Customer Relationship Management (CRM) in the Hotel Industry - Case Study Example

RELATIONSHIP MANAGEMENT (CRM) IN THE HOTEL INDUSTRY Answer A: Hotel industry all over the world has evolved since 1990s until now in terms of consumers and marketplace. However, the importance of customer relationship management (CRM) remains there for the hotel industry despite of the changes. “Customer relationship management (CRM) is a management strategy that unites information technology with marketing” (Ueno 2006). Managers of hotels and restaurants are focusing on proper CRM, as it is the key to customer retention. As Rossell (2011) states, “the customer relationship management process also tracks customer behaviors so that you can clearly identify and act on customer motivation that is unique to your client base”. To nurture the stability of a hotel in today’s global market, managers need to respond effectively to the changes in CRM that have taken place in the last couple of decades in order to remain connected with the customers. As Roberts (2004) states, “in the 1990's companies began to improve on Customer Relationship Management by making it more of a two-way street”. Let us discuss how hotel industry has taken a shift since 1990s until now both in terms of consumers and marketplace. Changes With Respect To Consumers Hotel industry all over the world has taken a major shift since 1990s. If we talk about the changes with respect to consumers, we can say that hotel industry has changes changed significantly. For example, earlier managers of the hotels used to prepare limited range of food items that could satisfy the needs of local people. However, after 1990s the trend of immigration started finding a strong place all over the world, which resulted in grouping different cultures together. This change forced managers of hotels to prepare a wide range of food items to satisfy the needs of people belonging to different cultures. Another change that has taken place is regarding communication with the customers. Earlier, managers hardly used to focus on maintaining a communication link with the customers. They only focused on providing some limited services to the customers. However, from the last couple of decades managers have started focusing on developing long-term relations with the customers. Therefore, they have started reaching the customers through different channels to establish a strong customer/hotel relationship. Changes With Respect To Marketplace Before 1990s, hotel industry was not so big and evolving as it is today. For example, at that time the idea of opening franchises in other countries was not very gripping and trendy. Managers of hotels used to focus their attention towards the consumers living in any particular area or location. They used to prepare the food of the choice of the consumers of some particular locations. Moreover, they used to market new food items and meals in some particular locations. After 1990s, the idea of opening international branches started to find a solid grip making managers of many hotels think towards going global. This idea also brought up many other changes in the hotel industry. For example, managers of hotels have started marketing their products and services to international consumers in order to attract them. “The 90s truly saw CRM technology and software evolve out of simple database marketing” (Koble n.d.). Answer B: Let us now discuss the ways the above-mentioned changes in the hotel industry with respect to consumers and marketplace would have influenced Summer Palace’s CRM strategy and practices. Meeting the Needs of Diverse Customer Base First major change in the hotel industry is the culturally diverse customer base. As Summer Palace hotels are currently operating in more than 50 countries around the world, its management authorities has implemented such CRM strategy, which meets the needs of all types of customers. The reason behind this strategy is to satisfy the group’s culturally diverse customers. Giving the customers what they want is one of the basic needs of proper customer relationship management in hotel industry. To remain competitive in the industry, the Summer Palace five-star hotel group focuses on providing high quality food to the customers. The managers of Summer Palace know that many other hotels are also providing food services in the same locations where Summer Palace group is operating. Therefore, the management officials have implemented the strategy to provide high quality food in comparatively low prices not only to retain existing customers but also to attract more customers and increase the customer base. This is a good way to serve wider geographical regions and remain competitive. Meeting Concerns Immediately Another thing that Summer Palace hotels do is that they act immediately to meet the concerns and complaints of the customers. Customer relationship management requires hotel management to serve customers’ needs in a polite manner. They know that politeness attracts customers and arrogant behaviors adversely affect the customer base of hotels. Therefore, Summer Palace hotels hire and train employees in accordance with the principles of CRM. Difference of Tastes Summer Palace hotels prepare food according to the taste of people from different societies. The management authorities of the Summer Palace group of hotels have implemented this strategy by observing the trend of immigrations towards developed countries. They know that people from different cultures have different food tastes and when they go to some other country as immigrants; they look for such hotels, which can provide them with their desired food items. Direct Mail Strategy To know about customers’ experience regarding the taste of food items and overall atmosphere of the hotels, the management officials send direct mails to individual customers. This is a good strategy of customer relationship management as it makes customers feel valued. The ever-increasing number of customers proves that the strategy is working well for the Summer Palace group of five-star hotels. Implementation of CRM Software Another change that Summer Palace hotels have implemented in their CRM practices is that they have developed a proper communication system in order to remain in contact with the customers. Before 1990s, we do not see such approach by any hotel to maintain customer/hotel relationship. Managers of the hotel have focused their attention towards keeping customers informed about the new developments as much as possible in order to make the customers feel valued. It is a fact that customers like to go for dining in such restaurants and hotels where they feel valued and respected. Therefore, Summer Group hotels decided to develop a proper communication channel using which they can send greeting cards, discount vouchers, and list of new food items to their customers. They send direct emails to the customers to which they can reply with their suggestions and even complaints about any particular hotel service. The customers do not have to wait for replies as the company replies to their emails just within few minutes. The company has implemented the use of efficient CRM software to keep the database of customers. Technology is a core aspect of customer relationship management and Summer Palace hotels are making an effective use of latest technology to reach their customers and keep them aware of all types of developments. Global Marketing If we talk about the changes with respect to marketplace, we can say that Summer Palace group is aware of the importance of global marketing that has arisen after 1900s. As Summer Palace group has their hotels in 50 different countries, they know the value of global marketing to reach global customers. As mentioned earlier, today one of the basic features of CRM is the effective use of technology. Summer Palace is using technology to advertise its new food items and services in accordance with the cultural values of different societies. As Miller (2012) states, “empowerment marketing should be at the heart of your CRM strategy”. For example, the commercials that Summer Palace group makes for the United States are different from the commercials that they make for their own country. Similarly, the commercials are different in other countries too and are developed in accordance wit their respective cultural and social values. This is a very good and effective strategy related to modern CRM as it makes customers feel the importance of their cultures. Modern CRM practices demand respect for all cultures and societies of the world. In addition, when we talk about the hotel industry, this respect holds even more value as the progress of this industry is related directly with the feelings and perceptions of the customers regarding the respect for their cultural values. Different Food in Different Countries Another change that Summer Palace group has implemented in its CRM strategy is regarding availability of particular food items. Managers of Summer Palace have implemented a strategy in which they place some additional food items in different countries in accordance with the dietary habits of different groups of people. For example, the group has made available pasta dishes in their restaurants located in Italy. Similarly, they have made available fish chips as a main food item in their restaurants in located England. It is a good strategy to improve customers’ cognitive evaluation of performance. These were some of the main changes that Summer Palace group of five-star hotels has implemented in its CRM strategies and practices considering the importance of integrating modern CRM practices to remain competitive in the global world. References Koble, M., n.d. The History of CRM Software. Available at [Accessed 17 September 2012]. Miller, M., 2012. The Right Strategies For 2013 – Part II. Available at [Accessed 17 September 2012]. Roberts, L., 2004. The History of CRM -- Moving Beyond the Customer Database. Available at [Accessed 17 September 2012]. Rossell, C., 2011. Discover Benefits of Customer Relationship Management. Available at [Accessed 17 September 2012]. Ueno, S., 2006. The Impact of Customer Relationship Management. Available at [Accessed 17 September 2012]. Read More