In the tourism and hospitality industry, failure and success of business, depends on services that they are provided to customers (So and et. al., 2016). Present report covers areas related to management of customer service operations, analyse its effectiveness in tourism or hospitality industries, managing the resolution of queries and complaints of consumers etc. In order to deliver higher level of customer service, this assignment will explore its fundamentals in context of tourism environment globally. For this assistance, report is divided into two main tasks, under which first part covers the components of CRM and second part defines how it creates value for hotels and their customers. The Pig Hotels of UK is taken which includes a collection of small lifestyle hotels and restaurants. By using concept of CRM model, employers of this hotel seek to expand its litter with three new open
Different components of CRM Model to build relationship with customers
“Customer Relationship Management” is a tool that is used for communicating choices and preferences of customers to its sales department. Thus, it should be managed by companies so that better services and facilities can be provided to its consumers in order to maintain customer relationship. Most of the companies are using typical CRM software for tracking needs and wants of customers (Zhou and et. al., 2014). In hospitality sectors like Pig Hotels, there is a high level of competition exists in the marketplace where each organisation seeks to augment its level of relationship with customers in high manner. In this regard, low level of switching costs and high degree of substitution assist hotel to develop an effective atmosphere of customer relations. Along with this, to achieve success and gain competitive advantage, firm must find ways to give best services to customers and exceed their level of satisfaction. One of the critical factors under achievement of business objectives and success, is process to create relationships with customers. Therefore, with this assistance, it is necessary for such hotels to develop an CRM model in order to compete intense competition at marketplace.
In context with Pig Hotels, it includes a chain of small lifestyle hotels and restaurants. Currently it wants to expand business market in upcoming three years by launching three more hotels on different-different locations. Thus, to achieve this objective, its managers have developed a CRM model to develop and manage interaction with potential and existing customers. This model is based upon value chain which creates a bridge between IT and marketing. It was developed by Michael Porter which suggest that using this model, hotel and tourism industries can build, manage and retain long term relationship with their customers (Van der Wagen and White, 2018). It helps in identifying all processes and actions which are involved in obtaining desired outputs from inputs. These outcomes are then offered to those customers who are at the end of line of value chain. In this regard, willingness of customers to acquire a particular product or service is termed as business value. Therefore, revenue for organisation is calculated as total value less than cost which has incurred by providing best services to customers.
There are several components of Customer Relationship Management and these are explained below for better understanding:
- Sales Force Automation:This is the component which is taken by most of the companies as it enables them in knowing forecasting, recording and processing sales as well. Other than this, it also helps company in keeping a track of important interactions.
- Human Resource Management:This department ensures that whether all skills and knowledge are according to the requirements or it is used as per the job profiles. Main purpose of HRM is to hire and select employees who are eligible enough for performing the task in a better manner without having any kind of problems. As a result, it will aid company in achieving targets and objectives in a specific time period.
- Lead Management: This majorly keep records of sales and distribution as well. Company gains most of the profits through sales, marketing and customer executive. Basically, it includes efficient management such as designing, campaigns, listing and other factors.
Components of CRM are mainly linked or can be said associated with various elements and this mainly includes acquisition, customer retention and enhanced consumer value (Ali and Amin, 2014). Different kinds of marketing application tend to attract a large number of customers whereas other analytical tools and data warehousing assist them in sustaining the loyalty of consumers with having better and effective communication system. According to importance of viewing CRM as a business strategies, there are ample numbers of data warehousing tool and analytical tools through which company can try to improve customer value amongst future and existing customers. Henceforth, it can be said that Customer Relationship Management plays a crucial role for improving the working structure of a company and it also assist firms in managing response of consumers in relation to products and services they are providing.
Examples of good practice within the Hotel sector:
It has been analysed that there are ample number of hotels present in all over the world who have different strategies to improve customer relations (Ye and et. al., 2014). It has also been found that developed strategies have also helped hotels in improving consumer loyalty as well at the same time. Some of the good practice carried out by hotel industries are given beneath as:
- Westin Prince Hotel : A chain of hotel which believes in revising their policies every quarter by taking feedbacks from customers about any sort of disabilities. For an instance, Hazel Tan Hotel have worked with Autism Ontario to revise policies to respond to the needs of guests with Autism and as a result have received repeat visitors and very positive feedback from ample number of patrons.
- Cambridge Hotel & Conference Center : This hotel have also developed a good practice which can be considered here as example. As they have developed a written policy in each department so new and existing staff know what to do when related to needs and requirements of guests who are physically challenged.Manager of this hotel have kept its focus on their own weaknesses and strengths which aid in finding the gap that needs to be filled for delivering better experience to customers.
Henceforth, these are some good examples of good practice which has helped business hotels in reaching to new heights in short period of time.
From the above discussion, it has been evaluated that satisfaction of customers plays an extremely crucial role within a business. It is taken as feedback of consumers who paid amount for acquiring a product or service. So, it determines success as well as converts into profit for the organisations. In context with service based industries like tourism, hotels or transport industries, success of their businesses is totally thrive on customer relations instead of quality of their services or products alone. Therefore, it is crucially important for hotels and tourism industries to create and maintain a loyal customer base to win competitive advantage at marketplace. According to Riley (2014), in hotel and tourism sector, CRM is not just a core customer services such as quality, pricing or delivery that services; it is also referred as friendly or problem-solving approach as well as the flexibility in options which make a large difference. It helps in exceeding the customer satisfaction which gives a company an edge over others because it enhances their perceived value towards products of hotel industries. Therefore, CRM is essential for all organisations especially tourism and hospitality sector as it helps in exceeding their customers’ expectations by enhancing core value of products or services.
Values created by CRM Model
Customer Relationship Management (CRM) includes various components and approaches that help in building a comprehensive database which contains all the information pertaining to targeted customers. In addition to this, it also facilitates long term growth of a company by forming strong connection with consumers. CRM is considered as a business approach which gives support to industries in conducting the processes related to sales, marketing and service, for maximizing profit margins. In hotel industries, this customer-centric approach has pioneer importance because it helps in retaining customers as well as building long partnership with them also (Maggon and Chaudhry, 2015). As per present case study which is based on The Pig Hotels consists a long chain of small hotels and restaurants, CRM model give support to its employers in creating value of its services. Small lifestyle hotels and restaurants which are connected with this hotel lie within two major groups – Lime Wood Group and Home Grown Hotels. All of these are focusing more on authenticity and informality of design, food and service. In order to gain high profitability and large market share, Pig hotel group wants to expand its litter with three new openings within upcoming two years.
CRM Value Chain Model includes a set of strategies which assists The Pig Hotels to follow while developing their CRM strategies. In other words, this model refers to a tool for managing customer relationship with the support of people associated with business, information technologies, portfolio or personal data of consumers and more (Tsai and et. al., 2015). Today, most organisations in hospitality sector, work on the principle of CRM because it aids them to deliver high value to customer as well as creates and manages the relationship of customers with its business in a more adequate manner. Therefore, five primary steps for long-lasting relationship with customers as per this model of value chain strategy are- Customer Portfolio Analysis; Customer Intimacy; Network Development; Value Proposition Development; Managing the Relationship. While supporting conditions for fulfilment value of this chain model are- Culture and Leadership; Procurement Processes; Human Resource Management process and IT/Data management procedures. Therefore, by developing this model, employers of The Pig Hotels can achieve its objectives i.e. expansion of business in other locations within next two years.
Therefore, five primary stages for implementing CRM value are stated below:
Customer Portfolio analysis: This is determined as the first thing which is to be performed by company so as to identify customers and their needs because consumers are the one who create values for the organisation. Therefore, in this stage, company analyse choices and preferences of customers (CRM Models, 2018). As a result, it assist firm in making strategies so that they can connect with customers more effectively. In this regard, through customer portfolio analysis, managers of The Pig Hotels can identify demand and purchasing power of each guest. By this process, they can develop strategies to fulfil their demand and get retention for long period.
Customer intimacy: It is the second stage under which company has enough information about customers in hand. This is the time when firm can generally interact or connect with customers or the ones who are most valuable for the organisation. Knowing them better will definitely assist managers of The Pig Hotels in providing effective services and facilities.
Network development: Network position of a company reflects the business connection of a company with its distributors, suppliers and all associated persons, who give their cooperation in delivering the value to targeted customers. It is considered as a source to gain competitive advantage. Therefore, for developing relationships with customers, it is essential for The Pig Hotels and other tourism organisations to create value for their customers at every stage of delivering services. In this regard, companies are required to create a strong network for its consumers to serve profitably (Zaitseva, Goncharova and Androsenko, 2016). It includes investors, suppliers, distributors, employees, technology and retailers.
Value Proposition Development: It is considered as fourth step of CRM value chain, where network plays an important role in serving and building the effective relationship with customers. Further, network develop by hotel industries like The Piglet Hotel help in creating a value proposition. In addition to this, each associated member in a developed network works with each together for creating value for customers.
Managing the Relationship: It is the final step of developing CRM model where completing above mentioned stages aids a company in creating the relationship with customers. Further, it is essential for such companies to manage and keep these relationships so that targeted customers, investors, business partners and all associated people will get value for the long term (Horner and Swarbrooke, 2016).
Benefits of implementing CRM strategies
- Enhance Sales Productivity:One of the main benefits Pig Hotel has got by implementing CRM strategies is improving and enhancing sales productivity. With the help of customer portfolio, this hotel can determine demand of each guests. Through this process, they can strategies to make connection with targeted audience and influence the to take services. In this regard, repetitive sales tasks such as sending e-mails, generating reports in automated manner, retention of customers and more are some current and future benefits as a company get through strategies of customer relationship management.
- Customer Retention: Due to presence of many hotels at same place, any product dissatisfaction tends to move away customers from one company to another. The other main reason for this is lack of personal relationship between company and its customers. Therefore, through customer portfolio analysis, The Pig Hotels can get opportunity to understand its customers and way to develop long lasting relationship with them. It will help in getting retention of loyal customers for longer period (Torres, Fu and Lehto, 2014).
- Wining Strategies: CRM models help in developing strategies such as cross-selling which involves providing customers services that augment original purchase as well as develop their interest in acquiring services of hotels. It also includes offering addition or upgraded services, like sightseeing packages which come under the category of up selling. In addition to this, CRM strategies also provide numerous benefits such as a two-day all-inclusive package on discounted rates for loyal and dedicated customers. Therefore, all such schemes help in increasing the sales through which The Pig Hotels can generate better revenues to achieve its objectives and goals in given period of time.
- Customisation: CRM software also allows The Pig Hotels and other industries to customize their products according to preference of targeted audience. They can customise products as per need of certain customers such as value for money is considered as main priority while for many others luxury as well as overall experience matter the most.
- Better Customer Support: Stages in CRM model like customer portfolio, intimacy, value proposition development, helps Pig Hotel in determining the demand of every guests. It aid managers in building an effective customer support system which provides assistance to develop connection with clients by phone, chat, e-mail and more (Bowie, Buttle, Brookes and Mariussen, 2016).
In present context of The Pig Hotels where role playing acts are being performed among staff so that to they gets trained related to setting priorities depending on the needs of clients. This is being considered as one of the main and best sort of training tool that has helped staff members in building relationships with customers. Hotel do not believes in offering theoretical training to its employees and puts different sort of situations where they can understand how to deal with demand of customers.
In present context, managers of Pig Hotel have developed good practice considering their vendors as great resources in keeping up-to-date on the most technological advances for accessibility (Manhas and Tukamushaba, 2015). This hotel has a good relationship with its suppliers, who give options and advice to make a decision regarding accessible upgrades. An instance is being taken to understand this sort of good practice where, many people who have low vision are not blind; they can see contrasting colors and images. Hotel working with number of suppliers to contrast their towels at the hotel to make things easier for people to see. In addition to this, CRM software creates a coherent and cohesive body of information which drives the value proposition for a given client also. As it provides opportunities to craft and execute unique sales strategies as per preference of customers. This software is proliferating the landscape on which managers are required to give training to employees. It would help in making workers familiar with new techniques and give support for improvement of sales performance.
CRM Model also aid hotel industries include Pig Hotels in improving its poor aspects of services. For example: If company take more time for check-in process then customers who give more importance to valuation of time, will tend to switch over from there. This will impact negatively on brand image of business. Therefore, using CRM software, managers of Pig Hotels can provide better services to its guests on time.
From this report, it has analysed that satisfaction of customers plays an important role in growth and success of business. In context with hotel and tourism or industries, through concept of CRM and its models, firm can exceed their customers’ expectations by increasing the aesthetic value of their services and giving opportunity for building effective interpersonal relations with clients. By developing CRM model, organisation can deal in hotels and tourism industries getting various opportunities to generate profitability. It includes interaction and retention of loyal customers, enhance sales performance, improve productivity of workplace etc. It provides ways by which companies can understand what their consumers want. Therefore, on the basis of this, such organisations can deliver them better services and exceed their level of satisfaction as well.
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