implementation of the Customer Relationship Management basically involves two steps which are briefly described as follows.

First Step:

The initial step in the process of implementation is for the internal customers which basically involves creation of awareness amongst them regarding the concept of CRM in itself the advantages and disadvantages which are associated with the implementation of Customer Relationship manager as function on a whole²³. Once the internal customers become aware of the concept and are well versed with the pros and cons that are related with the implementation of the entire function then the internal customers are endowed with further training in their individual basic function and the extent of customer relationship management within that particular function of theirs. This is done so that they can be able to handle the guest in much better manner which is much more customer friendly .Also the internal customers are trained in such a manner that they are well aware about the guest who is to visit and moreover are also aware about the background of guest. The advantage of such preparation is that when he or she interacts with the guest they can have a fine and interactive conversation with the guest or in other words we can say that he or she can have an involving conversation with guest which could be of interest to him²⁴. The interaction with the guest could be anything ranging from formal to informal and not necessarily related to his stay in the hotel. Mostly it is advisable to have an informal conversation with the guest so as to have a friendly bond with the guest. The result of such a rapport could be that the guest would start to know the employee by his name and would like to get all his work done from the same employee .This is basically referred to as the customized selling in the hotel industry²⁵.

In the hotel industry we do not endow with separate or a special training for customer relationship management.

 For example: If there is any special promotional scheme for some particular property which is new or already established then the marketing team who are the creators of this promotional scheme place collectively all the aspects of this particular scheme and visibly spot out what the customer is looking forward to in this property and also the marketing team focuses on the fact that if possible any out of the ordinary arrangements could be done. Thus, the marketing team then concise the general manager who then decides what steps could be taken on the information so provided so as to lure the customers.

There is a famous saying that is followed in this industry which is “Nice to know and needs to know” .It emphasizes that it is essential for the all the employees to know about the certain promotional scheme which is running for a particular property  on the contrary there is no essentiality that the employees should be necessarily aware of all the aspects that are associated with the promotional scheme       because there is a possibility that all the aspects are not appropriate for their scope of work but they should be well versed with the issues that are associated or related to their scope of work²⁶.

Second Step:

The second step in the implementation of Customer Relationship Management involves the process of assimilating all the information which is gathered from various touch points that is field selling, loyalty programs, distribution points, World Wide Web and lastly call centers²⁷. It becomes essential to have a proper feedback or input that is desirable (taken in consideration the marketing point of view) from all the touch points which is usually in an unorganized manner so all the bits and pieces are taken together from all the touch points and are then organized so as to make the information precious which can be then used in delivering the exact product to a particular customer or in other words “the right product to the right customer”. All this requires a creation of data base and the usage of the same to create the perfect CRM atmosphere in the organization³⁰.

Thus it can be stated that by data collection in the right manner and then creation of an atmosphere of CRM the organizations in the Hotel Industry can be sure of a perfect CRM at their discretion.

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