Customer Relationship Management in Hotel Industry

CRM in Hotel Industry 1
Chapter # 1. Introduction to the Project Topic
1.1 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.
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 favour; he is doing us a favour 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 (2001)-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.
The objective of CRM (customer relationship management) is to recognize
and treat each and every customer as an individual. It is very essential for
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
them 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. (By Raghunath & Shields 2001)
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 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.
1.2 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?
1.3 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, one 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.
1.4 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.
Finally to conclude the findings and suggest any recommendations

regarding the future growth prospects.
Chapter # 2. LITERATURE REVIEW
2.1 Evolution of CRM
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.
2.2 In the beginning…
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 clients 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.
2.3 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 increase sales passively as well as through active
improvement of customer service.
2.4 About 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.
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 analyse customer behaviour, implements
business intelligence alike technology
3. Cooperational - ensures the contact with customers (phone, email,

fax, web...)
Operational part of CRM typically involves three general areas of business.

They are (according to Gartner Group) an Enterprise marketing
automation (EMA), Sales force automation (SFA) and a Customer service
and support (CSS). The marketing information part provides information
about the business environment, including competitors, industry trends,
and macro environmental variables. The sales force management part
automates some of the company's sales and sales force management
functions. It keeps track of customer preferences, buying habits, and
demographics, and also sales staff performance. The customer service part
automates some service requests, complaints, product returns, and
information requests.
Integrated CRM software is often also known as "front office solutions."

This is because they deal directly with the customer.
Many call centers use CRM software to store all of their customer's details.
When a customer calls, the system can be used to retrieve and store
information relevant to the customer. By serving the customer quickly and
efficiently, and also keeping all information on a customer in one place, a
company aims to make cost savings, and also encourage new customers.
CRM solutions can also be used to allow customers to perform their own
service via a variety of communication channels. For example, you might be
able to check your bank balance via your WAP phone without ever having
to talk to a person, saving money for the company, and saving you time.
2.5 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 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.
2.3 Four Parameters to Measure CRM Success
a) CRM's ability to impact corporate strategy:

Without a corporate strategy, giving emphasis to a customer-centric
approach, no CRM initiative can be made fully successful.
b) Successful technology integration:

The technology which has been used across different departments of an
enterprise should be integrated to give a comprehensive and successful
CRM application.
c)Enhanced strategic partnerships:

For a good CRM implementation, there should be a co-ordinate effort
among the different partners to the enterprise.
d) Assimilation of CRM related technologies:

Those who are responsible for the CRM activities should thoroughly be
conversant with the technological aspects of that particular technique.
Otherwise, misuse or under utilization of these technologies may take place
resulting in partial or full failure of those activities.
2.4 Return on Investment (RoI) of CRM
Rigorous financial scrutiny of all Information Technology IT) investments

have now become the rule. This same rule is applicable to the technology
used in the CRM also. The failures of some CRM installations in some of
the industries have given way to think about the Return on Investment
(RoI) of CRM. (www.ascenantone.com)
Now there are specific analytical tools which will help organizations to
measure their return on investment of CRM. According to George
Varghese, Head (Marketing), SAS India, "Operational CRM can improve
efficiency but it is difficult to calculate RoI. (Mohan Babu, 2003) To
calculate
RoI, enterprises need to build organizational intelligence, customer
intelligence and supplier intelligence to get a unified 360 degree view of
customers, suppliers and organizations." (Dyche, 2004)
Factors to be considered while calculating RoI:-

1. Savings in the form of reduced use of time to manage customers and

customer transactions.
2. Savings in the form of time needed to assemble and consolidate sales
forecasts.
3. Additional revenue in terms of increased lead generation.
4. Additional revenue in terms of increased sales due to increased
customer loyalty. (Berry, 1983)
CRM is an integration of contact management, sales automation, marketing

automation, customer service and support, e-commerce, partner and
channel management etc. It is not just a software solution, but also, a set
of skills and competencies that will enable a company to better leverage
and profit from each and every customer relationships. When the goal of
cheaper, faster, better service is considered, the results far outweigh the
challenges. Several big organizations have failed to know what the customer
really wants and several others, after knowing, could not really translate
these requirements into deliverance. At the same time we are able to see
small shop keepers doing CRM extremely well. Good CRM is all about
replicating the same experience with the use of technology. (Lemon, et al,
2002)
2.5 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.
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 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
contact experience, or generation of specific cross-selling opportunities
based on this behavior. Inbound and outbound e-mail management
capabilities are also becoming popular components of the marketing
automation suites. (Key Note , 2003)
Analytical CRM - How It Functions?
According to Hart et al, (2002) Analytical CRM involves the analysis and
interpretation of large amounts of cross functional data collected from the
customer activities occurred at the front-office. This data is regularly
stored in a data warehouse, which is actually a storehouse of corporate data
from various sources intended to facilitate business analysis. The major
types of analysis of data are the following:
1) OLAP: Online Analytical Processing is one of the most popular type of

decision-support analysis, allowing the average business person to
explore data online with the aim of focusing on detailed data at a lower
and lower level of the data hierarchy. More often, this means
generating an online report, analyzing the results and submitting a
detailed query in order to understand the result data. OLAP analysis
requires the analyst to have a query or hypothesis in mind for clearly
understanding the result.
2) Data mining: Data mining tools identify patterns in data and deliver
valuable new information’s that can increase a company's
understanding of itself and its customers. It is commonly used to help
data analysts search for information they don’t yet know to look for,
often involving no hypothesis. The three types of data mining
are(Dyche, 2004):
o Prediction: The use of historical data to determine future behaviors.

Predictive modeling generates output that populates a model or
structure to represent the results.
o Sequence: Sequential analysis identifies combinations of activities

that occur in a particular order. This is used to determine whether
customers are doing things in a particular order. It can help a
business to distill behavior from events captured from various
operational systems around a company to determine patterns.
o Association: Association analysis detects groups of similar items or

events. The association algorithm is often applied to market-basket
analysis to help business understand products which are usually
being purchased together. The product affinity concept is the base,
here.
3) Click stream analysis: By analyzing the click streams of an internet user,

one can understand how the user arrived at the site, how long he stayed,
what he did during his visit and when he returned. The whole process is
similar to a hidden camera recording the activities of a shopper in a
store. These data are stored either as part of company’s data warehouse
or as separate click stream data store called "data web house: If
examined regularly with consistent metrics, click streams reveal certain
patterns of web-user behavior. (Schneider and Bowen, 1999)
4) Rules based personalization analysis: These analytical tools are based on

the concept of personalization. Here the software makes
recommendations based on the personalized/customized website of a
customer. Rules based personalization most often involves rules that

have been hard-coded into software. For this reason it is often difficult
to maintain and support.
5) Collaborative filtering: This is otherwise known as 'adaptive

personalization.' This gets smarter as it observes customer behaviors
and applies them to new circumstances. Collaborative filtering uses the
behavior of other 'like' visitors as the basis for its recommendations.
These tools are often more complex, and thus more expensive, than
rules-based personalization. (Akhtar, Prashant & Pankaj, 2002)
2.6 Some Applications of Technology in CRM
1. Call centers: These are organizations which deal directly to the

customer interactions. These are otherwise known as "Customer Care
Centre" or "Contact Centre" indicating more technological
sophistication and multichannel support. Call centre technologies
entered the market place to effectively alleviate some of the repeat
work and increase efficiencies, allowing companies to handle escalating
call volumes. Customer Service Representatives (CSRs) could look up
similar calls and resolutions while a customer was on the phone,
without having to repeat research. The software tools being used in the
call-centers also provide forecasting of call volumes to ensure adequate
call centre staffing. (Lemon, et al, 2002)
2. Web based self-service: The customers themselves, without the help of a
live person can resolve their problems or find out answers to their
queries using the web. This model is founded on the principle of
enabling customers, partners and employees to obtain information’s or
conduct transactions directly over the internet, avoiding time-
consuming and costly traditional processes involving multiple verbal
or written interactions. It provides control, performance, convenience
and efficiency. (Chaudhuri & Shainesh 2001)
3. Customer satisfaction measurement: Survey mails are the major way
for companies to monitor customer satisfaction. Nowadays, these survey
forms are even personalized to specific customers or customer groups.
Responses are input into customer databases and included as part of
individual customer profiles. Such tracking of customer satisfaction over
time enables a company to fine tune how it communicates with its
customers according to their preferences. (Mohan Babu, 2003) Now, the
paper based surveys are giving way to electronic surveys.
4. Call-scripting: Automatic scripts generated for customer service

representatives, based on an individual customer's segment and/or
customer profile contents. Scripts remove the guess work from
determining how to respond to a customer query or complaint,
guiding representatives through a dialogue with the customer and thus
optimizing discrete customer interactions.
5. Cyber agents: This is a kind of an improved or modified form of the
concept of self-service. Cyber agents are 'lifelike representatives'
normally depicted on a company’s web site as a real person. This
attempt to pull together the best of both personalization and advanced
technology. It is given a personality and is having facial expressions and
volume. Usually a cyber agent addresses the web visitor with his/her
first name. It can draw from the wealth of detailed information to
answer basic FAQs as well as guide a customer to the appropriate screen
for a definite purpose/action. (Raghunath & Shields 2001)
6. Web site: It is the efficient and effective use of worldwide web for
providing information to the customers, by a company who had created
that site, in a hassle-free manner. The main advantage of a web site is its
24 hours accessibility. Usually gathering information from the site is a
simple task and is cost-effective. In the US and in the developed
countries web is extensively used. In the case of monetary transactions,
if it is a high involvement activity most of the customers prefer the
offline mode mainly due to their concern over security problems in
monetary transactions, through the net. (Key Note , 2003)
2.7 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. If you believe other wise, 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)
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 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.
CRM is not a buzzword program, like so many that have gone before. It is
the integration of all the elements that hospitality has focused on forever:
1. Personally recognizing customers;
2. Offering appropriate value and great service to encourage repeat

business;
3. Insuring that employee and guest satisfaction continues to improve; and
4. Beating the competition by offering a better product, competing on the

service experience rather than price alone.
Like a dog chasing a truck, once you’ve caught it – what are you going to do
with it? This is the analogy posed by Peter Aeby, general manager of the
legendary Brown Palace Hotel in Denver and the chairman of Preferred
Hotels & Resorts Worldwide. Aeby is referring to the mass of information
that major hospitality organizations are now able to collect about
customers. How is it possible to make all this information actionable? And,
with an understanding of labor shortages, high turnover and lack of
computer integration, how does a hotel manager tactically utilize available
tools to improve the frontline experience? How does that same manager
build revenues and customer loyalty from this data?
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
Generally, following are the type of data a CRM project includes (Lemon, et
al, 2002):
 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 (Lemon, et al,
2002).
Customer Relationship Management Solutions – Guest Centric Data
Customer relationship management (CRM) is more than the practice of

collecting guest-centric data. It’s the art of using historical, personal, and
experiential information to personalize a guest’s stay while generating
incremental revenue opportunities. Knowing a traveler is an avid sports fan
creates the opportunity to market tickets to a game; knowing a guest had a
less-than-memorable experience in the hotel restaurant gives a chance to
win them back the next time they are in town. (Raghunath & Shields 2001)
CRM Solutions Built on the Microsoft Platform
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. 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.
• 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, I-
Many.
2.8 Customer Relationship Management Software for the Hotel

Industry
EXAMPLE:-
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. (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 Customers

Customer survey on restaurant or an extensive questionnaire of guests, the
GuestWare 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. 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
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 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.
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)
It is important that hotels involve their guests and stay in touch with
customer perceptions of current services.
2.9 CRM Success
Seeing CRM initiatives take hold and begin to pay off is often a waiting
game. It’s not a “flip-the- switch” product that automatically spits out
results or something that will take affect overnight and cause profits to
skyrocket while you sleep. The puzzle must be completed and time must
play its part before true success will be seen. However, through dedicated
and smart planning, businesses should see markedly increased profits, as
satisfied customers will continually re-visit them. Gradually, as businesses
get to know their customers, their customers get to know them, and a
closely aligned partnership is formed. This one-to-one relationship is the
catalyst that sparks both lifetime customer loyalty and revenue increase.
In the true spirit of thinking outside of the box, experts at the Gartner
Group believe “the most successful organizations will be those who,
through innovation and focus on business effectiveness rather than merely
efficiency, manage to break the mold of traditional business thinking”.
Being effective is paramount. The end goal of better serving customers and
enabling a high percentage of customer retention cannot be met with out
creative thinking and effective planning and actions. The task of perfecting
the relationship between business and customer is always on going and
requires special dedication and innovation as the commerce markets
continually change and fluctuate. And over time, customers change, as does
their behavior and needs, and business must be able to respond to that.
Being on the cusp of the industry and always having a hand on the pulse of
the customer is the key for success. As the CRM initiative begins to take
hold, key players will soon see patterns emerge among customers, will
discover what a productive strategy is and what is not. This is the essence of
a successful CRM project: being able to really know what will work for your
customers, what satisfies them, and what keeps them loyal. The ability to
get an accurate gut feeling about the marketing campaigns, new products,
and the type of policies customers will respond to is invaluable. This kind of
customer knowledge only comes from really digging in and being savvy
about how you go about understanding the people that you hope will
continuously call on the services and products of your business. The ROI in
this case would be compelling indeed.
Chapter # 3. Industry/Company Perspectives
ITC WELCOMGROUP HOTELS
ITC hotels stepped into the hospitality industry in 1975 and are one of the
most upcoming hotel chains in its class. They started their first hotel in
Chennai and now they have 66 hotels across more than 50 destinations in
India. ITC collaborated with Sheraton hotels, which is a part of Starwood
hotels and resorts and is a well-known global hospitality chain. They were
the first ones to adopt this exclusive logo which has not been thought or
taken by anyone to match this – The “Namaste-Nobody gives you India
like we do”.
It is represented by four distinctive brands serving the needs of the
travelers, namely: -
• ITC Hotels – Super deluxe and premium hotels in strategic business

location.
• WelcomHotels – Five Star first class hospitality for business and

leisure travelers.
• Fortune Hotels and Resorts – Full service hospitality at mid-level

prices for business travelers and leisure travelers.
• Welcome Heritage – Palaces, forts, havelis, resorts and homes that

bring alive the history and romance of India’s heritage.
“In the year 1984, this group underwent a drastic change when their
occurred a paradigm make over in the entire Hospitality Industry. It was at
this point when there focus shifted from catering the Leisure Travelers to
Business Clientele in order to provide a feel of a working environment while
traveling all over the country. We feel that the hotels in the city fulfill the
leisure needs well, but there are very few to think out of the box”.
THE OBEROI GROUP OF HOTELS
The Oberoi Group of Hotel has played a leading role in the growth of the
hotel industry in India. The Oberoi group has the distinction of having
listed as members of the leading hotels of the world. Oberoi hotels today
operate the largest chain of luxury hotels with 30 hotels in 9 countries and
are rapidly expanding into new destinations around the world.
As the founder chairman Rai Bahadur Mohan Singh Oberoi started

off with a single hotel in Shimla in 1934, the group has diversified business
interests relating to the hospitality industry.
The Oberoi Chain currently runs 18 hotels in India and 12 hotels abroad.
CONCEPTION
The Oberoi, New Delhi was India's first modern, luxury hotel, when it was
opened in 1965. A member of the internationally prestigious leading hotels
of the world, today the Oberoi has undergone a multimillion dollar redesign
and offers every comfort and convenience to the international corporate
travelers.
Location: Dr. Zakir Hussain Marg, New Delhi- 110003,

25 minutes drive from the International Airport and 7 minutes from
Cannaught Place.
Class: 5 star Deluxe
Rooms: 290 sellable rooms with a proper writing desk with telephone
lines, a fax machine, internal and national direct dialing facility, a mini bar,
channel music, in house movies and luxurious bathrooms designed in
polished granite. In order to ensure personalized attention to all guests, an
exclusive butler service has also been introduced on all floors.
The Oberoi has 8 floors with even numbered rooms facing towards the Golf
Course (pool side) and odd numbered rooms facing Humayun's Tomb
(monument side).
Leisure Facilities: Health club, Swimming pool, Delhi Golf Club

facilities.
Special services: Bank, Barber Shop , Shoe Shine, Beauty Parlor,

Laundry, Drug Store, Flower Shop, Book Shop, Mercury Travels (ticketing
& car hire), Executive Center (Typing, Fax, Photostatting, Board room) etc.
Shops: Shopping Arcade located at the lobby level.
Restaurants and Bars:-
o Chinese Restaurant: The Taipan
o Thai Restaurant: Baan Thai
o Indian Restaurant: The Kandahar

Buffet and Continental Cuisine Restaurant:-
La Rochelle with 3 private dining rooms:
i)Fountainbleau
ii)Versailles
iii)Chantilly
Coffee Shop: The Palms
Confectionery & Delicatessen: The pastry Shop
Bar & Private dining rooms: The Belvedere
Tea Lounge: Club lounge
Banquet facilities:
i)Aravalli
ii)Vindhya
iii)Shvalik
iv)Nilgiri
v)TheCannaught
TAJ GROUP OF HOTELS
Taj group of hotels is the largest chain in India- with several Hotels abroad
also. The parent Hotel-The Taj Mahal Hotel, Bombay is rated among the 10
best hotels in the world.
The founder of the house of Tatas, Mr.Mansheti Nuser wanji Tata, in 1894
formed the Indian Hotels company and built the exquisitely beautiful Taj
Mahal Hotel in Bombay.
Taj has been operating in the USA, the UK, the Maldives, Oman and
Srilanka and the Taj Empire continues to expand further. Today Taj has 50
Hotels of which 48 are operational, 38 destinations and is the largest Hotel
chain in the country. Only one hotel group knows India and South Asia so
well, and does so with such consummate style. From its earliest days, taking
residence with The Taj Group has been a grand occasion. When The Taj
Mahal Hotel, Mumbai, opened in 1903, the event was described by The
Times, London, as “a resplendent debut”.
Taj Palace is Luxury Hotel under Taj Group of Hotels. It is ideally located,
10 minutes from the Airport, 10 minutes from down town situated amidst 6
acres of landscaped greenery; Taj Palace hotel offers convenience and
gentle ambience. The hotel combines attractive functionality with style in a
peaceful symbiosis. In Taj tradition, one finds congenial atmosphere of true
business hotel coupled with local handicrafts and a special emphasis on
cuisine. Taj Palace has 421 rooms and suites. Each Deluxe Business floor
room is a modern business centre. So too is their exclusive club floor
rooms. Within quiet reason, everything that one wishes is available round
the clock Taj Palace hotel including the finest cuisine in town. On request
in-room fax, E-mail facility, Laptop computer, background information on
major Indian industries, plus on line accessibility to world business
information is available. There are six restaurants and a bar in the hotel to
offer its guests. To name the few are Orient Express, Isfahan, The Tea
House of the August Moon, Handi and My Kind of Place ( Discotheque).
There are six Luxury Hotels which offer a whole of elegant living and upto
the minute business amenities, as a part of Rs. 300 crore upgradation
programme. All Luxury Hotels now have renovated rooms, a state of the art
Business Centre and a modern Fitness Centre. The Taj group also have
eight Business Hotels spread over different corners of the country. There
are 20 Taj Leisure Hotels out of which 16 are in India and 4 are abroad.
Today, The Taj Group is India’s largest and finest hotel chain offering 48
hotels in 34 locations across the subcontinent. This growth has been as
diversified as it has been impressive. In addition to superlative luxury
hotels, The Taj Group includes business hotels, beach resorts, palace,
garden retreats and other comfortable accommodation. Internationally,
The Taj Group has a few properties in key cities like London, New York,
Washington DC, Chicago and locations in the Middle East and in Africa.
The uniqueness of the Taj Group lies in the sum of its parts in providing a
living heritage of India, together with superb comforts and modern
facilities. All of these combine to make The Taj Experience a must.
Hotel is a place which offers boarding and lodging for a certain charge. The
concept has changed over the years from “Home away from home” to
“Office away from home”. Broadly speaking, the product which a hotel
offers falls into two categories:-
1. Accommodation - This includes Rooms, Food & Beverage.
2. Service - This is an intangible product.

Food & Beverage - which is also a perishable commodity like a room, are
served from different F&B outlets like restaurants, coffee shops, banquets,
room service, specialty restaurants, bars etc.
Accommodation
Further classification of Accommodation would make the range of

Products wider ; The Rooms could vary from a Standard deluxe room to
luxurious Presidential Suites which differ considerably in the facilities
offered and of course the Tag or Tariff on them. The banqueting facilities,
halls and conference rooms also come under the ambit of the Rooms
division.
Rooms that work smarter
The Taj Palace hotel has 421 guest rooms of which 381 are Deluxe rooms
and 40 are Suites. Guest rooms of Taj Palace combine modern facilities
with relaxing decor. Deluxe Business Floor Rooms are indulgently
comfortable whilst being, virtually, an office away from home. The Club
Rooms of Taj Palace offers guests a world of exclusive services and
privilege. The Club floor rooms provide personalized services to the guests
round the clock, comfortable large areas, and the conference rooms suited
to conduct private meetings of upto ten persons are just a few facilities to
talk about. Luxury Terrace Suites are spacious, individually appointed with
separate lounge, dining and work areas and a terrace garden. The Executive
Suite combines luxury and modern convenience for excellence.
The Standard rooms and deluxe rooms offer complimentary airport

transfer, complimentary breakfast, in-rooms fax machine and butler on
call. Both Standard and Deluxe rooms are now equipped with ‘Flecon
System’ through which the guest can regulate the air-conditioning and light
intensity in the room, obtain World Time and operate the night light at the
flip of a button. E-mail and Internet can be accessed in both the Standard
and the Deluxe Rooms.
In the days gone by, the invading armies came from the North-West. But
today they come from all over the world. New Delhi, India’s capital city is a
magnificent tourist attraction and important trading and commercial
centre. The Taj Palace Hotel is the most distinguished residence in New
Delhi for Heads of State and Corporations, Business tycoons and Luxury
tourists, offers a spectacular choice of accommodation.
This session would list below the product and services offered by Taj Palace
Hotel and what makes them unique from the rest of the hotel/s, whether it
is the rooms or the service.
The Taj Club
It is a known fact that a business traveler is a much pampered person

indulged with comforts and conveniences unheard of even a decade ago.
However a yearning has undoubtedly arisen for a special privilege, an inner
sanctum, an Exclusive Club. Born of desire, The Taj Group of Hotels
presents the Taj club which offers unique world of facilities and privileges,
both essential and extraordinary.
Broadly speaking Taj Palace has five categories of rooms:-
1. Standard Rooms
2. Superior Rooms
3. Deluxe Business Rooms
4. Taj Club Rooms
5. Suites Rooms
o Executive Suites
o Deluxe Suites
o Luxury Suites
o Presidential Suites
Business Centre
It offers several useful facilities 24-hrs a day, seven days a week. These
include Facsimile, Internet, E-mail, Color photocopying and legal library,
as well as laptops, city pagers and mobile phones on rental basis. Taj Palace
Business Centre is designed to give the best to the business community who
do require sophisticated communication facilities and other gadgets to stay
connected to the rest of the world while at the Hotel. With no exaggeration
it could be said that the guest gets the best of best services and facilities
which are more than necessary for a modern business man, and also feel at
home while at work. The hotel calls this concept “An office away from
home”.
Banquet Facility:
The hotel provides facility for orchestrating parties and banquets,

conferences, seminars and symposiums. Taj Palace has 11 Banquet halls
with a capacity of 15 to 1600 persons (Auditorium Style) or 15 to 2500
persons for Cocktails/ Receptions. It also has two huge Lawns to organize
Fork Buffet / Standing Buffet also for outdoor functions. The conference
aids includes simultaneous translations in 5 languages. The banquet halls
of various size, decor and interiors, capacity suit all kinds of occasions
including receptions, marriage parties, conferences, meetings, get-
togethers, cocktail parties and scores of other functions. The banquet halls
are very much flexible for various types of seating arrangements and set-
ups like Fish-bone, Theatre style, Class room style, Auditorium type etc. the
Banqueting facilities offered by the hotel could be matched to any other
competing hotels and is par excellence.
Food & Beverage:
The Food & Beverage Division accounts for roughly 30% of the total
revenue earned by the hotel. There are numerous Food & Beverage outlets,
but broadly they could be segregated into
F&B Outlets
Restaurants Coffee Shops Bars Room Service Banquets
Taj Palace has four Restaurants and one Night Club and a Bar. To name the
few are Orient Express, Isfahan, The Tea House of the August Moon,
Handi and My Kind of Place which is the discotheque and the hottest and
most wanted place in the city, especially among the youth.
Orient Express:
Orient express is the only restaurant in the country to feature in the “50
great Hotel Restaurants of the World”. It is a theme restaurant and the
entire set-up is that of a train and any guest who aboard Orient Express
would get lost in the sheer opulence of the legendary train, recreated down
to the minutest detail. The Exquisite delight the menu offers is savoured by
anybody with a palate for food. It also serves hard drinks and acts as a bar
for the hotel. Orient Express offers an excellent selection of premium red
and white wines, champagnes and house wines.
Handi:
The Handi is one of the most popular Indian restaurants in the Capital city.
The restaurant offers both ‘Ala carte’ and ‘Table-d- hote menus to its
guests. The hotel organises various food festivals (Indian) and takes Handi
as a platform for its promotional schemes. The decor and ambience of the
restaurant, coupled with the mouth-watering Indian speciality dishes
makes the dining experience a memorable one even to a gourmet critic. It
offers specialties from Northern as well as Western India.
My Kind of Place:
It is the most wanted Discotheque in the city and it is enjoyed by people of

all ages. The DJ plays music on request, which includes- Rap, Ragga,
Techno, Pop, Soft, Fast numbers and also Heavymetal on request. The
songs could be dedicated to anyone as desired by the guest. Food &
beverages are also served out here to rekindle the lost energy at the dance
floor.
Other Services & Facilities:
• 24-hour room service

• Free safe deposit lockers
• Express laundry/ dry cleaning
• Purified water supply
• Doctor-on-call
• Full-equipped Business Centre
• 24-hour fax/ telex facilities.
• 3 Meeting rooms
• Work station availability
• Laptops on hire
• Secretarial service
• Knight Rider on-line service
• Currency Exchange
• Travel assistance
• Car hire service

• 24-hour Coffee Shop
• 6 Restaurants & Bars
• Night Club
• 8 luxurious Banquet Rooms
• Shopping arcade
• Fitness Centre
• Beauty shop
• Arrangements made for golf and tennis
Chapter # 4. 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 Exploratory Research Conclusive Research

Components
Research Purpose General: To generate Specific: To verify
insights about a insights in selecting a
situation 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 Rigid, well laid out

procedures Procedures
Data Analysis Informal, Typically non- Formal ,typically

Quantitative quantitative
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:-
o Descriptive research
o 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.
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 bout 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

The definition of the problem includes the study of the topic “Customer
Relationship Management in the Hotel Industry”.
 DEVELOPING THE RESEARCH PLAN
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.
Limitations of the Study:-
• Due to the availability of only secondary data, authentication of the

data is not sure.
• Since the authentication of the data is not sure, the result of the
project may not be precise.
• Customer relationship management is in itself a complex topic;

therefore, there may be certain mistakes in the assumption.
Chapter # 5. Findings/Research
1. ITC GROUP OF HOTELS
ITC MAURYA SHERATON DEFINES CRM AS:
“Customer Relationship Management is a process of managing customer

relations in an organized way”. They aim at managing each “Moment Of
Truth” that is experienced by the customer.
There are various contact points where the hotel comes in direct contact
with the customer which are known as ‘Touch points’ in the CRM language.
These touch points are considered important as there is direct interaction
with the customer and they provide valuable input to the hotel. The input
provided by the customer has to be captured in such a way that it becomes
information and can be used by various processes within the hotel. 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.
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:-
o Field selling
o Loyalty Programs
o Distribution Points
o Web
o 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.
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. They also provide Leads and referrals. Leads are
potential customers with whom no contact has yet been made and learning
of potential customers from current customers is called Referral. 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.
Since the representative of the hotel meets the customer personally, he is
able to strike a chord instantly and has a fair chance of representing the
hotel. The difference between the customer and consumer is apparent at
this stage as, the person who uses the hotel is a consumer (guest) and the
person who helps him make this choice is the customer (link), this link, in
most cases, is the administration personnel who are responsible for making
reservations. So with 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.
The main objective of this is to maintain ‘one to one’ contact with the
customer on a regular basis and also to maintain reasonable visibility so
that whenever there is a requirement, the hotel is the most obvious
alternative for the customer to consider.
Loyalty Programs
Second vehicle for CRM identified by Maurya Sheraton are the Loyalty
Programs. These programs are designed to reward the loyal guests of the
hotel. Every time a guest checks in the hotel at his every touch point or
interface with the hotel, every time he spends on a service provided by the
hotel (use of Room, Restaurant, Laundry, Telephones etc.), the transaction
is recorded at each individual point and is added to the final bill presented
to the guest at the end of the stay. 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. These accounts having the loyalty points
are unique to every guest. Therefore, 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.
The objective of having a loyalty programme is not only to make the guest
feel rewarded for his stay but also providing a chance to the guest to reduce
them at the hotel, they essentially “gross self” the other services which
would be used & paid by the guest. In case he redeemed (for example) his
points for a free stay, he would spend on the supporting services like
laundry, telephones, restaurants etc. and the revenue generated from these
could be earned by the hotel. Therefore, instead of loss of revenue by
providing free stay, they actually gain the revenue as well as certain
customers for life with the help of the loyalty. The Loyalty Program is
called welcome avail which is for the consumer. They have another loyalty
programme for the link. The administration personnel, who is called
welcome link, is motivated to provide more business to the hotel.
Therefore, the more the number of bookings the links gives to the hotel, the
more number of points are credited to his accounts which are again
redeemable at the hotel either by way of free stay or gifts. This is seen as an
important way to keep the source of business motivated towards a long
term relationship.
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. Therefore, 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. The information regarding all guest reservations is managed through
computer software, therefore, when a customer make calls to query about a
reservation, all his hotel usage history pops up in the system which gives a
chance to the executive at the reservations to instantly recognize the
customer and address him by his name. This moment of truth is
experienced by the customer with a feeling of recognition and feels it as
good service at the first touch point itself. The input or instruction received
from the customer at the stage is recorded in the reservation system for
further reference by the hotel operations. Therefore the wheel does not get
reinvented every time a standard instruction is to be followed. This leads to
removal of an irritant and that ultimately leads to a satisfied customer
willing to return.
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. It is used for both personal and business purposes. But ITC Maurya’s
focus is on the business side of using the web. 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. Since the web gives
a convenience and allows the access to information at any time, it is
considered as one of the vehicles for CRM. Though Maurya recognizes the
potential of this system and is in the process of evolving a filing automated
system where the reservations can be made by the customers on time and
also the confirmation is received back on a real time basis. Presently they
have an information portal which only allows the customer to request a
reservation which has to be checked manually by the hotel reservations and
then only the confirmations are given. This is a touch point of customer
relationship because a speedy and accurate response could win you a
customer. And since it is on an individual basis, it is more personalized and
customized because the customer puts in his preferences when requesting a
booking. Therefore, 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
Stages
Customer Pre-sale Sale Routine Post- Non-routine
Research Interaction Transaction sale Interaction Post-sale
interaction
Consumer Comparison of Order Routine On time/ End
Buying Hotel products placing information time settlement
behavior Payment sharing (new
Customization products/service Claims
Payment of products Order s, advisory processing in
patterns processing services etc.) times
Activities
Clarification of
Consumer FACs and Payment Investment
Profiles specific Processing specific
queries information
sharing
Short-term
payments/
redemptions
Accuracy Decision Speed Speed Accuracy
Comprehen- Making Accuracy Transparency Fairness
siveness Customization Delivery Speed
Scrutiny Transparency
Expected Benefits From e-CRM
Source : Raghunath S., Joseph Shields (2001, "Introduction of e-CRM in

Indian Hotel Industry, CRM – Emerging concepts, Tata McGraw
Hill,).
Call Centers
ITC Maurya has a Call center dedicated to servicing the loyalty programme
members. Here the customers can call in and find out about any
information related to their membership. Whether query relates to
accumulation or redemption of points, it can be accessed through these
centers. This facility has been outsourced by Maurya and is out of the
premises of the hotel. This has been done to service the quest in a most
personalized and efficient manner. Call centers can now even be accessed
via e-mail as it is the most cost effective and time effective way of accessing
information. Call centers are seen as CRM touch point because they usually
provide solution to a problem that is being faced by a customer. Therefore
the intangibles of listening, understanding and providing a solution to a
problem at the right time adds to the process of retaining the customer –
There is a rapport which is built between the customer and the
respondent which goes a long way in future correspondence with the
center.
OTHER INCENTIVES TO THE CUSTOMERS BY ITC

WELCOMGROUP HOTELS
Welcome Award - Rewarding Relationships
Welcome Award has earned the distinction of being India's premier and
most powerful frequent guest programme. The Welcome Award
programme recognizes customer as a business traveler and through its
strategic alliances with travel partners endeavors to build a rewarding
relationship customer.
As a Welcome Award member customers can earn 'Stars' on every aspect of
their business trip…hotel stays, business entertainment, Car rentals and
even air travel.
Welcome Link- Bring home the rewards
Welcome Link, India's most popular programme for key professionals

offers many value-added benefits. It is designed to help members in making
reservations for their company executives. For every materialized room
night booked by a member at ITC-Welcome group Hotel, points are earned
that can be redeemed for a wide range of rewards.
With Welcome Link, the member can look forward to many exciting
promotions and prizes coming their way plus an exciting range of rewards...
complimentary dining, free holidays, air tickets, car rentals and privilege
shopping with Citibank Diners Gift Vouchers countrywide.
Sheraton Plus- The art of fine dining with a special edge
Welcome group Sheraton Plus brings the pleasures of the palate, in a truly
rewarding manner. As a member, customers can savour the finest in
cuisine ranging from authentic Indian, Mughlai and Chinese specialties to
Continental fare in a selection of over thirty ITC-Welcome group
restaurants. From 24-hour coffee shops to the specialty restaurants such as
Dum-Pukht, Bukhara, Dakshin and West View, members get to dine and
entertain.
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.
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.
All this is done by creating a data base.
The Sales Process – Pre CRM and Post Implementation of CRM

Independent Database
Call Sales Security Credit Operations

Centre Agent Agent
-------------------------------------------------------------------------------
----
Database
Call Sales Security Credit Operations

Centre Agent Agent
Source : Chaudhuri Avijit, Shainesh (2001), "Implementing a

Technology Based CRM Solution". CRM – Emerging Concepts, Tata
McGraw Hill
2. THE OBEROI GROUP OF HOTELS
Customer Relationship Management Function has been prevalent in the

hotel industry since the inception of the concept of boarding and lodging.
The Oberoi has enjoyed a superior position regarding its core product
offering and supporting services. It has an excellent brand value which it
consistently reinforced by delivering exceptional services.
The Oberoi, over the years, has acquired an outstanding brand value which
would help sell the hotel solely on its name. Oberoi has a very loyal
patronage from its guests, which has ensured a high market share in the
high-end segment of the market, which they cater to. Oberoi has, thus,
been charging a premium for the value that its guests derive from its
services.
Till about five years back, The Oberoi did not have any competition and
sales and marketing team did not have to sweat it out to acquire and attract
potential clients. Today is a changed scenario. Because of globalization,
India has seen the entry of International hotel chains, there has been a lot
of pressure on the sales and marketing team to perform. Oberoi has seen
its market share eroding due to price wars and cost cutting amongst the five
star hotels. The loyal guests of The Oberoi have started switching due to
similar international standards of services available at cheaper rates. The
Oberoi is thus working hard to sell its services since the product has
become generic in nature.
CRM PROCESS AT THE OBEROI GROUP OF HOTELS
According to the Oberoi the terms-Customer Relationship Management

and Relationship Marketing are used interchangeably therefore they do not
have a separate CRM department as the outlining functions of the CRM
process are integrated in the Sales and Marketing operation.
They use a variety of after sales tactics for customer bonding and loyalty.
Co-operative and collaborative relationships with customers seem to be the
most prudent way to keep tracks their changing expectations and
appropriately influencing it. The Oberoi has ensured the above by the
various ‘end user’ and ‘booker’ programs such as (Starkov, 2006):
Top – The Oberoi Plus

This is an end-user program with an enrollment fee of Rs.575 only. It is
beneficial for guests who use the services of the hotel. Each time a guest
spends, he accumulates points which can be redeemed for any services of
the hotel. By enrolling and rewarding customers with the help of this
program, the hotel ensures that a greater bonding towards long-term
customer retention. They have also tied up with the airlines for
interchangeable redemption of points.
Connections – Bookers’ Program

Bookers are an important link in materializing an actual sale therefore they
need to be kept motivated to push the hotel when the reservations are made
by a corporate account. Each time a booker gives as reservation to the hotel
he gets credit points for that and which can be redeemed for gifts or any
hotel services.
Food Festivals
The Oberoi conducts various food festivals at its Restaurants. Regularly
and sends invitations to its more profitable Clients.
Tie-Ups
The Oberoi invites top clients like CEO, Managing Directors and key
decision makers of different companies to social evenings specially
arranged to further enhance the Customer relationship management
functions.
3. THE TAJ GROUP OF HOTELS
Taj group of hotels is the largest chain in India- with several Hotels abroad
also. The parent Hotel-The Taj Mahal Hotel, Bombay is rated among the 10
best hotels in the world
The founder of the house of Tatas, Mr.Mansheti Nuser wanji Tata, in 1894
formed the Indian Hotels company and built the exquisitely beautiful Taj
Mahal Hotel in Bombay. The doors opened in 1903 and has been a
landmark by the Gateway of India ever since.
In 1971, the 220 roomed Taj Mahal Hotels in Bombay was converted to a
325 Roomed hotel, and a multistory structure was built adjoining the
original property. In 1972, the Lake Palace at Diaper and Rambagh Palace
in Jaipur was linked to the Taj and a Chain was born. In 1974, a new
company was floated, which created the Taj Coromandel in Madras. In the
same year the chain broadened with the acquisition of fort Aquada Beach
Resort in Goa...
In 1976, Fisherman’s Cove was built which is 30 minutes drive from

Madras on the Bay of Bengal with a Private Beach. In the same year, the Taj
Group opened the Taj Flight Kitchen in Bombay, Catering to both domestic
and international flights.
In 1978, the glittering Taj Mahal was opened in Delhi, and this was followed
by The Taj Ganges in Varanasi after two years.
The1980’s was to see a rapid expansion of the group and the gigantic Taj
Palace in New Delhi was opened. The Shiv Nivas Palace at Diaper and TAC
(Taj Air Caterers) in New Delhi Airport were also opened. Followed by this
was the opening of Taj Residency in Bangalore, the Savoy Hotel in Ooty and
the Raj Mahal Palace in Jaipur and the Taj View Hotel in Agra.
Taj has been operating in the USA, the UK, the Maldives, Oman and
Srilanka and the Taj Empire continues to expand further. today Taj has 50
Hotels of which 48 are operational, 38 destinations and is the largest Hotel
chain in the country. Taj is only the only hotel group that knows India and
South Asia so well, and does so with such complete style. Earlier, taking
residence with The Taj Group has been a grand occasion. When The Taj
Mahal Hotel, Mumbai, inaugurated in the 1903, the event was described as
“a resplendent debut” by The Times, London.
Taj Palace is Luxury Hotel under Taj Group of Hotels. It is ideally located,
10 minutes from the Airport, 10 minutes from down town situated amidst 6
acres of landscaped greenery; Taj Palace hotel offers convenience and
gentle ambience. The hotel combines attractive functionality with style in a
peaceful symbiosis. In Taj tradition, one finds congenial atmosphere of true
business hotel coupled with local handicrafts and a special emphasis on
cuisine. Taj Palace has 421 rooms and suites. Each Deluxe Business floor
room is a modern business centre. So too is their exclusive club floor
rooms. Within quiet reason, everything that one wishes is available round
the clock Taj Palace hotel including the finest cuisine in town. On request
in-room fax, E-mail facility, Laptop computer, background information on
major Indian industries, plus on line accessibility to world business
information is available. There are six restaurants and a bar in the hotel to
offer its guests. To name the few are Orient Express, Isfahan, The Tea
House of the August Moon, Handi and My Kind of Place(Discotheque).
There are six Luxury Hotels which offer a whole of elegant living and upto
the minute business amenities, as a part of Rs.300 crore upgradation
programme. All Luxury Hotels now have renovated rooms, a state of the art
Business Centre and a modern Fitness Centre. The Taj group also has eight
Business Hotels spread over different corners of the country. There are 20
Taj Leisure Hotels out of which 16 are in India and 4 are abroad.
The Taj Group is India’s one of the finest and largest hotel chain which is
offering 48 hotels within 34 locations across the subcontinent. This growth
has been as diversified as it has been impressive. In addition to its
admirable luxury hotels, The Taj Group includes business hotels, beach
resorts, palace, garden retreats and other comfortable accommodation.
Talking about Internationally, The Taj Group also has properties in key
cities like London, New York, Washington DC Chicago and also at locations
in the Middle East and in African states.
The Taj group uniqueness lies in the sum of its parts in providing a living
heritage of India, together with superlative comforts and its modern
facilities. All of these things combine to make The Taj Experience a must.
DIFFERENT REWARD PROGRAMMES OFFERED BY TAJ

GROUP OF HOTELS TO ITS CUSTOMERS/GUESTS
1. Taj Inner Circle
Taj Inner Circle, the frequent guest programme, allows guests to earn
points whenever they stay or dine at The Taj. Guests can then redeem their
points for specially selected rewards like complimentary stays at Taj hotels,
resorts, and palaces.
2. Taj Epicure Plan
The Taj Epicure Plan is an optional add-on dining plan to the Taj Inner
Circle. Members earn Epicure points for expenditures incurred on food and
beverages, at participating Taj restaurants in India.
3. About the Taj Inner Circle
The Taj Inner Circle has three membership levels – Blue, Silver and Gold.
Customers/Guests join at the Blue level and start earning on their stay or
dining or both expenses at all Taj properties. To qualify for the Taj Inner
Circle Silver membership level, customer need to accumulate 250 points in
any continuous 60-day period i.e. spend Rs.25,000 (INR), excluding taxes,
in any continuous period of 60-days. Members who spend Rs.2,00,000
(INR), excluding taxes, in continuous 12-month period, will be
automatically upgraded to Gold status. Gold card members enjoy enhanced
privileges and accumulate points at a faster rate i.e. they earn at the rate of
1 point for every Rs.80 spent, excluding taxes. Gold and Silver card
members of the Taj Inner Circle also enjoy a host of privileges like easier
check-in check-out formalities, discounts and priority wait-listing.
4. About the Epicure Plan
The Epicure Plan, an optional add-on to the Taj Inner Circle, is an exclusive
dining plan that offers Taj Inner Circle members special privileges and
rewards for expenditures incurred on food and beverages, at participating
Taj restaurants in India.
Members of the plan receive a "Smart" membership card for instant

recording, updating and redemption of points. Taj Inner Circle Blue
members who opt for the Epicure Plan will be automatically upgraded to
the Silver level whereas members on the Silver or Gold tier will continue to
enjoy their existing membership levels.
Non-Taj Inner Circle members who wish to enroll on to the Epicure Plan
will receive a complimentary Taj Inner Circle Silver membership.
Membership is available at an annual fee of Rs. 2500, which is payable by
credit card, cheque, or demand draft (Drawn in favor of “Indian Hotels
Company Limited”). Alternatively, guests can make payments in cash when
applications are made directly at Taj hotels.
Enhanced benefits for Epicure Plan members
As a Silver level Epicure Plan member, one enjoys all the privileges
extended against the Taj Inner Circle Silver level membership. In addition,
the member also receives the following benefits.
Free couple entry to the following Taj discotheques on Wednesdays:

•Insomnia- The Taj Mahal Palace & Tower, Mumbai
•My Kind of Place- Taj Palace Hotel, Delhi
Free couple entry to the following Taj discotheques on Saturdays:
•T2- Taj Krishna, Hyderabad
Free couple entry to the following Taj discotheques on Sundays:

•Incognito- Taj Bengal, Kolkata
BENEFITS THAT CUSTOMERS ENJOY AS A SILVER & GOLD MEMBER
In addition to rewards, customers enjoy a host of privileges that have been

created to enhance customer’s experience at the Taj. From the moment
customer check in at any of participating hotels, they will be treated as a
very special guest, in more than one way:
o Customers will be greeted with flowers & fruits in their room

o Check-in & departure formalities will be easier, faster & flexible
o Receive special discount on rooms at Taj leisure hotels
o Avail of double occupancy at no extra cost
o Entitled to a priority wait-list.
5. Points Redemption
Epicure points can be redeemed to settle stay or dining bills at participating

Taj hotels in India. Points will be instantly deducted from the accumulated
points in the membership account. Members can even entertain or holiday
at exotic Taj hotels in exchange of Epicure points.
Redemptions for holidays are subject to availability and prior reservation.

Participating Taj hotels or restaurants can close out bookings for these
redemptions. Please note that only Inner Circle points can be accumulated
at Rambagh Palace, Jaipur. Epicure points cannot be earned at this hotel.
Taj Epicure Diners Club Card: Experience the art of fine living with this
exclusive card, guests can receive exclusive benefits across 43 Taj
properties and over 200 Taj restaurants.
Chapter # 6. Example of CRM Implementation

This is according to VisiGlobe solutions (for CRM):-
VisiGlobe offers variety of CRM solutions. These solutions can be ranged

from providing CRM software to providing turnkey solutions including
project management, software, training and support. Guest satisfaction is
the most important aspect of CRM approach of VisiGlobe. Guest requests
are continuously observed, services improved and provided seamlessly. On
the other hand, staff performance and guest satisfaction surveys are
tracked. It helps hotels to improve guest satisfaction at least 20%. This
increase provides a minimum of 5% increase in revenue.
Happy guest returns and advises
VisiGlobe is used for guest satisfaction survey, guest request and problems
follow-up, staff performance tracking, department performance tracking,
guest satisfaction in overall hotel performance. It has a direct connectivity
to PMS - Property Management Software. All available information in PMS
are retrieved directly into VisiGlobe.CRM and processed. A call center is
established. All reported problem and request are entered into the system
and dispatched to runner to solve the issue. Closed issues are instantly
closed in the system. All issue is solved timely. Each department manager
tracks related issues and if necessary, he can act immediately. This ensures
all guest problems are solved before he leaves. Some part of our CRM
solutions:
o Guest Recognition
To know more about guests and to serve better.
o Incident Tracking
Solving problems on time without leaving any un-solved issue.
o Rapid Responce
Priority required requests are tracked and solved.
o Improvement Analysis
To improve service quality and reduce cost.
o Guest Comment Card Tracking

To evaluate and analyze guests feedbacks.
o Relationship Marketing
Marketing through guest history analysed with requests and

comments.
o Facilities Maintenance
Planned room and property maintenance to offer problem free service.
o Communication Server
All requests are delivered to specific person on time via electronic
transmission.
CRM means different things to different companies. Just as customers are

unique, companies are unique. James Dunham, general manager, Travel
and Transportation for Siebel Systems, said, “Our customers apply CRM
tools differently depending on their businesses’ drivers. A property that has
optimized occupancy uses CRM differently than one with low occupancy
because their needs are different.”
Think of CRM as a way of life rather than a technology. Having said that,
today’s technical possibilities are a crucial enabler for doing a much better
job of embracing our customers than we ever could have in the past.
Structured databases, robust wide area networks and technologically aware
hotel guests are all part of the mix that has elevated the art of customer
relationship management. The technology allows us to do it better, but
without effective leadership in the hotel companies and buy-in from line
employees it remains only a good idea.
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.

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.
Figure 1 – GuestWare Enterprise Edition’s Preference entry screen.

Note Global Preferences denoted by red “G”.
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.
A corollary conclusion is that in order to manage preferences effectively,

you must limit the number of preferences you are willing to track to some
number that can be communicated across the enterprise. The GuestWare
Enterprise Edition (www.guestware.com) offers an interesting
enhancement to this strategy: The platform stores and communicates
global or universal preferences for the guest across all hotels in the
company (smoking or newspaper preferences, for example). Yet it also
supports the capture of local preferences, unique to the individual property,
so that a preference of room away from snowmaking appears at the ski
resort, but not the center city property.
Taking this approach to a deeper implementation than most hotels, the

Wequassett Inn of Chatham, Mass. (www.wequassettinn.com) sends
lifestyle data capture forms out to past guests during the off-season. The
responses are added to the guest history records in the resort’s Lodging
Touch property management system (www.hotelinfosys.com).
Each week the management team reviews the profiles of returning guests
prior to arrival and takes action accordingly. Some Wequassett guests
actually get items added to the dining room menu specifically for them
based on management using the captured data effectively.
Data Capture and Maintenance
In order to present information about a guest’s preferences to a guest

service agent, you first have to capture it and scrub it. As time goes on, you
also need to maintain it. A crucial consideration in capturing data is to
make sure that you have vehicles for data input from all plausible touch
points with the guest. Property-level personnel must have both a means
and an incentive to capture relevant data about a guest’s expressed
preferences.
Scrubbing data means standardizing the address and other crucial fields to
ensure mailability. Standardized data is crucial to support effective house
holding (the process of matching similar records into a single customer
master record or into creating a new master). A related requirement is
NCOA matching, periodically passing records through the National Change
of Address database, to identify people that have moved and told the postal
service, but not you. (And you always wondered how that pesky CD club
keeps finding you…)
A number of software vendors offer licensed or hosted solutions to data

hygiene challenges. Some are shrink-wrapped and some are large-scale
mainframe applications. Group 1 Software (www.g1.com), well established
in the gaming segment of the industry, offers a broad range of data quality
and CRM tools to optimize the mailability of every record in your system.
Finally, guest profiles and preferences change over time. A complete CRM
strategy needs a vehicle for updating the profile accessible to both the guest
and to staff.
Channel Integration and Consistency
Many of today’s consumers prefer to conduct transactions over the

Internet. As long as the Web-based front-end systems are integrated into
the other systems (PMS and CRS for example), this is a good thing for the
hotel enterprise. Some travelers would prefer to speak to a live reservations
agent, whether at the property or in the central reservations office.
The key thing for the hotel company is to ensure that the guest receives the
same recognition and differential treatment no matter what channel they
prefer to use to interact with the firm. Just as we strive to offer consistent
rate and availability from all channels, we must strive for consistent guest
recognition from all channels.
Likewise, as we work for channel integration in guest recognition, so must

we reach for it in service delivery. Integrating many of the various hotel
management functions at the database level is one strategy that has been
attempted by several industry stalwarts, notably M I C R O S -F i d e l i o
(www.micros.com) and Springer-Miller Systems
(www.springermiller.com). A new entrant to the market includes Enablez
(www.enablez.com), a Toronto-based provider of an integrated property-
level platform extending to spa management and ski lift ticketing as well as
the more typical PMS/ POS functions.
Another approach is to utilize best-of-breed applications with robust

interfaces. Manhattan East Suite Hotels’ (www.mesuite.com) MAGIC
(Marketing And Guest Information Center) effectively links the CRS, PMS,
CRM database and the Web site (see figure 3). This integration delivers a
single, integrated view of the customer and his needs across all 10 hotels
and all customer touch points.
Ranking and Discrimination
Some customers are worth more to your business than others and you need
to invest more of your scarce resources in the most valuable customers, and
less in the others. This strategy is perhaps the most difficult element of
CRM for hoteliers to accept, but it is absolutely essential. While the grand
tradition of hospitality is to value every guest and deliver outstanding
service to all of them, in practice it simply isn’t possible.
Furthermore, there are certainly toxic customers that are simply bad for
your business and you want to make sure they don’t come back. Ask any
casino about their black-list policies…certainly a legitimate form of CRM in
action. There are any number of ranking methods available to the industry,
among them frequency program production, recency/frequency/ money
(RFM) scores or simply number of room nights. Siebel’s Dunham said,
“Whatever scoring metric makes the most sense for your organization, you
must include a multi-channel strategy to advise the agent on the right
product bundle at the right price to that high- or low-value guest at the
right moment in order to cross-sell or upsell them. That is one way a
complete CRM strategy drives top-line revenue.”
Figure 3 – Screen shot from http://www.mesuite.com/member/Profile.cfm, the

Web front-end of Manhattan East’s MAGIC product, showing deep integration
of CRS, PMS, CRM and Web site, and also the ability for the guest to
maintain his own profile.
Part of your CRM strategy needs to be a means of ranking your guests to

identify the most valuable and then servicing them differentially. By
extension, you also want to identify low-value customers who are
potentially better customers, and offer them enhanced services as well.
Two-way Personalized Dialogs
This area is perhaps the most exciting and potentially rich CRM strategy
active today. Rather than relying on mass-market advertising or segmented
newsletters to members of a frequency program, this element pursues
personalized communications with customers as individuals, with content
specifically about the customer’s interests and preferences.
Most of these communications include a tangible and specific call to action,

encouraging the customer to do something with the communication, thus
establishing a two-way dialog. These dialogs serve both to reinforce the
connection between the firm and the customer and to provide opportunities
for more information and sales with the customer.
Chapter # 7. CONCLUSION AND RECOMMENDATIONS
CONCLUSION
Implementing an effective CRM solution is not complex. Adequate

planning, effective communication, stakeholder involvement and mistake
avoidance will ensure that your initiative gets off the ground easily.
From this study, we can conclude that all the three leading hotels – ITC,
Oberoi and Taj are following organized and well established CRM
practices. They have realized that a happy and satisfied customer is a
retained customer and that’s the key in creating superior brand equity and
better returns.
ITC HOTELS
At ITC, the management has identified ‘data capture vehicles’ or ‘touch
points’ (as they call it) - like loyalty programs, reservation systems and call
centers to maintain a data bank of their customers and to access the
information as and when needed. This helps in providing quicker and more
customized solution to queries and complaints, if any and also helps in
building a rapport between the hotel executives and the customer which
goes a long way in satisfying and retaining the customers, building a
superior brand image and turning them into loyal patrons. Ultimately, this
leads to measurable & substantial returns to the hotel.
Other benefits extended to the loyal clients of ITC include Welcome Award,
Welcomlink, Sheretonplus which are aimed at rewarding the regular
clientele of their patronage and building a better relationship with them.
THE OBEROI
The brand value that The Oberoi has created for itself is a result of its
consistent delivery of exceptional services to its customers. Traditionally, at
The Oberoi, CRM and relationship management has been considered to be
a single function, but to maintain its market share and fight the competitive
situation, the marketing department at The Oberoi is now focusing on
building co-operative and collaborative relationships with the customers
with the result that they have a loyal patronage from their guests, and are,
thus, able to charge a premium for the value given to the customers.
The CRM programs at the Oberoi include The Oberoi Plus for the
customers and also for the Bookers to motivate them.
The Oberoi also organizes Food Festivals regularly and sends invitations to
its regular clientele and the top CEOs, MDs and business people to further
enhance the CRM functions’ effectiveness.
THE TAJ
The Taj Group is also investing heavily on CRM systems to maintain
customer databank with their profiles to give a quicker and personalized
service to their loyal clientele. The Taj gives high priority to guest
satisfaction.
They even have an SMS service to keep track of lost/missed calls by the
customers while they are away.
They have employed applications like PMS, CRS and CIS to keep track of
customers’ profiles which includes information such as their spending
patterns and their special needs also. They employ data mining technique
to get and act on data and also give credit to the employees who get
compliments from the guests.
Other reward programs include Taj Inner Circle and the Epicure plan to
give the customers a host of privileges as silver and gold card holders.
The challenge is to balance between the long-term goals and short-turn
gains.
Some key learning’s are:
 Long turn, profitable relationships can be built when both, the service
provider and the customer, rise above the 'transaction' approach, and
work in an atmosphere of mutuality and trust.
 Relationships, like real life, goes through ups and downs, and it takes a
great amount of maturity and courage to handle the 'lows'.
 Relationships provide 'security'. Strategic bundling of services is a useful

methodology in this context.
 Top management must be committed to the relationship, as their

example is followed throughout the organization.
 Cross functional teams are required to meet the goals, especially where
quick responses are required.
RECOMMENDATIONS
In this era of globalization where ‘Customer is the King’, customer

expectations are going up which is making the situation more and more
competitive. As the product is becoming generic in nature, the hotel
industry can no longer rely on the traditional marketing strategies to retain
the customers.
Customer Relationship Management is one of the key tools to fight this cut
throat competition and stand out as a superior brand.
On the basis of the study, I would like to recommend some suggestions

which could be implemented profitably by the industry.
1. 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.
2. Maintaining suggestion boxes at every touch point/point of

interaction with the customers.
3. Taking feedback not only from external customers but also the
internal customers i.e., the employees.
4. Proper check on the hotel staff’s and processes’ efficiency by the

management, say by employing Mystery Customers.
5. Keeping regular track of the sales data for further leads and follow-
up
6. Employing effective CRM software to improve guest satisfaction,

lower operating costs, build guest loyalty, and increase revenues.
7. 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 pick-
up and drop facilities.
8. 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.
9. Giving recognition awards to attract old customers.
10. Giving the customers a more personalized and empathic services as

building good rapport with the customers goes along way in having
satisfied and return customers.
BIBLIOGRAPHY
Starkov, Max (2006) e-CRM Strategy in Hospitality, from

http://www.hospitalityebusiness.com/hr/hr102104121407.html
CRM: How to keep your travel customers? from

http://www.hotelmarketing.com/index.php/content/article/061101_crm_how_to
_keep_your_travel_customers
The Loyalty Momentum Effect from

http://www.crm2day.com/library/EpApuEAFEEiQzpQOUf.php
Robin Trehan (2005) e-CRM and e-Business: How it Can Be Synergized in the
Hospitality Industry from http://www.hotel-
online.com/News/PR2005_3rd/Sep05_eCRM.html
Berry, L.L. (1983), ‘Relationship Marketing’, in L.L. Berry, G.L. Shostack and
G.Opah (eds) Emerging Perspectives on Services Marketing, pp 25-28
Bob Thompson (2004) - What is CRM? from www.frontline.com
Christopher Lovelock (2005) - Services Marketing; A European Perspective.
Claycomb, C. and Martin, C. L. (2002), ‘Building Customer Relationships; An

Inventory Of Service Providers Objectives And Practices’, Journal Of Services
Marketing, Volume 16, Number 7, p 615-635
Hart, Susan, Hogg, Gillian and Banerjee, Madhumita (2002), “an Examination of
Primary stakeholders’ opinions in CRM: Convergence and Divergence?” Journal of
Customer Behaviour, 1, pp. 215-240.
James R. Rosenfield (2005), Customer Relationship Management - A Brief

History and a Big Mystery from www.jrosenfield/articles/CRM- History.htm
Jay Curry (2006) - Key to CRM Success for Small and Medium-size Enterprises,
from www.customermarketing.com
Jill Dyche (2004) - The CRM Handbook; A Business Guide to Customer

Relationship Management
Jon Anton (2005), CRM - Making Hard Decisions with Small Numbers
Key Note (2003), Customer Relationship Management Report, Second Edition,

Middlesex, Key Note Ltd.
Kothari C.R. (2003) Research Methodology: Methods and Techniques, New Age
International, New Delhi
Lemon, Katherine N, White, Tiffany Barnett and Winer, Russell S. (2002),

Dynamic Customer Relationship Management: Incorporating Future
Considerateions into the service Retention Decision” Journal of Marketing, 66
(January), pp. 1-14.
Mohan Babu (2003) - Business Intelligence - Into the Mind of the Customer, IT
People, Express.
Rama Mohana Rao, K. (2005), Services Marketing, Pearson Education
Schneider B. and Bowen D.E. (1999), Understanding Consumer Delight and

Outrage”, Slogan Management Review, vol. 41, pp. 35-45.
Abbey J.R.,(1999) "Hospitality Sales And Marketing", Third Edition, by Ah & LA,
North High Street, Michigan.
Chaudhuri Avijit, Shainesh (2001), "Implementing a Technology Based CRM
Solution". CRM – Emerging Concepts, Tata McGraw Hill
Raghunath S., Joseph Shields (2001), "Introduction of e-CRM in Indian Hotel

Industry, CRM – Emerging concepts, Tata McGraw Hill
Sheth, J. N. (2002), ‘The Future Of Relationship Marketing’, Journal Of Services

Marketing, Volume 16, Number 7, pp 590-592
Swift, Ronald S. (2001), Accelerating Customer Relationships: Using CRM and

Relationship Technologies, Upper Saddle River, New Jersey Prentice Hall.
www.guestware.com
www.ascenantone.com/CRM.asp
www.crmdaily.com/perl/story/22438.html
www.expresscomputeronline.com/20030623/newsan1.shtml.
www.researchandmarkets.com/reportinfo.asp?cat_id=53&report_id=3929
www2.roanoke.com/columnists/shareef/5249.html
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CRM in Hotel Industry 1

Chapter # 1. Introduction to the Project Topic

1.1 What is Customer Relationship Management (CRM)?

Today, businesses are facing an aggressive competition and they have to

“Customer is the most important person for a business. He is not an

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

According to Chaudhuri and Shainesh (2001)-A CRM programmer requires

any business to know that how to differentiate customer treatment

Generally speaking, the five needs of customers are:-

The adoption of CRM in the hospitality industry has been impeded by a

1.2 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?

1.3 Scope of the Study

1.4 Objectives of the Study

The primary objective would be:

• To study “Customer Relationship Management in the Hotel

The other objectives would be:

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

Finally to conclude the findings and suggest any recommendations

2.1 Evolution of CRM

Customer Relationship Management (CRM) is one of those magnificent

2.2 In the beginning…

2.3 Advances in the 1990’s

In the 1990’s companies began to improve on Customer Relationship

2.4 About Customer Relationship Management - CRM

The generally accepted purpose of Customer Relationship Management

In today's competitive business environment, a successful CRM strategy

Major areas of CRM focus on service automated processes, personal

There are three parts of application architecture of CRM:

1. Operational - automation to the basic business processes

3. Cooperational - ensures the contact with customers (phone, email,

Operational part of CRM typically involves three general areas of business.

Integrated CRM software is often also known as "front office solutions."

2.5 Importance of Customers

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

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

2.3 Four Parameters to Measure CRM Success

a) CRM's ability to impact corporate strategy:

b) Successful technology integration:

c)Enhanced strategic partnerships:

d) Assimilation of CRM related technologies:

2.4 Return on Investment (RoI) of CRM

Rigorous financial scrutiny of all Information Technology IT) investments

Factors to be considered while calculating RoI:-

1. Savings in the form of reduced use of time to manage customers and

CRM is an integration of contact management, sales automation, marketing

2.5 CRM and Technology

In CRM the important functions are collecting customer data, analyzing

The Components of Operational CRM:-

1. Customer Service and Support (CSS):

These applications basically automate the support and service functions,

2. Sales Force Automation (SEA):

3. Marketing Automation (MA):

Analytical CRM - How It Functions?

1) OLAP: Online Analytical Processing is one of the most popular type of

o Prediction: The use of historical data to determine future behaviors.

o Sequence: Sequential analysis identifies combinations of activities

o Association: Association analysis detects groups of similar items or

3) Click stream analysis: By analyzing the click streams of an internet user,

4) Rules based personalization analysis: These analytical tools are based on

customer. Rules based personalization most often involves rules that

5) Collaborative filtering: This is otherwise known as 'adaptive