Customer Relationship Management in Hospitality Sector

Customer relationship management (CRM) is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy, and culture.” Basically everything is said within this statement. Customer loyalty decreases due to a multitude of channels and increasing transparency of the market. This is mainly due to the rapid growth of the Internet, economic globalization and comparable quality. Especially in the hotel industry, the basic product (hotel room) is very similar, when comparing the same quality level. The customers’ focus is more on the soft factors, like personal treatment and attention. It is identified that most failures to achieve CRM benefits are due to a lack of internal strategy. Treacy and Wiersema’s (1993) value disciplines form a good framework to build a customer-oriented and focused organizational strategy. Customer Relationship Management must not only focus on the existing and frequent customer base; it needs to manage all customers of the organization. Return on CRM investment will fall in place automatically after the base is set properly. Main drivers are increased customer satisfaction, an increased number of referrals and a decrease in marketing costs. Customer Relationship Management, particularly on hotel chain level, is very challenging but also very important, as the hospitality industry deals with perishable goods and needs to manage supply and demand with a sure instinct.