CRM

The Fundamentals of
Customer Relationship
Management in a
Hospitality Setting

Part 1: Defining CRM

CRM Definition
 “CRM” vs “CRM System”
• CRM = Customer Relationship Management = Includes ALL aspects of a
company’s relationships with its clients / customers
• This has always existed around, especially, service industries

• CRM System = the online IT system/software

• Defined about 3 decades ago, with emergence of first CRM technology (Siebel
Systems Inc.)
• EXAMPLE SYSTEM = Revinate

• The two terms often used interchangeably

 Introduction: The CRM Concept

INFO + TECHNOLOGY → CRM “centralized hub” System

Insights + Ideas

Improved business-customer relationships & business practices

Customer Acquisition | Customer Retention

Customer Loyalty | Customer Profitability
 CRM Types
Parts

OPERATIONAL ANALYTICAL COLLABORATIVE

NB: These different parts fit together in one system

i.e. A company does not choose only one

Each part allows us to GENERATE INFORMATION

OPERATIONAL CRM: Processes
• = “FRONTLINE CRM”
• Information gathered during day to day processes, such as PMS / HOS, etc.
• Automation of these processes where possible
• Should be dynamic – utilizing technology to improve daily business processes (e.g.
transaction processes, data collection, etc.).
• Leads to a steady flow of incoming information → Better communication with customers
• Examples: A system that logs customer communications, enquiries, reservation
fulfilment; automates digital marketing strategies (based on sequences and cookies).
Detailed guest profiles → segmentation → targeted and specific marketing
(Marketing PDF)
• Increased business for
other hotel constituents
• Increased revenue
 CRM Parts

OPERATIONAL ANALYTICAL COLLABORATIVE

ANALYTICAL CRM: Information Analysis
• = “BOTTOM-UP CRM”
• Builds on Operational CRM → analyses obtained information → determine
new/improved strategies and tactical decisions.
• Practical examples:
• Looking at respective guest histories to understand behaviour upon arrival and departure
• Feedback in terms of guest requests can be analysed and used to adjust/fine-tune marketing
strategies

• Used to better predict customer satisfaction → customer loyalty and reviews

 CRM Parts

OPERATIONAL ANALYTICAL COLLABORATIVE

COLLABORATIVE CRM: People
• = “TOP-DOWN CRM”
• Collaborative CRM often
• Inter-organizational sharing of customer information gathered refers to different
from beyond business boundaries businesses
• Information comes from OUTSIDE the business collaborating, benefitting
• Sources: face-to-face meetings, conferences, emails, social from mutually useful
media. information
• Used to: • In hospitality, also refers
• Improve business processes to the different
• Adjust communications and marketing strategies
departments
• Cohesiveness within the business
collaborating
CRM
Information People
(Departments) Collaborative
Cycle: How do CRM
the parts fit
together? Business
Processes

Analytical
CRM
Operational Information
CRM
 In Summary: CRM Parts

OPERATIONAL ANALYTICAL COLLABORATIVE

I.T. System
CRM Parts

1
4 Customer

2 3
STRATEGIC = -centric
Approach
CRM

The
= Hospitality
Industry!
CRM Misconceptions
1. CRM = Database Marketing
2. CRM is a marketing function alone
3. CRM = “just” an IT system
4. CRM is only about loyalty schemes
5. Any company can implement CRM effectively
 CRM DEFINITION

CRM is the core business strategy that integrates

internal processes and functions, and external
networks, to create and deliver value to
targeted customers at a profit.
It is grounded on high quality customer related
data and enabled by information technology.
 Why CRM?
When you KNOW what
• Increase in CUSTOMER ACQUISITION, at a people want and where
LOWER COST they are, you can use
• Improves CUSTOMER SATISFACTION
Positive
better targeting
Knowing what makes a

• Higher CUSTOMER RETENTION and

feedback
guest happy is KEY
When guests are happy,
LOYALTY loop
they come back!

• Improves CUSTOMER LIFETIME VALUE → A loyal customer often

spends more and can
Increase in OVERALL REVENUE become an advocate
 Why CRM?
Some “in between the lines” benefits:
• Greatly improved business processes &
information flow Positive
• Better interdepartmental communication feedback
• Increased company cohesiveness & even loop
staff morale
• Improved employee satisfaction
 CRM Failure vs Success
• Key to business growth!
• BUT…50 – 80%
integrations FAIL
Let’s look at
Success
WHY? Factors
 CRM TMAN support

Success
Factors
Manage IT Defined CRM
structure strategy

Main
reasons
for CRM
success
Cultural
Skillful staff
Change

Inter-
departmental
Integration
CRM FUNDAMENTALS

AT THE END OF THE DAY:

Customer Relationship Management is about
RELATIONSHIPS!
A CRM SYSTEM ALLOWS:
Creation of new guest profiles and access to
information that allows for
RELATIONSHIP BUILDING
Q&A
Up Next:
• Hospitality consumers’ behaviour
• When, why and where they book
• Pre-, during- and post-stay activities