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 wellenough 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

CRM in Hotel Industry

2

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.

CRM in Hotel Industry

3

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.

CRM in Hotel Industry

4

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

CRM in Hotel Industry

5

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 softand 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 softwarelicenses. 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. 2.

Operational - automation to the basic business processes (marketing, sales, service) Analytical - support to analyse customer behaviour, implements business intelligence alike technology

CRM in Hotel Industry

6

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)

CRM in Hotel Industry

7

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.

CRM in Hotel Industry

8

2.3 Four Parameters to Measure CRM Success 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.
a)

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.
b)

Enhanced strategic partnerships: For a good CRM implementation, there should be a co-ordinate effort among the different partners to the enterprise.
c)

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.
d)

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:-

CRM in Hotel Industry

9

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):

CRM in Hotel Industry 10

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) 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.
2.

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)
3.

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:

CRM in Hotel Industry 11

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. 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. 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.

o

o

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) 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

4)

CRM in Hotel Industry 12

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) 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 timeconsuming and costly traditional processes involving multiple verbal or written interactions. It provides control, performance, convenience and efficiency. (Chaudhuri & Shainesh 2001) 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.

2.

3.

CRM in Hotel Industry 13

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. 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) 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)

5.

6.

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

CRM in Hotel Industry 14

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. 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.
1.

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.
2.

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
3.

CRM in Hotel Industry 15

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

CRM in Hotel Industry 16

 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

CRM in Hotel Industry 17

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

CRM in Hotel Industry 18

ERP integration functionality: legacy systems, the web, third party external information Data synchronization functionality: mobile synchronization with multiple field devices, enterprise synchronization with multiple databases/application servers E-commerce functionality: manages procurement through EDI link and web-server and includes B2B and B2C applications Service support functionality: Worker orders, dispatching, real time information transfer to field personnel via mobile technologies (Rmana & Somayajulu, 2005)

Customer Service Call Center Software Help Desk Software

Partner Relationship Management Contract Management Software: Contract Management Software enables an enterprise to create, track and manage partnerships, contracts and agreements. Example: Upside Software, Accruent Software, diCarta, IMany.

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

CRM in Hotel Industry 19

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:

CRM in Hotel Industry 20

• 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

CRM in Hotel Industry 21

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

CRM in Hotel Industry 22

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)

CRM in Hotel Industry 23

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

CRM in Hotel Industry 24

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.

CRM in Hotel Industry 25

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.

CRM in Hotel Industry 26

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: facilities. Health club, Swimming pool, Delhi Golf Club

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: o Thai Restaurant: o Indian Restaurant: The Taipan Baan Thai The Kandahar

CRM in Hotel Industry 27

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

CRM in Hotel Industry 28

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. 2.

Accommodation - This includes Rooms, Food & Beverage. Service - This is an intangible product.

CRM in Hotel Industry 29

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.

CRM in Hotel Industry 30

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. 2. 3. 4. 5. Standard Rooms Superior Rooms Deluxe Business Rooms Taj Club Rooms 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”.

CRM in Hotel Industry 31

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, gettogethers, cocktail parties and scores of other functions. The banquet halls are very much flexible for various types of seating arrangements and setups 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

CRM in Hotel Industry 32

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

CRM in Hotel Industry 33

• • • • • • • • •

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

CRM in Hotel Industry 34

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. Conclusive research--intends to verify insights and help decision makers to select a specific course of action.

2.

Even though exploratory and conclusive research has distinct purposes, they both consist of the same research components. They differ only in terms of the degree of formalization and flexibility of the components illustrated in table below: Research project Components Research Purpose Exploratory Research General: To generate insights about a situation Conclusive Research Specific: To verify insights in selecting a course of action

Data Needs Data Collection Form Sample

Vague Open-ended , Rough Relative Small

Clear Usually Structured Relative Large

CRM in Hotel Industry 35

Data Collection

Flexible, No set procedures Informal, Typically nonQuantitative

Rigid, well laid out Procedures Formal ,typically quantitative

Data Analysis

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

CRM in Hotel Industry 36

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.”

CRM in Hotel Industry 37

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.

CRM in Hotel Industry 38

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 in Hotel Industry 39

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 o o o o Field selling Loyalty Programs Distribution Points Web Call Centers

Field Selling When a sales group or a marketing executive of the hotel makes a sales call to a corporate, then it is called Field Selling. Field Selling includes Prospecting which means searching and seeking for new customers. 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.

CRM in Hotel Industry 40

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

CRM in Hotel Industry 41

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.

CRM in Hotel Industry 42

VALUE CHAIN OF CUSTOMER INTERACTION IN HOTEL INDUSTRY AND POSSIBLE BENEFITS OF e-crm
Stages

Customer Research Consumer Buying behavior Payment patterns Consumer Profiles
Activities

Pre-sale Interaction Comparison of Hotel products Customization of products

Sale Transaction Order placing Payment Order processing

Routine Postsale Interaction Routine information sharing (new products/service s, advisory services etc.) Investment specific information sharing Short-term payments/ redemptions

Non-routine Post-sale interaction On time/ End time settlement Claims processing in times

Clarification of FACs and Payment specific Processing queries

Accuracy Comprehensiveness

Decision Making Customization Scrutiny

Speed Accuracy Delivery

Speed Transparency

Accuracy Fairness Speed 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

CRM in Hotel Industry 43

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

CRM in Hotel Industry 44

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.

CRM in Hotel Industry 45

The Sales Process – Pre CRM and Post Implementation of CRM Independent Database

Call Centre

Sales Agent

Security

Credit Agent

Operations

----------------------------------------------------------------------------------

Database

Call Centre

Sales Agent

Security

Credit Agent

Operations

Source : Chaudhuri Avijit, Shainesh (2001), "Implementing a Technology Based CRM Solution". CRM – Emerging Concepts, Tata McGraw Hill

CRM in Hotel Industry 46

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.

CRM in Hotel Industry 47

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.

CRM in Hotel Industry 48

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.

CRM in Hotel Industry 49

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.

CRM in Hotel Industry 50

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.

CRM in Hotel Industry 51

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 o o o o Customers will be greeted with flowers & fruits in their room Check-in & departure formalities will be easier, faster & flexible Receive special discount on rooms at Taj leisure hotels Avail of double occupancy at no extra cost Entitled to a priority wait-list.

5. Points Redemption

CRM in Hotel Industry 52

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.

CRM in Hotel Industry 53

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

CRM in Hotel Industry 54

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. 2. 3. 4. 5. Guest recognition Data capture and maintenance Channel integration and consistency Ranking and discrimination Two-way personalized dialogs

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

CRM in Hotel Industry 55

Guest Recognition Recognition means many things. A smiling face, recalling a preferred room type or a welcome back greeting are all common recognition experiences in the hotel industry. These are all typical recognition interactions between a repeat visitor to a given hotel and a front of house employee endowed with a hospitality work ethic. When recognizing a customer of the brand more so than of the hotel, the challenges expand geometrically, but so do the opportunities. Many of the multi-brand companies succeed in this area by training reception staff to acknowledge the guest’s participation in the multi-brand frequency program (i.e. I have your frequency program number on your reservation.), but that is only part of the story.

The trick is to get the relevant information in front of the line employees rather than keeping it locked up in an offline analytical database or centralized system not available to hotel personnel. If you want to impact service delivery, the information must be in the hands of line employees. An essential concept in discussing guest recognition is that of preferences. Capturing, retaining and making effective use of expressed customer preferences is the essence of guest recognition. You are not only acknowledging that the guest has a prior relationship with the enterprise, but you are able to do something useful for the guest with that knowledge.

Figure 1 – GuestWare Enterprise Edition’s Preference entry screen. Note Global Preferences denoted by red “G”.

CRM in Hotel Industry 56

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.

CRM in Hotel Industry 57

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 propertylevel platform extending to spa management and ski lift ticketing as well as the more typical PMS/ POS functions.

CRM in Hotel Industry 58

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

CRM in Hotel Industry 59

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.

CRM in Hotel Industry 60

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

CRM in Hotel Industry 61

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.

CRM in Hotel Industry 62

 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 followup 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 pickup and drop facilities.

CRM in Hotel Industry 63

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.

CRM in Hotel Industry 64

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.hotelonline.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

CRM in Hotel Industry 65

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

CRM in Hotel Industry 66

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 www.tajhotels.com www.itchotels.com www.oberoihotels.com www. crmguru.com www.visiglobe.com

Sign up to vote on this title
UsefulNot useful