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[Customer relationship management in hotel industry]

Submitted to Lovely Professional University

In partial fulfillment of the requirements for the award of degree of

BACHELOR OF BUSINESS ADMINISTRATION

Submitted by:

Group No___50_

Anuj kumar giri Roll No.46

Shohit Nanda Roll No.49

Raghav sethi Roll No.51

Shahil babbar Roll No.54

Project guide:

Mr. Abhay Tiwari

Sr. Lect.

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA

(2010)

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TO WHOMSOEVER IT MAY CONCERN

This is to certify that the project report titled “customer relationship

management in hotel industry” carried out by Mr. ANUJ KUMAR GIRI,

SOHIT NANDA, RAGHAV SETHI AND SHAHIL BABBAR have been

accomplished under my guidance & supervision as a duly registered BBA hons.

student of the Lovely Professional University, Phagwara. This project is being

submitted by them in the partial fulfillment of the requirements for the award of

the Bachelor of Business Administration from Lovely Professional University.

Their dissertation represents original work and is worthy of consideration for the

award of the degree of bachelor of Business Administration.

___________________________________

(Name & Signature of the Faculty Advisor)

Date:

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ACKNOWLEGDEMENT

We would like to express my gratitude to all those who gave me the possibilities to

complete this capstone project . I want to thank the department of BBA (HONS.)

of LOVELY PROFESSIONAL UNIVERSITY for giving me guideline to

commence this project and to do the necessary Research work. I have further more thank

to our project guide MR. ABHAY TIWARI (SR. LECT.) who gave guideline and

encouraged us to go ahead with our capstone project.

We are deeply indebted to all whose help, stimulating suggestions

and encouragement helped us in all the time giving me instructions and making of this

capstone project.

Thank you.

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INDEX

S.No Chapter

1 1.Introduction to Subject ………………………………………..5 - 7

What is CRM?

2. Review of literature ……………………………………… 8- 21

-Advances in 1990

-Integration of customer information.

-Application architect

- e-crm

3 Need, Objective, Scope & Research Methodology…………………...22-27

5 interpretation and analysis & Recommendations……………………28 - 42

6 References…………………………………………………………….43 -44

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Introduction

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. Today,

businesses are facing an aggressive competition and they have to make Efforts to

survive in a competitive and uncertain market place. People have realized that

managing Customer relationships is a very important factor for their success.

Customer relationship management (CRM) is a strategy that can help them to

build long-lasting relationships with their customers and increase their profits

through the right management system and the application of customer-focused

strategies.

“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 favor; he is doing us a favor by giving us an opportunity to serve

him.” (By Mahatma Gandhi)

It has grown mainstream and is being implemented in a wide range of companies

and organizations such as manufacturing, financial services, transportation and

distribution, medical services and products, consumer package goods and others.

This explosive growth of CRM reflects the intersection of genuine market need

and enabling technology. And, in this growth period, the impetus for CRM is

shifting from an emphasis on efficiency, i.e., doing more things faster with less

cost, to effectiveness, i.e., doing things better for increased revenue with a high

"return on relationships (ROR)". According to Chaudhuri and Shainesh. A CRM

programmer requires a clear understanding and commitment to the company's

customers, vigilant adherence to detailed goals, commitment from both executives

and line workers, and a constant awareness of the customer's view point.

Customer relationship management is about more than simply managing

customers and monitoring their behavior or attitude. CRM has the potential to

change a customer‟s relations with a company and increase revenues in the

bargain. Furthermore it helps to know the customers well enough to decide whom

to choose and whom to lose.

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The objective of CRM (customer relationship management) is to recognize and

treat each and every customer as an individual. Any business to know that how to

differentiate customer treatment according to an individual preferences.For

differentiate customer treatment, the companies use personalized service and

customized products which make some customers feel special and others simply

appreciate good behavior. It humanizes their purchase or service request or

complaint. Personalization and customization doesn‟t mean maintaining only

customer loyalty, but also driving purchases higher.

Getting closer to customers and effectively responding to their needs is a great

way to boost their loyalty and encourage deeper business relationship.

The task of getting and retaining customers requires even greater skill and effort.

The business needs to ensure that the service works as the customer actually wants

it to, and the customers want to do business in 'their' way, not to be forced to do it

in the enterprise's way. Most companies consider the customer-focused and

believe that in being so they are servicing the customer. But eventually, being

customer focused means to have a consistent, dependable and convenient

interaction with customers in every encounter. CRM technologies focus on

managing all interactions that an organization has with its customers, in order to

leverage the data in a variety of business applications.

Where a profitable relationship already exists, CRM can especially boost superior

service at a lower cost. In addition to this it helps to serve customer's unspoken

needs.

Generally speaking, the five needs of customers are:-

(a) Service

(b) Price

(c) Quality

(d) Action and

(e) Appreciation.

Apart from these, there would be needs, which even the customers have not taken

care of, but which, if would have satisfied will lead to higher customer loyalty.

CRM, if practiced properly might lead to cross-selling and up selling of products

and services. Cross-selling means selling the right product to the right customer.

One other relevant and important attribute of CRM is its ability to help in the ego-

mending of customers. This, if practiced efficiently, soothes the customer's

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negative emotions he could have, due to the non-attainment of his expectations

regarding the product or the service. The adoption of CRM in the hospitality

industry has been impeded by a number of factors. These include the persistently

fragmented nature of the industry, the disparate, proprietary and relatively

immature nature of IT systems, and the additional complexity associated with

managing a perishable product that is sold through a variety of distribution

channels. However, more rapid progress is being made due in part to the continued

consolidation between hospitality companies and hospitality IT vendors.

Research Questions

a) How will CRM help to retain customers in hotel industry?

b) What are the new marketing approaches in hotel industry?

c) How CRM can be effectively administered?

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LITERATURE REVIEW

Customer Relationship Management (CRM) is one of those magnificent concepts

that swept the business world in the 1990‟s with the promise of forever changing

the way businesses small and large interacted with their customer bases. In the

short term, however, it proved to be an unwieldy process that was better in theory

than in practice for a variety of reasons.First among these was that it was simply

so difficult and expensive to track and keep the high volume of records needed

accurately and constantly update them.

In the last several years, however, newer software systems and advanced tracking

features have vastly improved CRM capabilities and the real promise of CRM is

becoming a reality. As the price of newer, more customizable Internet solutions

have hit the marketplace; competition has driven the prices down so that even

relatively small businesses are reaping the benefits of some custom CRM

programs.

The 1980‟s saw the emergence of database marketing, which was simply a catch

phrase to define the practice of setting up customer service groups to speak

individually to all of a company‟s customers.

In the case of larger, key clients it was a valuable tool for keeping the lines of

communication open and tailoring service to the client‟s needs. In the case of

smaller clients, however, it tended to provide repetitive, survey-like information

that cluttered databases and didn‟t provide much insight. As companies began

tracking database information, they realized that the bare bones were all that was

needed in most cases: what they buy regularly, what they spend, what they do.

Advances in the 1990’s

In the 1990‟s companies began to improve on Customer Relationship Management

by making it more of a two-way street. Instead of simply gathering data for their

own use, they began giving back to their customers not only in terms of the

obvious goal of improved customer service, but in incentives, gifts and other perks

for customer loyalty.

This was the beginning of the now familiar frequent flyer programs, bonus points

on credit cards and a host of other resources that are based on CRM tracking of

customer activity and spending patterns. CRM was now being used as a way to

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increase sales passively as well as through active improvement of customer

service.

Review on Importance of Customers

There exists a wide-spread mistaken notion that CRM is some kind of a

manifestation of technology only. Another interesting thing is that even those who

have implemented highly technological installations for their CRM initiatives,

quite often can be seen to have forgotten the basis of this modern concept, i.e.,

making profitable relationships with their customers.

This significant part is left to the technology alone (Schneider and Bowen,

1999).Such a situation arises mainly because of the inability or reluctance of the

management to accept the importance of customers and serving them to keep them

satisfied and happy, which otherwise may result in low sales and hence low

profits. "One widely accepted marketing rule-of-thumb claims that the average,

unhappy customer tells eight other potential customers about his negative

experience." (Lemon, et al, 2002)

Some decades ago, most of the companies concentrated mainly on higher

productivity through higher levels of efficiency of employees as well as machines,

cost-reduction tactics and on attracting more customers through the classic

marketing tactics such as TV advertisements, mass mailings, bill boards etc. But

the sudden growth and expansion of services sector proved that these would not

convert into profits, as was expected. Moreover, the emergence of faster, cheaper

and more efficient systems of communication, transport and information

technology has made the business enterprises realize that the competition is just a

mouse click away. These changed, new environment of business unveiled the

importance of keeping the existing customers loyal so that they would not switch

over to the competition, without much thinking. This led to the increased

awareness of companies about the importance of serving the customer needs with

a higher level of quality and in a way which is convenient and beneficial to both

the companies and the customers. (Anton, 2005)

According to Berry (1983) Customers to a business are those people or enterprises

which are benefited by the use of a service or product offered by that particular

business, certainly for something in return, generally a price. When a customer

pays a price, he expects some specific thing with a specific quality and features. If

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his expectation exceeds what he has been given, it leads to an unsatisfied

customer. If the offer exceeds his expectations for a stipulated price, it leads to a

highly satisfied customer and he is said to be enjoying customer delight.

Today, the customer has more choices to choose from. So it is more likely for any

customer to switch from one company to another in search of better quality or

service. But the companies have found out that creating new demand i.e., finding

out new customer is much costlier than keeping the regular demand, i.e. Existing

customers for a regular inflow of cash and hence profits. "The reports on new

customer acquisition costs vary, from as low as three times to as high as thirteen

times of servicing an existing customer." (Berry, 1983)

In a customer‟s viewpoint, there is very little reason to switch loyalties often, if

things are going comfortably with the existing vendor and the level of service is

good. Switching involves changes and disruptions in service levels that most

regular customers try to avoid. Realizing these facts in its true sense, many

companies have stuck to making long-term profitable relationships with their

prospective customers. (Hart et al, 2002) And this has been proved to be, in a way,

mutually beneficial to both the parties. This has resulted in managing these

relationships as a strategic tool and in the evolution of Customer Relationship

Management or most commonly known as CRM.

Industry Definition (Article)

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. If you believe

otherwise, just look behind you at the long queue off competitors lined up and

waiting for the opportunities to prove you wrong.

CRM is a business strategy to select and manage the most valuable customer

relationships. CRM requires a customer-centric business philosophy and culture to

support effective marketing, sales and service processes. CRM applications can

enable effective customer relationship management, provided that an enterprise

has the right leadership, strategy and culture. (Anton, 2005)

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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.

Tactically, where does CRM start? The recommended implementation of customer

relationship management typically looks like (Hart et al, 2002):

Statistically valid customer satisfaction measurement:

From the very top of the organization, there should be a commitment to CRM

including customer satisfaction, employee satisfaction and a desire to have one

voice to the customer.

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.

The data sources may include guest history, external guest profiling systems,

restaurant club programs, sales and catering system information and other data.

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. It‟s

uncertain whether anyone is there in the hospitality industry, but certainly

companies are getting very close to understanding the most profitable customers

and most profitable micro-markets. The immediate tactical example of this is can

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be found in well utilized sales and catering systems, which integrate the

profitability of groups and meetings.

Linking the meeting planner satisfaction to each of these sales and catering

accounts is the first step in making sure that your best customers are most

satisfied.

Scope of the Study

This study will provide an insight into the hotel industry and the steps being

taken by them to improve their relationship with their guests/customers. From the

study, we can infer the present scenario of the practices and programs being

followed by the leading players in this sector and the steps being followed by them

to enhance customer retention, customer satisfaction and in turn, leading to

enhanced profits and brand image in the minds of the customers.

CRM and Technology

In CRM the important functions are collecting customer data, analyzing them and

making relationships with the prospective customers based on the analyzed

information. Among these three main functions, the first and the last ones are

making direct contact with customers, while analyzing data is not. The

operational CRM deals with those which make customer contacts or otherwise

called as touch points. On the other Analytical CRM does the job of analyzing

the accumulated data from the various touch points with the aid of business

intelligence. By using the new CRM techniques the companies are trying to

provide a consistent but tailored customer experience across all contact points with

the customers.

The Components of Operational CRM:-

1. Customer Service and Support (CSS):

These applications basically automate the support and service functions, including

analysis and also provides workflow engines that facilitate efficient problem and

inquiry escalation, tracking and resolution. They also provide customizable,

dynamic scripting capabilities for the customer service representatives or

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executives as well as the potential to record customer responses in a shared

storehouse.

Call centers use operational CRM tools; They also integrate with computer

telephony integration capabilities which allows automatic call routing with

automatic screen pop-ups containing all customer and product information to the

agent's work stations as the agents are answering or initiating calls. (Chaudhuri &

Shainesh 2001)

2. Sales Force Automation (SEA):

These are tools which automate the collection and distribution of all types of sales

or sales related information‟s. SEA allow for the design of sales teams based on

particularly defined criteria. Calendar management, activity management, sales

reporting and forecasting, lead distribution and tracking of sales contacts with

customers and prospects are some of the capabilities offered within these

solutions.

3. Marketing Automation (MA):

These applications provide the ability to create automated marketing campaigns

and track the results. Generating lists of customers to receive mailings or

telemarketing calls, scheduling automatic or manual follow-up activities and

receiving third-party lists for incorporation into the campaigns are all typical

functions. Internet personalization tools are offered here to track behavior on a

web-site and allow tailoring of the marketing automation suites.

Advantages of CRM

Using CRM, a business can:-

Provide better customer service

Increase customer revenues

Discover new customers

Cross sell/Up Sell products more effectively

Help sales staff close deals faster

Make call centers more efficient

Simplify marketing and sales processes

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Generally, following are the type of data a CRM project includes:

Responses to campaigns

Shipping and fulfillment dates

Sales and purchase data

Account information

Web registration data

Service and support records

Demographic data

Web sales data

Key Features of CRM Tools

CRM includes all business processes in sales, marketing, and service that touch

the customer.With CRM software tools, an enterprise might build a database about

its customers that describes relationships in sufficient detail.The management,

salespeople, people providing service to the customer can access information,

match customer needs with product plans and offerings, remind customers of

service requirements, check payment histories, and so on.

Need of Customer Relationship Management - CRM

The generally accepted purpose of Customer Relationship Management (CRM) is

to enable organizations to better serve its customers through the introduction of

reliable processes and procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be

implemented by only installing and integrating a software package designed to

support CRM processes. A holistic approach to CRM is vital for an effective and

efficient CRM policy. This approach includes training of employees, a

modification of business processes based on customers' needs and an adoption of

relevant IT-systems (including soft and maybe hardware) and/or usage of IT-

Services that enable the organization or company to follow its CRM strategy.

CRM-Services can even redundant the acquisition of additional hardware or CRM

software licenses.

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The term CRM is used to describe either the software or the whole business

strategy oriented on customer needs. The second one is the description which is

correct. The main misconception of CRM is that it is only software, instead of

whole business strategy.

Major areas of CRM focus on service automated processes, personal information

gathering and processing, and self-service. It attempts to integrate and automate

the various customer serving processes within a company.

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

like technology

3. Co operational - ensures the contact with customers (phone, email, fax, web...)

e-CRM 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. Corporations realize that the true values of their customers in down turn

are the ones that will be equipped, tied over the slump and jump start, consolidate

and thrive 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.

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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 Service Call Center Software,Help Desk Software,Partner Relationship

Management

Contract Management Software: Contract Management Software enables an

enterprise to create, track and manage partnerships, contracts and agreements.

Example: Upside Software, Accruent Software, diCarta, IMany.

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

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companies use Guest Ware to improve guest satisfaction, lower operating costs,

build guest loyalty, and increase revenues. (www.guestware.com)

Guest Ware is installed in over seven hundred hotels and resorts worldwide;

including Marriott International, Kimpton Hotel Group, Hyatt Hotels, Star wood

and many independent hotels and resorts.

Marketing Solution - The CRM Approach

Now more than ever, it is critical for hospitality sales and marketing professionals

to maximize their return on investment (ROI) in marketing.

Experts agree targeted marketing to existing customers is the best way to increase

marketing ROI. Most industry consultants estimate the cost of finding a new

customer is between 5 and 10 times the cost of retaining an existing customer.

Improvement Analysis - Implement Process Improvement

Industry surveys show that guests are less likely to return if they experience a

problem during their stay. Guest Ware‟s Improvement Analysis tools provides

with the information to eliminate recurring problems and keep guests coming

back, so to lower operating costs and increase guest satisfaction at the same time.

(Raghunath & Shields 2001)

Comment Card Tracking - Listen to your CustomersC ustomer survey on

restaurant or an extensive questionnaire of guests, the Guest Ware Comment Card

Tracking system assists to manage customer feedback. Guest Ware will improve

productivity in the follow-up process and provide valuable management reports to

maximize the benefits of your surveys.

Guest ware Enterprise Solution – For Effective Means Intended for hotel chains,

brands and management companies, the Enterprise Guest Ware database maintains

a single view of the customer essentials for CRM. Enterprise Guest Ware

enhances property management systems (PMS) and central reservations systems

(CRS). It allows hotel companies to implement enterprise CRM while

leapfrogging existing hotel technology investments.

Communications Server - Two-way Messaging

The Guest Ware Communication Server integrates two-way messaging (or other

types of text-based messaging) with Guest Ware‟s Rapid Response. It allows staff

to receive and close requests and maintenance issues from a pager or cell phone.

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The software helps streamline service delivery and uses existing e-mail systems or

a modem to communicate with most two-way messaging devices.

With the latest offerings in CRM, Hoteliers can:

Develop comprehensive guest profiles from reservation information and

demonstrate to guests/customers that the property is in touch with their

needs

Drive guest-centric data down to the transaction level, allowing

employees and guest-facing technology to deliver greater value to the

guest/customers.

Generate a realistic profile on the spending and stay patterns of guests,

allowing the

property to create guest-centric marketing for increased loyalty and

spending.

ITC Maurya Sheraton - Field selling, Loyalty programs, Reservation systems,

Web & Call centers are the major sources of database development. The hotel has

35,000 members in its database. They regard this management of their database as

an asset because it enables a superior customer understanding.

Using the Database:

Product and service improvement is just one result of tapping into a database.

Developing special promotions and employing direct mail to promote these

campaigns is another major use of database marketing.

For example: A sales team of Mughal Sheraton, Agra had completed a review of

an upcoming weekend. This review revealed that bookings to date were some

what below forecast and that a special promotion may be done in order to speed up

the business. The sales team then enveloped special promotion packing to

encourage bookings for weekends. They searched their welcome break holiday

package database and scratched it to identify and segment the customers who tend

to (Sheth, 2002):

Book on long weekends

Book on a short term basis

Respond to promotional campaigns

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The direct mailing was used as a principal means to reach out to these customers.

Activities like these are today referred to as database marketing. It is aggressive

selling to the potential customers who have particular needs and wants and

building a match or “fit” the needs of the noted. Therefore, out of the database of

35,000 members, only a few but almost some customers were contacted by direct

mailing which resulted in sizeable sale during the otherwise lean weekend at

Mughal Sheraton Agra.

Database Mining

Starkov, (2006) points out that Database mining is the process to distill the target

customers groups out of the massive data files typically found in hospitality

operations. In other words, these are systematic ways to distill through a database

of a multitude of databases to get the information for which one is reaching.

Some hotels outsource these tasks to companies that specialize in this field or at

best, do it internally. It enables users to easily integrate company/ property

management reservations and point of sale systems, automatically extracting

operating data from legacy databases for use in the marketing database. The

systems analysis tools allow users to profile their most profitable customers,

analyze their buying habits, develop & assess the performance of targeted

marketing campaigns. The biggest advantage of database mining is that it helps to

focus the efforts and available resources into one direction which is most

profitable and out-base mining helps to eliminate the non-profitable customers and

hence reduces the costs and enhances the profits. The profits enhanced are not

only in monetary terms but also in terms of customer loyalty and long term

retention. Companies in hospitality that are adopting the database marketing

approach to enhance sales are seeing increased customer satisfaction which further

results in increased revenues. From the point of view of the internal customers

also, a new profession is emerging in the hospitality industry of getting and

keeping a customer. (Rmana & Somayajulu, 2005)

Relationship Marketing

Rama (2005) suggests that frequent customer programs and database marketing

efforts contribute to a more comprehensive approach to satisfying customers

called relationship marketing. Relationship marketing depends on the goodwill

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generated by frequent-buying programs as well as on the information provided

from database marketing efforts, goes beyond simple short term awards and

involves all the elements of a firm‟s and services to encourage a personal

relationship with each customer.

Relationship marketing is “knowing the customer and using that information to

bond with them.” Form the initial personal contact and then serve as the

foundation for nurturing this brief encounter into a friendly and accommodation

relationship by focusing on personal guest information. In addition to knowing the

purchase habits of members (room selection, certain amenity preferences, and so

forth), personal information such as spouse‟s name and hobbies are added to a

member database (see previous section on database marketing). (Swift, 2001) The

company uses this information to tailor special events and products to small

segments of the membership.

Complaint Handling

Few companies, use or pay attention to complaints. Who wants to hear what

they‟re doing wrong, especially if the criticism is well founded. It is estimated that

90 percent of dissatisfied customers whose problems were not solved will never do

business with the retailers that sold them the product nor will they again buy the

product that caused the problem. In case of hotels customer/guest is more likely to

switch if the provided service is not satisfactory to their expectation.

On a personal level we all know what our faults are but we get defensive way

they‟re re pointed out. We‟re also aware of weaknesses in our job performance,

problems in our organization and imperfections in its products and services. But

reacting to criticism is difficult. We tend to respond in a guarded and defensive

way, which may avoid squarely confronting the real problem. Likewise,

companies tend to let themselves off the hook too easily: “We never could have

satisfied that customer.”

(Schneider and Bowen, 1999)

The astonishing news is that those people who do complaint and have their

problem taken care of, tend to be more loyal to the company than the people who

were satisfied in the first place. World-Class companies see complaints as

opportunities to improve, to impress customers and to turn complaining

customers into loyal ones

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Priority Marketing

Priority Marketing focuses on what‟s important to the customer. What is important

to one customer however, may not be as important to another.

Consider the varying demand placed on a hotel: An airline stewardess may find

the 24 hour room-service extremely valuable, a retired couple may need dietary

menu options, a tour wholesaler may favor low prices, and a young female

executive considers a security a priority.

Hotels should break down their services and ask customers what is important to

them. This approach can field very valuable insight about changing customer

preferences.

Identifying groups of customers who have similar preferences or even similar

tastes (such as sharing common perceptions of quality or states), hotels can target

promotions to capitalize on known characteristics and individualize the

presentation. (Rmana & Somayajulu, 2005)

Objectives of the Study

The primary objective would be:

To study “Customer Relationship Management in the Hotel Industry”.

The other objectives would be:

To study the programs and practices of CRM employed by the leading

hotels in India

To study the measures to build a better relationship between the

customer/guest and the hospitality unit and finally to conclude the findings

and suggest any recommendations regarding the future growth prospects.

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RESEARCH METHODOLOGY

In this section I have first explained about research philosophy and approaches. In

the later part of the chapter a brief and detailed overview of the research design

and methodology used by me for this dissertation are provided.

Research Design

After having defined the marketing research problem and developed a suitable

approach, attention must be given to the formulation of a detailed research design,

which will provide pertinent information. According to (C.R. Kothari, 2004) when

defining research design, he presents it simply as „the framework for a study used

in order to guide the collection and analysis of data‟.

According to Kothari (2003), there are two major types of research design:-

1. Exploratory research --concerned with the development of initial hunches or

insights.

2. Conclusive research --intends to verify insights and help decision makers to

select a specific course of action. Even though exploratory and conclusive research

has distinct purposes, they both consist of the same research components. They

differ only in terms of the degree of formalization and flexibility of the

components illustrated in table below:

Research project

Components

Exploratory Research Conclusive Research

Research Purpose General: To generate insights about a situation

Specific: To verify insights in selecting a course of action

Data Needs Vague Clear

Data Collection Form Open-ended, Rough Usually Structured

Sample Relative Small Relative Large

Data Collection Flexible, No set procedures

Rigid, well laid out

Procedures

Data Analysis Informal, Typically non-

QuantitativeFormal, typically quantitative

23

Exploratory Research:

According to Kothari (2003), the primary purpose of exploratory research is to

shed light on the nature of situation and identify any specific objective or data

needs to be addressed through additional research. Exploratory research is the

most useful when a decision maker wishes to better understand situation, identify

relevant courses of action or gain additional insights before an approach can be

developed. In general, exploratory is appropriate to any a problem about which

little is known.

Exploratory studies are distinguished by flexibility concerning the methods

employed. Literature searches, experience surveys and study of selected studies

are some commonly used approaches (Kothari, 2004).An effective way of doing

exploratory research is to seek out and talk to individual with expertise related to

the situation being investigated.

Conclusive Research:

The insights gained from exploratory research might be verified by conclusive

research, as the objective of conclusive research is to test specific hypothesis and

examine specific relationship (Malhotra, 1999). Conclusive research is especially

useful when the decision-maker already has in mind on or more alternatives and is

specifically looking for information pertinent to evaluating them. Therefore, when

conductive a conclusive research, the decision maker can choose the best course

action in a situation.

The kind of research is based on large, representative samples, and the data

obtained are subject to quantitative analysis.

There are two basic forms of conclusive research:- Descriptive research

Casual research

The distinction between the two is based on the primary purpose of a conclusive –

research project and the nature of the inferences that can be drown from it.

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Descriptive research:

Descriptive research is the design involved in the vast majority of marketing

studies. The goal of descriptive research, as the name implies is essentially to

describe something. Specifically, it is intended to generate data describing the

composition and characteristics of relevant groups of unit such as customers,

salespeople, organization and market areas

(Parasuraman, 1991).Data collected through descriptive research can provide

valuable information about the study units along relevant characteristics and also

association among those characteristics.

STEPS IN THE RESEARCH PROCESS

The present study focuses on “Customer Relationship Management in the

Hotel Industry”.

This study is descriptive in nature while it seeks to identify the present

scenario of the practices being followed by the leading hotels in India for

enhancing customer retention, satisfaction and loyalty. It not only intended

to assist any player in this field to capitalize on existing potential but also

formulate strategies in planning, designing and marketing of CRM tools and

programs ultimately leading to a better brand image in the minds of the customers

and increased revenues in the long run.

Research simply means a search for facts- answers to questions and solution to

problems. It is a purposive investigation and an organized inquiry.

This research project has a specified framework for collecting the data in an

effective manner. Such framework is called “Research Design.”

The research process consists of following steps:-

DEFINING THE RESEARCH PROBLEM AND RESEARCH

OBJECTIVES

Relationship Management in the Hotel Industry”.

DEVELOPING THE RESEARCH PLAN

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Data Source:

The type of data taken into consideration for this topic is the Secondary data. It is

that data which somebody else had collected and which had already been passed

through the statistical process. It was collected from hotel tariff cards, magazines,

newspapers, articles, and internet and company records.

ANALYZE THE INFORMATION

The next step is to extract the pertinent findings from the collected data. In this

project, the collected data is presented as the CRM practices followed by each

hotel covered in the study

STEPS IN THE CRM PROCESS

The first step in CRM is for the internal customer that is to create awareness

among them towards the concept, advantages and disadvantages of the

function. Then equip them by training in their own requisite functions &

scope of CRM within that function. At Maurya, they are trained to learn

more about the guest and his background so that when he talks to the guest,

he can strike a conversation that is of some interest to the guest.

That may not be necessarily related to his stay at the hotel but these informal

conversations with the guest can help build an excellent rapport with the guest

which will lead the guest to know the employee by the name.

In future interactions, it is possible that the guest may only wish that most of his

work done through that employee. This is also a form of customized and

personalized selling within the hotel.

Maurya does not have a separate training for CRM. Any time when they have a

special promotional scheme for a particular property, the marketing team (which

has formulated the promotional scheme) puts together the details of the scheme,

clearly marks out what is the customer expecting from the property and also if

these are some special arrangements to be made for it. This team briefs the

General Manager of the property about the customer expectation. The General

Manager then decides the path of trickling down to that information, who should

know & how much to know.

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In Maurya Sheraton, they use a phrase to explain this percolation which is

“Nice to know and needs to know” which essentially means that it is nice to know

for all employees of a particular property about the running of the promotional

scheme at their property but not all need to know about every aspect of the scheme

as it may not be relevant to their scope of work but they do need to know the tier

points of the scheme relating to their scope of work.

The second step in CRM process is to integrate the information which is received

through touch points. From a marketing point of view, it is important to get the

desired input back from touch points in such a way that all the bits and pieces

picked up by different touch points can be organized and used as valuable

information by various other touch point to offer the right product to the right

customer and that too at the right time.

Strategic Elements of CRM:-

Our experience and research identifies five crucial elements required for a

successful CRM initiative in any service organization.

For some companies, additional elements may become equally crucial, but we see

these strategic concepts as universal:

1. Guest recognition

2. Data capture and maintenance

3. Channel integration and consistency

4. Ranking and discrimination

5. Two-way personalized dialogs

Let‟s examine each of these areas in more detail.

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Guest Recognition

Recognition means many things. A smiling face, recalling a preferred room type

or a welcome back greeting are all common recognition experiences in the hotel

industry. These are all typical recognition interactions between a repeat visitor to a

given hotel and a front of house employee endowed with a hospitality work ethic.

When recognizing a customer of the brand more so than of the hotel, the

challenges expand geometrically, but so do the opportunities. Many of the multi-

brand companies succeed in this area by training reception staff to acknowledge

the guest‟s participation in the multi-brand frequency program (i.e. I have your

frequency program number on your reservation.), but that is only part of the story.

The trick is to get the relevant information in front of the line employees rather

than keeping it locked up in an offline analytical database or centralized system

not available to hotel personnel. If you want to impact service delivery, the

information must be in the hands of line employees.

An essential concept in discussing guest recognition is that of preferences.

Capturing, retaining and making effective use of expressed customer preferences

is the essence of guest recognition. You are not only acknowledging that the guest

has a prior relationship with the enterprise, but you are able to do something useful

for the guest with that knowledge.

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Interpretation and analysis

The concern project is based on the customer relationship management in the hotel

industry. We have taken 15 hotels from Jalandhar and after going through the

deep study we came to know that the maximum no. of hotels are having below 50

rooms in their hotels whereas only 4 hotels such as Leo fort, Sky lark, The Maya

and Redisson Windsor are having 50 – 100 rooms for their customers. As the pie

chart given below no any such hotel is there which has more than100 rooms for

their customers.

Rooms

Frequency Percent Valid Percent

Cumulative

Percent

Valid below50 11 73.3 73.3 73.3

50-100 4 26.7 26.7 100.0

Total 15 100.0 100.0

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customer arrival

Frequency Percent Valid Percent

Cumulative

Percent

Valid 10-15 3 20.0 20.0 20.0

15-20 3 20.0 20.0 40.0

more than 50 9 60.0 60.0 100.0

Total 15 100.0 100.0

As we have seen that the number of customer which are arriving every day in the

hotels is 10-15 in 3 hotels where as in only 3 hotels 15 to 20 customers are

arriving everyday simultaneously more than 20 customer are arriving in only 9

hotels every day. The pie chart showing above the arrival of customer arrival

everyday in the hotels

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regular customer

Frequency Percent Valid Percent

Cumulative

Percent

Valid less than 20 5 33.3 33.3 33.3

20-30 6 40.0 40.0 73.3

30-40 4 26.7 26.7 100.0

Total 15 100.0 100.0

Simultaneously the approximate number of regular customer is also less than 20 in

6 hotels where as in 3 hotels the approximate no. is 30-40 customer and also in

next 6 hotels the number of regular customer is 20-30 in regular basis.

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customer need

Frequency Percent Valid Percent

Cumulative

Percent

Valid Service 10 66.7 66.7 66.7

Variety 2 13.3 13.3 80.0

Appreciation 2 13.3 13.3 93.3

price 1 6.7 6.7 100.0

Total 15 100.0 100.0

Now, through the study we came to know that the maximum hotels are agree to

provide give better service to customer so that their customer become loyal and

the relationship between them should continued but we also came to know that

out of 15 only 3 hotels for ex-Radisson Windsor, Leo fort hotel and Shekhon

grand hotel are considering appreciation is the most important to the customers.

Whereas only 2 hotels consider variety as an important needs of the customer. The

pie chart is given below:-

32

feedback

Frequency Percent Valid Percent

Cumulative

Percent

Valid always 11 73.3 73.3 73.3

never 4 26.7 26.7 100.0

Total 15 100.0 100.0

After going through the study we came to know that mostly all hotels take

feedback from there customers through which they come to know about there

strengths and weaknesses but some hotels do not take feedback because which

they are still not aware about there weaknesses and that is one of the reason why

there hotels are not among the best in the city.

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contact customer

Frequency Percent Valid Percent

Cumulative

Percent

Valid Monthly 6 40.0 40.0 40.0

Halfyearly 9 60.0 60.0 100.0

Total 15 100.0 100.0

Contacting the customers is very important when you are in the hotel industry and

almost every hotel contacts its customers similarly in the study it can be seen that

6 hotels contact there customers regularly i.e. every month and the rest contact

there customers only on occasions or half yearly.

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loyalty card

Frequency Percent Valid Percent

Cumulative

Percent

Valid yes 6 40.0 40.0 40.0

no 9 60.0 60.0 100.0

Total 15 100.0 100.0

As we can see from the above pie chart that only 7 hotels in the city provide

loyalty cards which helps them to know the likes and dislikes of there customers

and helps them to grow. There are many hotels that do not provide loyalty cards

which they must provide so

as to grow even more.

35

As we have come to know that the hotels are more concern about the service

providing and for that they take feedback also .but here the three hotels are not

taking feedback which lack customer relationship between them. The most of the

hotels are giving discount to the regular customer and the situation where any

complaints done by the consumers. The concern 13 hotels believe that technology

should be there for customer relationship so that they could maintain the

relationship with them but after knowing also that technology can help to retain

customers .

Only 2 hotels are neither believes that such software should be used nor they want

to use it in near future. It is also came to know that the six hotels are providing

loyalty card for discount and remembrance to their customer and rest are not

providing any type of loyalty card to their customer. As we have seen that the

customer relationships in these 15 hotels have been done only through loyalty card

and there is no any other initiatives have been taken yet to increase the relationship

management.

36

technology importance

Frequency Percent Valid Percent

Cumulative

Percent

Valid yes 14 93.3 93.3 93.3

no 1 6.7 6.7 100.0

Total 15 100.0 100.0

As we have seen that the concern hotel are believing that they should use

technology based software for maintaining the customer loyalty program.but even

then they are not using any of type of software such as guess ware used in the

most of the hotels .as it can be seen from the given above data

37

discount on complaints

Frequency Percent Valid Percent

Cumulative

Percent

Valid always 14 93.3 93.3 93.3

3 1 6.7 6.7 100.0

Total 15 100.0 100.0

Here we can see from the above pie chart that the hotels are giving discount only to

whom who are doing any complains for service as well as prodect.

38

discount to regular customer

Frequency Percent Valid Percent

Cumulative

Percent

Valid always 15 100.0 100.0 100.0

As we have seen that most hotels are giving the discount to the regular customer

but they are nott in the intension to the give the discount to their general customer.

So in this way we can able to understand that their loyalty for the customer is only

for them who are the regular customer. They should give discount to their general

customer.

39

crm to retain customer

Frequency Percent Valid Percent

Cumulative

Percent

Valid yes 15 100.0 100.0 100.0

We have seen that all hotels are believing that customer relationship management

are helpful for retaining the customer but they are not actually implementing any

type of initiative for that. You can see from the above data that the hotels are agree

to believe the relationship management but unable to have some any type of

customer relationship management practices in the hotel .

40

CONCLUSION

As we have seen have seen that in 15 hotels whatever we have taken for sample

they use no any customer relationship management practice rather than loyalty

card and discount when complained by the customer. So it is came after study that

the hotel industry in jalandhar only seems to provide service to customer but not

the long relationship management practice. So for this we have analyzed the above

situations and practice and at last come to know that they follow only providing

service not relationship marketing with technology and software uses.

Recommendation

As we know that today hotel businesses are facing an aggressive competition and

they have to make Efforts to survive in a competitive and uncertain market place.

People have realized that managing Customer relationships is a very important

factor for their success. Customer relationship management (CRM) is a strategy

that can help them to build long-lasting relationships with their customers and

increase their profits through the right management system and the application of

customer-focused strategies. We have seen and analyzed from the sample that the

hotels of Jalandhar which are 15 in number are technology less. They are not using

any technology for the customers identity,loyalty as well as interaction with them .

so they should follow through these recommendation.

They should contact with customers for ex- by phone, email, fax, web...etc)

The use of software like Guest Ware which manage guest loyalty, guest

recognition, service delivery and the facility. Overall, improves guest

satisfaction, lowers operating costs, and increases revenues etc.

Feedback should be taken from all the customer rather than regular

customer.

They should train their employee to serve better service to their customers .

Hotel industry should take initiatives for using the database software to

remember the like and dislikes of the customers for the future prospectus.

Hotel industry should send birthday cards, membership card, club cards etc

for creating identity and positioning in the mind of customer.

41

They should insure the best possible service improvement with the

employee and guest and also provide better product with service rather than

price.

. Surveys: Conducting monthly guest/customer surveys, club surveys,

room comment cards, toll free guest assistance centers can help in getting

customer feedback and to improve in the areas where there is a lag as

suggested by the feedback.

Maintaining suggestion boxes at every touch point/point of interaction

with the customers.

Taking feedback not only from external customers but also the internal

customers i.e., the employees.

Proper check on the hotel staff’s and processes’ efficiency by the

management, say by employing Mystery Customers.

Surveys: Conducting monthly guest/customer surveys, club surveys, room

comment cards, toll free guest assistance centers can help in getting

customer feedback and to improve in the areas where there is a lag as

suggested by the feedback.

Maintaining suggestion boxes at every touch point/point of interaction

with the customers.

Taking feedback not only from external customers but also the internal

customers i.e., the employees.

Proper check on the hotel staff’s and processes’ efficiency by the

management, say by employing Mystery Customers.

Keeping regular track of the sales data for further leads and followup

Employing effective CRM software to improve guest satisfaction, lower

operating costs, build guest loyalty, and increase revenues.

Having Guest History programs- keeping a databank of customer profiles

along with such details as room preferences, amenities preferred, special

requests, meal preferences, wallet services, sending birthday cards to the

loyal guests and even their spouses and giving them a hassle-free check-in

procedure-like sending them pickup and drop facilities.

Employing an efficient system of complaints handling as complaints are

the opportunities to improve, to impress the customers and to turn

complaining customers into loyal ones.

Giving recognition awards to attract old customers.

Giving the customers a more personalized and empathic services as

building good rapport with the customers goes a long way in having

satisfied and return customers.

Keeping regular track of the sales data for further leads and followup

Employing effective CRM software to improve guest satisfaction, lower

operating costs, build guest loyalty, and increase revenues.

42

Having Guest History programs- keeping a databank of customer profiles

along with such details as room preferences, amenities preferred, special

requests, meal preferences, wallet services, sending birthday cards to the

loyal guests and even their spouses and giving them a hassle-free check-in

procedure-like sending them pickup and drop facilities.

Employing an efficient system of complaints handling as complaints are

the opportunities to improve, to impress the customers and to turn

complaining customers into loyal ones.

Giving recognition awards to attract old customers.

Giving the customers a more personalized and empathic services as

building good rapport with the customers goes a long way in having

satisfied and return customer.

43

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