Customer Relationship Management - Summer Palace - Case Study Example

Customer Relationship Management Name Student ID Course Instructor Date Executive Summary The hotel industry has changed significantly since the 1990s. Customers have changed in their behavior and preferences and the current market place has undergone massive growth. The changes are majorly caused by the advancement in technology and globalization. The internet has caused changes in the hotel industry market in various ways. Unlike in the past decades, consumers rely on reviews in deciding whether to choose the service of a certain company or not. Businesses in the hotel industry should therefore work hard to earn a good online reputation. In its relationship marketing, Summer Palace should focus on adopting the necessary technology so as to maintain an online engagement with its customers, so as to remain competitive in the current times. Customer engagement is important in customer retention and communication of new services. Social media platforms such as Facebook and Twitter would be an excellent way of interacting with customers. Customer Relationship Management Introduction In the last few decades, consumer behavior and preferences, as well the entire hotel industry marketplace have changed significantly. These changes have impacted how businesses in the hotel industry conduct business so as to remain competitive. Though slowly, majority of businesses are adapting to these changes. Summer Palace is an international hotel group that is planning to move from the traditional transactional marketing business and adopt a relationship marketing strategy. This paper seeks to discuss how the hotel industry has changed in terms of both the consumers and the marketplace, how these changes would have impacted Summer Palace's CRM strategy for relationship management, and provide a CRM Strategy that will provide summer palace with competitive advantage. Task A. How the Hotel Industry has changed since the 1990s Customers . With the impact of globalization, more consumers tend to value services that include connectivity other than the traditional services. There is a wide range of structural changes that have affected the trends in the hospitality industry. In the modern times, the population is more diverse compared to the past decades; there are more women in the labor force as compared to the olden times (Bloom, Garicano, Sadun & Van Reenen 2014). Also, the family composition is nowadays different. In the current times, families with children under the age of 18 have reduced significantly within the past three decades. Single-person homes have increased because more people delay marriages due to reasons such as education. Also, the issue of divorce is on the rise. Single people are good potential clients for hotels. On the other hand, single parents have low incomes, rarely eat out, and have low chances of traveling and becoming customers in the hotel industry. Consumer behavior is different in the hotel industry compared to the previously decades (Brotherton 2012). The current consumers tend to spend more time in social places that contribute to change in room setup in the hotel industry (Hotelmarketing 2013). Most guests prefer to sit on comfortable couches as they use their computer, phones, or tablets. Also, the current generations of guests tend to spend differently. Most of them tend to prefer spending less money for a room, but more money for dinner and entertainment. Marketplace The hotel industry has undergone massive growth, and the business is expanding rapidly. In the current market, rankings matter. So as to survive the current competition in the hospitality industry, businesses should work hard to earn a good rank. The internet has changed the market for the hotel industry in diverse ways. People spend a lot of time searching for options and weighing the advantages and disadvantages of each. In the current market, it is reported that over 90% of hotel customers rely on hotel reviews (Bharadwaj, Sawy, Pavlou & Venkatraman 2013). When customers leave negative reviews, it has a great impact on the future of the business. In the current times, online presence is of great significance in the hotel industry. Hotel business should work hard to earn a good online reputation. Also, the profile of the business should be impressive to the consumers. Technology has changed the majority of things in the industry. Those businesses that have survived this digital era had to invest heavily in technological change. Most of the activities that were conducted manually in the past decades are now automated. The philosophy for success in the hotel industry includes knowing the needs of the consumers. However, in the current market, the rapidity of change in consumer behavior has made it difficult to anticipate consumer behavior. How Consumers change would have impacted Summer Palace's CRM strategy The management of Summer Palace's CRM strategy and practices is planning to adopt a relationship marketing focused business to replace the older transactional marketing business. The current changes in consumer behavior in the hotel industry would have impacted the Summer Palace’s CRM stratagem and practice. Considering the changes consumer behavior, Summer Palace will have to adopt approaches that will make its customers keep coming back. The cost of acquiring new clients is more costly compared to keeping old customers. In the current times, it would be more beneficial for Summer Palace to put extra effort in maintaining the existing clients other than looking for new ones. Communicating with the customers frequently and inviting them to follow the business on social media is a great way to keep in touch with the clients (Hollensen 2015). So as to achieve customer loyalty, Summer Palace should focus on providing services of high quality. Addressing customer dissatisfaction offers a great opportunity for improving the services offered to a business. Considering that majority of the current customers rely on reviews while selecting holiday destinations, Summer Palace should maintain a positive attitude to all customer complaints. Loyal customers provide a good basis for adverting, by recommending the business to other people. The majority of consumers would not seek service from a business for a second time if their first experience got botched. Summer Palace should constantly study changes in consumer behavior so as adapt to these changes. Summer Palace should consider investing in in-room technologies that will accommodate consumer preferences and make their experience distinct from those provided during the analog times. Since consumers in the modern days seek for interactivity and diversity, Summer Palace should focus on providing a diverse environment for its customers. How Marketplace changes would have impacted Summer Palace's CRM strategy There are many parts that play a significant role in relationship marketing. Marketing is a system, so as to conduct effective operation; the system should be operated in a way that wholly integrates the most significant parts. Due to current technological advances that have greatly affected the hotel industry; relationship marketing strategy should involve constant online presence. The majority of consumers in the current world relies on the internet for business information (Boella & Goss-Turner 2013). Considering that majority of people are online, this strategy will play a significant role for Summer Palace in its relationship marketing strategy. An online presence will be very significant for Summer Palace as it will reinforce its brand and what the business provides to its consumers. Once Summer Palace has communicated with its customers, there will be a need for online presence that portrays why the services the business offers are the best. It attracts new customers even those who have never visited the business before. Social media plays an excellent role in online presence. It allows free engagement of clients via the channel. Although not all social media channels would be of significance to Summer Palace, there are a number that would bring remarkable change. Social media channels such as Facebook, Twitter are excellent platforms for relationship marketing (Bloom, Garicano, Sadun & Van Reenen 2014). Once the social media of interest has been established, it is important to choose wisely the kind of content to share on the channel. Engagement is the key to brand promotion. It makes the company attractive to the current customers. If a positive social activity is present, the friends of the company’s followers will get exposure to the brand, and get influenced to seek its services. Task C: CRM Strategy that will provide Summer Palace with Competitive Advantage Transactional marketing refers to a business strategy that puts major focus on single sale position. Relationship marketing refers to a marketing strategy that focuses on development of consumer relationship, loyalty, for long term benefits. This strategy puts focus on efficacy and maximization of single sales rather that development of consumer relations (Verma, Sharma & Sheth 2015). The customer journey refers to a simple expression of the multifaceted thought process of a consumer seeking for a service. Different consumers undertake different journeys and connect with a brand distinctly. A customer gets aware of a product or services, considers purchases, retains, and advocates. So as to succeed, Summer Palace should aim at fostering relationship at every stage of the steps of consumer journey. Awareness would be best created through online presence. For the purchasing option, Summer Palace would aim at provide easy receipts such as on the website. There are ways in which Summer Palace would retain its existing customers. The company should focus on maintaining positive social proof. Also, in most cases, people prefer the thing that resemble their preferences in one way or another (Rosman & Stuhura 2013). So as to attract the target group, target customers should be identified then develop a brand message that addresses their struggles, objectives, and aspirations. It is more effective to cater for the existing demands than to establish novel ones. For instance, it is likely that if clients do not like how Summer Palace sells its services, they would never come back to the company for a second time. Messages sent to customers should be persuasive so as to convince the customers that Summer Palace will provide services that are not provided anywhere else amongst the available choices. Advocacy is a significant step in the journey of customers. Word of mouth is the most effective way to advocate for a brand. Total online presence is what Summer Palace should seek to achieve. Email marketing would be a great achievement with the current rate of technological advancement. Summer Palace should concentrate on establishing email subscribers that are eager to hear from the company. Free eBooks and newsletters should occasionally be provided for subscribers. Mobile and location is a great way to assess consumer behavior before sending promotional messages to customers (Coelho & Henseler 2012). Most customers read contents, search for services by us of mobile devices. Mobile specific ads would assist Summer Palace to get to its target groups. An excellent website provides the client with the required information. Existing clients will utilize Summer Palace website to acquire instant information, whereas prospective clients will utilize the website in making a decision as to whether they would seek the company’s services. Conclusion This paper has discussed how the hotel industry has changed in terms of both the consumers and the marketplace, how these changes would have impacted Summer Palace's CRM strategy for relationship management and provided a CRM Strategy that will provide summer palace with competitive advantage. So as to remain competitive in the current world, businesses in the hotel industry should adopt to the rapid changes both in consumer behavior and marketplace. Majority of people are online and seek for services from the internet. Summer Palace should focus on building a good online reputation. Negative customer reviews would easily lead to business failure. Customer retention would be a great achievement for Summer Palace. Loyal customers are effective in marketing a business through word of mouth. Bibliography Bharadwaj, A, El Sawy, OA, Pavlou, PA & Venkatraman, N 2013, ‘Digital business strategy: toward a next generation of insights’, Mis Quarterly, vol. 37, no. 2, pp. 471-482. Bloom, N, Garicano, L, Sadun, R & Van Reenen, J 2014, ‘The distinct effects of information technology and communication technology on firm organization’, Management Science, vol. 60, no. 12, pp. 2859-2885. Bloom, N, Garicano, L, Sadun, R & Van Reenen, J 2014, ‘The distinct effects of information technology and communication technology on firm organization’, Management Science, vol. 60, no. 12, pp. 2859-2885. 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