JAIPURIA INSTITUTE OF MANAGEMENT

PGDM-09

CRM IN HOTEL

INDUSTRY

GROUP- 6

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TABLE OF CONTENTS

INTRODUCTION

WHAT IS CRM

RESEARCH PROFILE

RESEARCH QUESTIONS

SCOPE OF STUDY

OBJECTIVE OF STUDY

LITERATURE REVIEW

EVOLUTION OF CRM

ABOUT CRM

PARAMETERS TO MEASURE CRM SUCCESS

CRM & TECHNOLOGY

APPLICATIONS OF TECHNOLOGY

INDUSTRY DEFINITION

INTEGRATION OF CUSTOMER INFORMATION

CRM IN HOTEL INDUSTRY

E-CRM COMPONENTS

CUSTOMER SERVICE

CRM SOFTWARE

INTRODUCTION TO CRM IN HOTELS

INDUSTRY/COMPANY PERSPECTIVE

ITC WELCOME GROUP HOTELS

THE OBEROI GROUP OF HOTELS

TAJ GROUP OF HOTELS

RESEARCH METHODOLGY

STEPS IN RESEARCH PROCESS

LIMITATIONS OF STUDY

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FINDINGS OF RESEARCH

ITC GROUP OF HOTELS

THE OBEROI GROUP

THE TAJ GROUP

CONCLUSIONS & RECOMMENDATIONS

CONCLUSION

SOME KEY LEARNING AREAS

RECOMMENDATIONS

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INTRODUCTION

1.1 What is Customer Relationship Management (CRM)?

CRM entails all aspects of interaction a company has with its customer, whether it

is sales or service related. It even uses technology to streamline processes that

impact customer loyalty, service delivery and quality management.

Today, businesses are facing an aggressive competition and they have to make

Efforts to survive in a competitive and uncertain market place. People have realized

that managing Customer relationships is a very important factor for their success.

Customer relationship management (CRM) is a strategy that can help them to build

long-lasting relationships with their customers and increase their profits through the

right management system and the application of customer-focused strategies.

“Customer is the most important person for a business. He is not an interruption

to our work but the purpose of it. He is not an outsider; he is a part of it. We are

not doing him a favor; he is doing us a favor by giving us an opportunity to serve

him.”

(Mahatma Gandhi)

It has grown mainstream and is being implemented in a wide range of companies

and organizations such as manufacturing, financial services, transportation and

distribution, medical services and products, consumer package goods and others.

This explosive growth of CRM reflects the intersection of genuine market need and

enabling technology. And, in this growth period, the impetus for CRM is shifting

from an emphasis on efficiency, i.e., doing more things faster with less cost, to

effectiveness, i.e., doing things better for increased revenue with a high "return on

relationships (ROR)".

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According to Chaudhuri and Shainesh (2001)-A CRM programmer requires a clear

understanding and commitment to the company's customers, vigilant adherence to

detailed goals, commitment from both executives and line workers, and a constant

awareness of the customer's view point. Customer relationship management is

about more than simply managing customers and monitoring their behavior or

attitude. CRM has the potential to change a customer‟s relations with a company

and increase revenues in the bargain. Furthermore it helps to know the customers

well enough to decide whom to choose and whom to lose.

The objective of CRM (customer relationship management) is to recognize and treat

each and every customer as an individual. It is very essential for any business to

know that how to differentiate customer treatment according to an individual

preferences. For differentiate customer treatment, the companies use personalized

service and customized products which make some customers feel special and

others simply appreciate good behavior. It humanizes their purchase or service

request or complaint. Personalization and customization doesn‟t mean maintaining

only customer loyalty, but also driving purchases higher. Getting closer to

customers and effectively responding to their needs is a great way to boost their

loyalty and encourage deeper business relationship.

The task of getting and retaining customers requires even greater skill and effort.

The business needs to ensure that the service works as the customer actually wants

it to, and the customers want to do business in 'their' way, not to be forced to do it in

the enterprise's way. Most companies consider them customer-focused and believe

that in being so they are servicing the customer. But eventually, being customer

focused means to have a consistent, dependable and convenient interaction with

customers in every encounter. CRM technologies focus on managing all

interactions that an organization has with its customers, in order to leverage the data

in a variety of business applications.

Where a profitable relationship already exists, CRM can especially boost superior

service at a lower cost. In addition to this it helps to serve customer's unspoken

needs.

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Generally speaking, the five needs of customers are:-

(a) Service

(b) Price

(c) Quality

(d) Action and

(e) Appreciation.

Apart from these, there would be needs, which even the customers have not taken

care of, but which, if would have satisfied will lead to higher customer loyalty.

CRM, if practiced properly might lead to cross-selling and up selling of products

and services. Cross-selling means selling the right product to the right customer.

One other relevant and important attribute of CRM is its ability to help in the ego-

mending of customers. This, if practiced efficiently, soothes the customer's negative

emotions he could have, due to the non-attainment of his expectations regarding the

product or the service.

The adoption of CRM in the hospitality industry has been impeded by a number of

factors. These include the persistently fragmented nature of the industry, the

disparate, proprietary and relatively immature nature of IT systems, and the

additional complexity associated with managing a perishable product that is sold

through a variety of distribution channels.

However, more rapid progress is being made due in part to the continued

consolidation between hospitality companies and hospitality IT vendors.

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RESEARCH PROFILE

2.1 Research Questions

a) How will CRM help to retain customers in hotel industry?

b) What are the new marketing approaches in hotel industry?

c) How CRM can be effectively administered?

2.2 Scope of the Study

This study will provide an insight into the hotel industry and the steps being taken

by them to improve their relationship with their guests/customers.

From the study, one can infer the present scenario of the practices and programs

being followed by the leading players in this sector and the steps being followed by

them to enhance customer retention, customer satisfaction and in turn, leading to

enhanced profits and brand image in the minds of the customers.

2.3 Objectives of the Study

The primary objective would be:

To study “Customer Relationship Management in the Hotel Industry”.

The other objectives would be:

To study the programs and practices of CRM employed by the leading hotels

in Jaipur.

To study the measures to build a better relationship between the

customer/guest and the hospitality unit.

Finally to conclude the findings and suggest any recommendations regarding the

future growth prospects.

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LITERATURE REVIEW

3.1 Evolution of CRM

Customer Relationship Management (CRM) is one of those magnificent concepts

that swept the business world in the 1990‟s with the promise of forever changing

the way businesses small and large interacted with their customer bases. In the short

term, however, it proved to be an unwieldy process that was better in theory than in

practice for a variety of reasons. First among these was that it was simply so

difficult and expensive to track and keep the high volume of records needed

accurately and constantly update them. In the last several years, however, newer

software systems and advanced tracking features have vastly improved CRM

capabilities and the real promise of CRM is becoming a reality. As the price of

newer, more customizable Internet solutions have hit the marketplace; competition

has driven the prices down so that even relatively small businesses are reaping the

benefits of some custom CRM programs.

In the beginning…

The 1980‟s saw the emergence of database marketing, which was simply a catch

phrase to define the practice of setting up customer service groups to speak

individually to all of a company‟s customers. In the case of larger, key clients it was

a valuable tool for keeping the lines of communication open and tailoring service to

the clients needs. In the case of smaller clients, however, it tended to provide

repetitive, survey-like information that cluttered databases and didn‟t provide much

insight. As companies began tracking database information, they realized that the

bare bones were all that was needed in most cases: what they buy regularly, what

they spend, what they do.

Advances in the 1990’s In the 1990‟s companies began to improve on Customer

Relationship Management by making it more of a two-way street. Instead of simply

gathering data for their own use, they began giving back to their customers not only

in terms of the obvious goal of improved customer service, but in incentives, gifts

and other perks for customer loyalty. This was the beginning of the now familiar

frequent flyer programs, bonus points on credit cards and a host of other resources

that are based on CRM tracking of customer activity and spending patterns. CRM

was now being used as a way to increase sales passively as well as through active

improvement of customer service.

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3.2 About Customer Relationship Management - CRM

The generally accepted purpose of Customer Relationship Management (CRM) is

to enable organizations to better serve its customers through the introduction of

reliable processes and procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be

implemented by only installing and integrating a software package designed to

support CRM processes. A holistic approach to CRM is vital for an effective and

efficient CRM policy. This approach includes training of employees, a modification

of business processes based on customers' needs and an adoption of relevant IT-

systems (including soft and maybe hardware) and/or usage of IT-Services that

enable the organization or company to follow its CRM strategy. CRM-Services can

even redundant the acquisition of additional hardware or CRM software licenses.

The term CRM is used to describe either the software or the whole business strategy

oriented on customer needs. The second one is the description which is correct. The

main misconception of CRM is that it is only software, instead of whole business

strategy. Major areas of CRM focus on service automated processes, personal

information gathering and processing, and self-service. It attempts to integrate and

automate the various customer serving processes within a company.

There are three parts of application architecture of CRM:

1. Operational - Automation to the basic business processes (Marketing, sales,

service)

2. Analytical - Support to analyze customer behavior, implements

3. Co operational - Ensures the contact with customers (phone, email, fax, web...)

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Operational part of CRM typically involves three general areas of business. They

are (according to Gartner Group) an Enterprise marketing automation (EMA), Sales

force automation (SFA) and a Customer service and support (CSS). The marketing

information part provides information about the business environment, including

competitors, industry trends, and macro environmental variables. The sales force

management part automates some of the company's sales and sales force

management functions. It keeps track of customer preferences, buying habits, and

demographics, and also sales staff performance. The customer service part

automates some service requests, complaints, product returns, and information

requests.

Integrated CRM software is often also known as "front office solutions."This is

because they deal directly with the customer. Many call centers use CRM software

to store all of their customer's details. When a customer calls, the system can be

used to retrieve and store information relevant to the customer. By serving the

customer quickly and efficiently, and also keeping all information on a customer in

one place, a company aims to make cost savings, and also encourage new

customers.

CRM solutions can also be used to allow customers to perform their own service

via a variety of communication channels. For example, you might be able to check

your bank balance via your WAP phone without ever having to talk to a person,

saving money for the company, and saving you time.

3.3 Four Parameters to Measure CRM Success

a) CRM's Ability To Impact Corporate Strategy:

Without a corporate strategy, giving emphasis to a customer-centric approach, no

CRM initiative can be made fully successful.

b) Successful Technology Integration:

The technology which has been used across different departments of an enterprise

should be integrated to give a comprehensive and successful CRM application.

c) Enhanced Strategic Partnerships:

For a good CRM implementation, there should be a co-ordinate effort among the

different partners to the enterprise.

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d) Assimilation of CRM related technologies:

Those who are responsible for the CRM activities should thoroughly be conversant

with the technological aspects of that particular technique. Otherwise, misuse or

under utilization of these technologies may take place resulting in partial or full

failure of those activities.

3.4 CRM and Technology

In CRM the important functions are collecting customer data, analyzing them and

making relationships with the prospective customers based on the analyzed

information. Among these three main functions, the first and the last ones are

making direct contact with customers, while analyzing data is not.

The operational CRM deals with those which make customer contacts or otherwise

called as touch points. Analytical CRM does the job of analyzing the accumulated

data from the various touch points with the aid of business intelligence.

By using the new CRM techniques the companies are trying to provide a consistent

but tailored customer experience across all contact points with the customers.

The Components of Operational CRM:-

1. Customer Service and Support (CSS):

These applications basically automate the support and service functions, including

analysis and also provide workflow engines that facilitate efficient problem and

inquiry escalation, tracking and resolution. They also provide customizable,

dynamic scripting capabilities for the customer service representatives or executives

as well as the potential to record customer responses in a shared storehouse. Call

centers use operational CRM tools; They also integrate with computer telephony

integration capabilities which allows automatic call routing with automatic screen

pop-ups containing all customer and product information to the agent's work

stations as the agents are answering or initiating calls. (Chaudhuri & Shainesh

2001)

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2. Sales Force Automation (SEA):

These are tools which automate the collection and distribution of all types of sales

or sales related information‟s. SEA allow for the design of sales teams based on

particularly defined criteria. Calendar management, activity management, sales

reporting and forecasting, lead distribution and tracking of sales contacts with

customers and prospects are some of the capabilities offered within these solutions.

3. Marketing Automation (MA):

These applications provide the ability to create automated marketing campaigns and

track the results. Generating lists of customers to receive mailings or telemarketing

calls, scheduling automatic or manual follow-up activities and receiving third-party

lists for incorporation into the campaigns are all typical functions. Internet

personalization tools are offered here to track behavior on a web-site and allow

tailoring of the contact experience, or generation of specific cross-selling

opportunities based on this behavior. Inbound and outbound e-mail management

capabilities are also becoming popular components of the marketing automation

suites. (Key Note , 2003)

Analytical CRM - How It Functions?

According to Hart et al, (2002) Analytical CRM involves the analysis and

interpretation of large amounts of cross functional data collected from the customer

activities occurred at the front-office. This data is regularly stored in a data

warehouse, which is actually a storehouse of corporate data from various sources

intended to facilitate business analysis. The major types of analysis of data are the

following:

1) OLAP: Online Analytical Processing is one of the most popular type

of decision-support analysis, allowing the average business person to explore data

online with the aim of focusing on detailed data at a lower and lower level of the

data hierarchy. More often, this means generating an online report, analyzing the

results and submitting a detailed query in order to understand the result data. OLAP

analysis requires the analyst to have a query or hypothesis in mind for clearly

understanding the result.

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2) Data Mining: Data mining tools identify patterns in data and deliver

valuable new information‟s that can increase a company's understanding of itself

and its customers. It is commonly used to help data analysts search for information

they don‟t yet know to look for, often involving no hypothesis. The three types of

data mining are:

Prediction: The use of historical data to determine future behaviors.

Predictive modeling generates output that populates a model or structure to

represent the results.

Sequence: Sequential analysis identifies combinations of activities that occur

in a particular order. This is used to determine whether customers are doing

things in a particular order. It can help a business to distill behavior from

events captured from various operational systems around a company to

determine patterns.

Association: Association analysis detects groups of similar items or events.

The association algorithm is often applied to market-basket analysis to help

business understand products which are usually being purchased together. The

product affinity concept is the base, here.

3) Click Stream Analysis: By analyzing the click streams of an internet

user, one can understand how the user arrived at the site, how long he stayed, what

he did during his visit and when he returned. The whole process is similar to a

hidden camera recording the activities of a shopper in a store. These data are stored

either as part of company‟s data warehouse or as separate click stream data store

called "data web house: If examined regularly with consistent metrics, click streams

reveal certain patterns of web-user behavior. (Schneider and Bowen, 1999)

4) Rules Based Personalization Analysis: These analytical tools

are based on the concept of personalization. Here the software makes

recommendations based on the personalized/customized website of a customer.

Rules based personalization most often involves rules that have been hard-coded

into software. For this reason it is often difficult to maintain and support.

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5) Collaborative filtering : This is otherwise known as 'adaptive

personalization.' This gets smarter as it observes customer behaviors and applies

them to new circumstances. Collaborative filtering uses the behavior of other 'like'

visitors as the basis for its recommendations. These tools are often more complex,

and thus more expensive, than rules-based personalization.

3.5 Some Applications of Technology in CRM

1. Call Centers: These are organizations which deal directly to the customer

interactions. These are otherwise known as "Customer Care Centre" or "Contact

Centre" indicating more technological sophistication and multichannel support. Call

centre technologies entered the market place to effectively alleviate some of the

repeat work and increase efficiencies, allowing companies to handle escalating call

volumes. Customer Service Representatives (CSRs) could look up similar calls and

resolutions while a customer was on the phone, without having to repeat research.

The software tools being used in the call-centers also provide forecasting of call

volumes to ensure adequate call centre staffing. (Lemon, et al, 2002)

2. Web Based Self-Service: The customers themselves, without the help of a live

person can resolve their problems or find out answers to their queries using the web.

This model is founded on the principle of enabling customers, partners and

employees to obtain information‟s or conduct transactions directly over the internet,

avoiding time-consuming and costly traditional processes involving multiple verbal

or written interactions. It provides control, performance, convenience and

efficiency.

3. Customer Satisfaction Measurement: Survey mails are the major way for

companies to monitor customer satisfaction. Nowadays, these survey forms are

even personalized to specific customers or customer groups. Responses are input

into customer databases and included as part of individual customer profiles. Such

tracking of customer satisfaction over time enables a company to fine tune how it

communicates with its customers according to their preferences. (Mohan Babu,

2003) Now, the paper based surveys are giving way to electronic surveys.

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4. Call-Scripting: Automatic scripts generated for customer service representatives,

based on an individual customer's segment and/or customer profile contents. Scripts

remove the guess work from determining how to respond to a customer query or

complaint, guiding representatives through a dialogue with the customer and thus

optimizing discrete customer interactions.

5. Cyber Agents: This is a kind of an improved or modified form of the concept of

self-service. Cyber agents are 'lifelike representatives' normally depicted on a

company‟s web site as a real person. This attempt to pull together the best of both

personalization and advanced technology. It is given a personality and is having

facial expressions and volume. Usually a cyber agent addresses the web visitor with

his/her first name. It can draw from the wealth of detailed information to answer

basic FAQs as well as guide a customer to the appropriate screen for a definite

purpose/action.

6. Web Site: It is the efficient and effective use of worldwide web for providing

information to the customers, by a company who had created that site, in a hassle-

free manner. The main advantage of a web site is its 24 hours accessibility. Usually

gathering information from the site is a simple task and is cost-effective. In the US

and in the developed countries web is extensively used. In the case of monetary

transactions, if it is a high involvement activity most of the customers prefer the

offline mode mainly due to their concern over security problems in monetary

transactions, through the net.

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3.6 Industry Definition

Abbey (1999) proposes a hotel industry in a primarily a service sector emphasis in

given on the role played by relationship marketing. You are nothing without our

customers understanding that your organization exists for no other reasons than to

meet customer needs and expectations. Its imperative is to develop proactive

methods for understanding what customers like and dislike. If you believe other

wise, just look behind you at the long queue off competitors lined up and waiting

for the opportunities to prove you wrong.

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. (Anton, 2005)

In hospitality, each customer relationship has value and should be managed

effectively. There is opportunity for repurchase and recommendation from each past

customer. The administration of the information about this past guest and the

effective integration of the information into frontline guest services programs is the

challenge of CRM implementation.

Tactically, where does CRM start? The recommended implementation of customer

relationship management typically looks like (Hart et al, 2002):Statistically valid

customer satisfaction measurement: From the very top of the organization, there

should be a commitment to CRM including customer satisfaction, employee

satisfaction and a desire to have one voice to the customer.

3.7 Integration of customer information:

The process of extracting customer data from legacy systems (i.e., the property

management system) and integrating the entire database in the property that

contains guest information is complex and time-consuming. The data sources may

include guest history, external guest profiling systems, restaurant club programs,

sales and catering system information and other data.

1. Customer profiling :

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Demographic and Psychographic information can be appended to a large percentage

of the customer database. This is followed by the implementation of effective

marketing programs to attract similar customers to build revenue.

2. Direct marketing :

The utilization of the integrated customer information for direct marketing offers is

the goldmine of any CRM effort. Highly profitable offers can provide business

during slow periods. These offers can be communicated via mail or e-mail.

3. Best customer/extraordinary service:

The Mecca of all is to understand if the most profitable customers are the most

satisfied. This involves very detailed satisfaction analysis, combined with valid

financial data about each customer – all appended to the customer database. It‟s

uncertain whether anyone is there in the hospitality industry, but certainly

companies are getting very close to understanding the most profitable customers

and most profitable micro-markets. The immediate tactical example of this is can be

found in well utilized sales and catering systems, which integrate the profitability of

groups and meetings. Linking the meeting planner satisfaction to each of these sales

and catering accounts is the first step in making sure that your best customers are

most satisfied.

CRM is not a buzzword program, like so many that have gone before. It is the

integration of all the elements that hospitality has focused on forever:

Personally recognizing customers;

Offering appropriate value and great service to encourage repeat business;

Insuring that employee and guest satisfaction continues to improve;

Beating the competition by offering a better product, competing on the

service experience rather than price alone.

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CRM IN HOTEL INDUSTRY

4.1 E-CRM Components in Hotel Industry

Sales functionality: Contact management profiles and history, account

management including activities, order entry, proposal generation

Sales Management Functionality: pipeline analysis (forecasting, sales cycle

analysis, temporary alignment and assignment, roll up and drill down

reporting).

Telemarketing/Telesales Functionality: call list assembly, auto dialing,

scripting, order taking.

Time Management Functionality: single user and group calendar/scheduling,

e-mail

Customer service and support functionality: incident assignment, escalation,

tracking/reporting, problem management/resolution, order

management/promising, warranty/contract management

Marketing Functionality: Campaign management, opportunity management,

web-based encyclopedia, configuration, market segmentation, lead

generations/enhancement/tracking.

Executive information functionality: extensive and easy-to-use reporting

ERP integration functionality: legacy systems, the web, third party external

information

Data synchronization functionality: mobile synchronization with multiple

field devices, enterprise synchronization with multiple databases/application

servers

E-commerce functionality: manages procurement through EDI link and web-

server and includes B2B and B2C applications

Service support functionality: Worker orders, dispatching, real time

information transfer to field personnel via mobile technologies

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4.2 Customer Service

Call Center Software

Help Desk Software

Partner Relationship Management

Contract Management Software: Contract Management Software enables an

enterprise to create, track and manage partnerships, contracts and agreements.

Example: Upside Software, Accruent Software, diCarta, IMany.

4.3 Customer Relationship Management Software for the Hotel Industry

EXAMPLE:-

Guest Ware is a unique Customer Relationship Management System (CRMS)

designed specifically for the lodging industry to provide personalized guest

recognition and exceptional service quality. Leading hotel management companies

use Guest Ware to improve guest satisfaction, lower operating costs, build guest

loyalty, and increase revenues. Guest Ware is installed in over seven hundred hotels

and resorts worldwide; including Marriott International, Kimpton Hotel Group,

Hyatt Hotels, Star wood and many independent hotels and resorts.

Marketing Solution - The CRM Approach

Now more than ever, it is critical for hospitality sales and marketing professionals

to maximize their return on investment (ROI) in marketing. Experts agree targeted

marketing to existing customers is the best way to increase marketing ROI. Most

industry consultants estimate the cost of finding a new customer is between 5 and

10 times the cost of retaining an existing customer.

Improvement Analysis - Implement Process Improvement

Industry surveys show that guests are less likely to return if they experience a

problem during their stay. Guest Ware‟s Improvement Analysis tools provides with

the information to eliminate recurring problems and keep guests coming back, so to

lower operating costs and increase guest satisfaction at the same time.

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Comment Card Tracking - Listen To Your Customers

Customer survey on restaurant or an extensive questionnaire of guests, the Guest

Ware Comment Card Tracking system assists to manage customer feedback. Guest

Ware will improve productivity in the follow-up process and provide valuable

management reports to maximize the benefits of your surveys.

Guest Ware Enterprise Solution – For Effective Means

Intended for hotel chains, brands and management companies, the Enterprise Guest

Ware database maintains a single view of the customer essentials for CRM.

Enterprise Guest Ware enhances property management systems (PMS) and central

reservations systems (CRS). It allows hotel companies to implement enterprise

CRM while leapfrogging existing hotel technology investments.

Communications Server - Two-way Messaging

The Guest Ware Communication Server integrates two-way messaging (or other

types of text-based messaging) with Guest Ware‟s Rapid Response. It allows staff

to receive and close requests and maintenance issues from a pager or cell phone.

The software helps streamline service delivery and uses existing e-mail systems or a

modem to communicate with most two-way messaging devices.

With the latest offerings in CRM, Hoteliers can:

Develop comprehensive guest profiles from reservation information and

demonstrate to guests/customers that the property is in touch with their needs

Drive guest-centric data down to the transaction level, allowing employees

and guest-facing technology to deliver greater value to the guest/customers.

Generate a realistic profile on the spending and stay patterns of guests,

allowing the property to create guest-centric marketing for increased loyalty

and spending. ITC SONAR BANGLA- Field selling, Loyalty programs,

Reservation systems, Web & Call centers are the major sources of database

development. The hotel has 35,000 members in its database. They regard this

management of their database as an asset because it enables a superior

customer understanding.

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Using the Database:

Product and service improvement is just one result of tapping into a database.

Developing special promotions and employing direct mail to promote these

campaigns is another major use of database marketing.

For example: A sales team of Mughal Sheraton, Agra had completed a review of

an upcoming weekend. This review revealed that bookings to date were some what

below forecast and that a special promotion may be done in order to speed up the

business. The sales team then enveloped special promotion packing to encourage

bookings for weekends. They searched their welcome break holiday package

database and scratched it to identify and segment the customers who tend to:

Book on long weekends

Book on a short term basis

Respond to promotional campaigns

direct mailing

Relationship Marketing

Relationship marketing depends on the goodwill generated by frequent-buying

programs as well as on the information provided from database marketing efforts,

goes beyond simple short term awards and involves all the elements of a firm‟s and

services to encourage a personal relationship with each customer. Relationship

marketing is “knowing the customer and using that information to bond with them.”

Form the initial personal contact and then serve as the foundation for nurturing this

brief encounter into a friendly and accommodation relationship by focusing on

personal guest information. In addition to knowing the purchase habits of members,

personal information such as spouse‟s name and hobbies are added to a member

database .The company uses this information to tailor special events and products to

small segments of the membership.

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Complaint Handling

Few companies, use or pay attention to complaints. Who wants to hear what they‟re

doing wrong, especially if the criticism is well founded. It is estimated that 90

percent of dissatisfied customers whose problems were not solved will never do

business with the retailers that sold them the product nor will they again buy the

product that caused the problem. In case of hotels customer/guest is more likely to

switch if the provided service is not satisfactory to their expectation. On a personal

level we all know what our faults are but we get defensive way they‟re re pointed

out. We‟re also aware of weaknesses in our job performance, problems in our

organization and imperfections in its products and services. But reacting to criticism

is difficult. We tend to respond in a guarded and defensive way, which may avoid

squarely confronting the real problem. Likewise, companies tend to let themselves

off the hook too easily: “We never could have satisfied that customer.” (Schneider

and Bowen, 1999)

The astonishing news is that those people who do complaint and have their problem

taken care of, tend to be more loyal to the company than the people who were

satisfied in the first place. World-Class companies see complaints as opportunities

to improve, to impress customers and to turn complaining customers into loyal

ones.

Priority Marketing

Priority Marketing focuses on what‟s important to the customer. What is important

to one customer however, may not be as important to another. Consider the varying

demand placed on a hotel: An airline stewardess may find the 24 hour room-service

extremely valuable, a retired couple may need dietary menu options, a tour

wholesaler may favor low prices, and a young female executive considers a security

a priority. Hotels should break down their services and ask customers what is

important to them. This approach can field very valuable insight about changing

customer preferences. Identifying groups of customers who have similar

preferences or even similar tastes (such as sharing common perceptions of quality

or states), hotels can target promotions to capitalize on known characteristics and

individualize the presentation.

It is important that hotels involve their guests and stay in touch with customer

perceptions of current services.

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CRM Success

Seeing CRM initiatives take hold and begin to pay off is often a waiting game. It‟s

not a “flip-the- switch” product that automatically spits out results or something that

will take affect overnight and cause profits to skyrocket while you sleep. The puzzle

must be completed and time must play its part before true success will be seen.

However, through dedicated and smart planning, businesses should see markedly

increased profits, as satisfied customers will continually re-visit them. Gradually, as

businesses get to know their customers, their customers get to know them, and a

closely aligned partnership is formed. This one-to-one relationship is the catalyst

that sparks both lifetime customer loyalty and revenue increase. In the true spirit of

thinking outside of the box, experts at the Gartner Group believe “the most

successful organizations will be those who, through innovation and focus on

business effectiveness rather than merely efficiency, manage to break the mold of

traditional business thinking”. Being effective is paramount. The end goal of better

serving customers and enabling a high percentage of customer retention cannot be

met with out creative thinking and effective planning and actions.

4.4 INTRODUCTION TO CRM IN LUXURY HOTELS

Up to now, CRM programs in the hotel industry have mainly focused on trying to

stimulate loyalty by means of offering different levels of service, information,

rewards and attention (mostly in the form of electronic communication) to specific

24

categories of guests. Most A-level or 1st tier hotels do have loyalty card programs

and exchange guest information between departments and units. In fact, a number

of them have installed sophisticated account management planning and database

marketing systems. However, this means that the bulk of CRM efforts focus on

trying to develop relations with the guests within the context of loyalty programs

and focus on increased guest satisfaction through “personalization and

customization” of services and experiences. Overall, the hotel industry, so far, has

focused its attention on optimal segmentation, testing of policies (influencing the

drivers of loyalty) and forecasting. Within such a context, CRM does not address

the key concepts from relationship marketing mentioned above: trust, mutuality,

promise keeping and dialogue.

In fact, one could argue that many hotels are not avoiding the four perils of CRM:

Implementing CRM without a clear customer strategy,

rolling our CRM before changing the organisation to match the program,

assuming that more CRM technology is better, and

stalking, not wooing, customers.

For an industry such as the hotel industry, maybe even more so than for other

industries, successful CRM programs are those that enable “rich communication

and facilitating appropriate responses that emerge from that communication”

Offering the right services and experiences without that type of communication is

virtually impossible. Even though the hotel industry might not be the most

advanced CRM industry at this point in time, it is definitely an industry in which

the process of CRM and day-to-day activities are very much intertwined. The hotel

industry is all about offering hospitality and the most important means to do so are

the people that offer it. It is, probably more than any other business, a people

business. It all boils down to managing the relationships between your staff and

your guests, the end consumers.

25

INDUSTRY / COMPANY PERSPECTIVES

5.1 ITC WELCOMGROUP HOTELS

ITC hotels stepped into the hospitality industry in 1975 and are one of the most

upcoming hotel chains in its class. They started their first hotel in Chennai and now

they have 66 hotels across more than 50 destinations in India. ITC collaborated with

Sheraton hotels, which is a part of Starwood hotels and resorts and is a well-known

global hospitality chain. They were the first ones to adopt this exclusive logo which

has not been thought or taken by anyone to match this – The “Namaste-Nobody

gives you India like we do”.

It is represented by four distinctive brands serving the needs of the travelers,

namely: -

ITC Hotels – Super deluxe and premium hotels in strategic business location.

WelcomHotels – Five Star first class hospitality for business and leisure

travelers.

Fortune Hotels and Resorts – Full service hospitality at mid-level prices for

business travelers and leisure travelers.

Welcome Heritage – Palaces, forts, havelis, resorts and homes that bring

alive the history and romance of India‟s herit age.

“In the year 1984, this group underwent a drastic change when their occurred a

paradigm make over in the entire Hospitality Industry. It was at this point when

there focus shifted from catering the Leisure Travelers to Business Clientele in

order to provide a feel of a working environment while traveling all over the

country. We feel that the hotels in the city fulfill the leisure needs well, but there are

very few to think out of the box”.

26

5.2 THE OBEROI GROUP OF HOTELS

The Oberoi Group of Hotel has played a leading role in the growth of the hotel

industry in India. The Oberoi group has the distinction of having listed as members

of the leading hotels of the world. Oberoi hotels today operate the largest chain of

luxury hotels with 30 hotels in 9 countries and are rapidly expanding into new

destinations around the world.

As the founder chairman Rai Bahadur Mohan Singh Oberoi started off with a single

hotel in Shimla in 1934, the group has diversified business interests relating to the

hospitality industry.

The Oberoi Chain currently runs 18 hotels in India and 12 hotels abroad.

CONCEPTION

The Grand Oberoi, Kolkata was India's first modern, luxury hotel, when it was

opened in 1965. A member of the internationally prestigious leading hotels of the

world, today the Oberoi has undergone a multimillion dollar redesign and offers

every comfort and convenience to the international corporate travelers.

Location: Dr15, Jawaharlal Nehru Road, Kolkata, West Bengal, India

Class: 5 star Deluxe

Rooms: The hotel takes pride in its 213 guest rooms and suites, variety of specialty

restaurants and bars, recreation, business centre, and conference facilities. All

rooms and suites convey a great sense of space, elegance and gracious living.

Leisure Facilities: Outdoor Swimming pool, Steam and Sauna.Spa,Fitness Centre.

Special services: Bank, Barber Shop , Shoe Shine, Beauty Parlor, Laundry, Drug

Store, Flower Shop, Book Shop, Mercury Travels (ticketing & car hire), Executive

Center (Typing, Fax, Photostatting, Board room) etc.

Shops: Shopping Arcade located at the lobby level.

Restaurants and Bars:-

La Terrasse-an all day dining restaurant offering an array of minternational

cuisine.

27

Baan Thai-widely recognized as the premier Thai restaurant in the country.

Chowringhee Bar- and Tea Lounge relax here before or after dinner with friends,

colleagues and a selection of fine wines, beers and spirits.

28

5.3 TAJ GROUP OF HOTELS

Taj group of hotels is the largest chain in India- with several Hotels abroad also.

The parent Hotel-The Taj Bengal Hotel, Bombay is rated among the 10 best hotels

in the world. The founder of the house of Tata‟s, Mr.Mansheti Nuser wanji Tata, in

1894 formed the Indian Hotels company and built the exquisitely beautiful Taj

Mahal Hotel in Bombay.

Taj has been operating in the USA, the UK, the Maldives, Oman and Sri lanka and

the Taj Empire continues to expand further. Today Taj has 50 Hotels of which 48

are operational, 38 destinations and is the largest Hotel chain in the country. Only

one hotel group knows India and South Asia so well, and does so with such

consummate style. From its earliest days, taking residence with The Taj Group has

been a grand occasion. When The Taj Mahal Hotel, Mumbai, opened in 1903, the

event was described by The Times, London, as “a resplendent debut”.

Taj Bengal is Luxury Hotel under Taj Group of Hotels. It is ideally located, 10

minutes from the Airport, 10 minutes from down town situated amidst 6 acres of

landscaped greenery; Taj Bengal hotel offers convenience and gentle ambience. The

hotel combines attractive functionality with style in a peaceful symbiosis. In Taj

tradition, one finds congenial atmosphere of true business hotel coupled with local

handicrafts and a special emphasis on cuisine. Taj Bengal has 421 rooms and suites.

Each Deluxe Business floor room is a modern business centre. Sto too is their

exclusive club floor rooms. Within quiet reason, everything that one wishes is

available round the clock Taj Bengal hotel including the finest cuisine in town. On

request in-room fax, E-mail facility, Laptop computer, background information on

major Indian industries, plus on line accessibility to world business information is

available. There are six restaurants and a bar in the hotel to offer its guests. To

name the few are Orient Express, Isfahan, and The Tea House of the August Moon,

Handi and My Kind of Place (Discotheque).

29

There are six Luxury Hotels which offer a whole of elegant living and up to the

minute business amenities, as a part of Rs. 300 crore up gradation program. All

Luxury Hotels now have renovated rooms, a state of the art Business Centre and a

modern Fitness Centre. The Taj group also has eight Business Hotels spread over

different corners of the country. There are 20 Taj Leisure Hotels out of which 16

are in India and 4 are abroad. Today, The Taj Group is India‟s largest and finest

hotel chain offering 48 hotels in 34 locations across the subcontinent. This growth

has been as diversified as it has been impressive. In addition to superlative luxury

hotels, The Taj Group includes business hotels, beach resorts, palace, garden

retreats and other comfortable accommodation. Internationally, The Taj Group has

a few properties in key cities like London, New York, Washington DC, Chicago

and locations in the Middle East and in Africa. The uniqueness of the Taj Group

lies in the sum of its parts in providing a living heritage of India, together with

superb comforts and modern facilities. All of these combine to make The Taj

Experience a must.

Hotel is a place which offers boarding and lodging for a certain charge. The concept

has changed over the years from “Home away from home” to “Office away from

home”. Broadly speaking, the product which a hotel offers falls into two

categories:-

1. Accommodation - This includes Rooms, Food & Beverage.

2. Service - This is an intangible product.

Food & Beverage - which is also a perishable commodity like a room, are served

from different F&B outlets like restaurants, coffee shops, banquets, room service,

specialty restaurants, bars etc.

Accommodation

Further classification of Accommodation would make the range of Products wider ;

The Rooms could vary from a Standard deluxe room to luxurious Presidential

Suites which differ considerably in the facilities offered and of course the Tag or

Tariff on them. The banqueting facilities, halls and conference rooms also come

under the ambit of the Rooms division.

Rooms that work smarter

30

The Taj Bengal hotel has 421 guest rooms of which 381 are Deluxe rooms and 40

are Suites. Guest rooms of Taj Bengal combine modern facilities with relaxing

decor. Deluxe Business Floor Rooms are indulgently comfortable whilst being,

virtually, an office away from home. The Club Rooms of Taj Bengal offers guests a

world of exclusive services and privilege. The Club floor rooms provide

personalized services to the guests round the clock, comfortable large areas, and the

conference rooms suited to conduct private meetings of up to ten persons are just a

few facilities to talk about. Luxury Terrace Suites are spacious, individually

appointed with separate lounge, dining and work areas and a terrace garden. The

Executive Suite combines luxury and modern convenience for excellence. The

Standard rooms and deluxe rooms offer complimentary airport transfer,

complimentary breakfast, in-rooms fax machine and butler on call. Both Standard

and Deluxe rooms are now equipped with „Flacons System‟ through which the

guest can regulate the air-conditioning and light intensity in the room, obtain World

Time and operate the night light at the flip of a button. E-mail and Internet can be

accessed in both the Standard and the Deluxe Rooms. In the days gone by, the

invading armies came from the North-West. But today they come from all over the

world. New Kolkata, India‟s capital city is a magnificent tourist attraction and

important trading and commercial centre. The Taj Bengal Hotel is the most

distinguished residence in Kolkata for Heads of State and Corporations, Business

tycoons and Luxury tourists, offers a spectacular choice of accommodation.

This session would list below the product and services offered by Taj Bengal Hotel

and what makes them unique from the rest of the hotel/s, whether it is the rooms or

the service.

The Taj Club

It is a known fact that a business traveler is a much pampered person indulged with

comforts and conveniences unheard of even a decade ago. However a yearning has

undoubtedly arisen for a special privilege, an inner sanctum, an Exclusive Club.

Born of desire, The Taj Group of Hotels presents the Taj club which offers unique

world of facilities and privileges, both essential and extraordinary.

Broadly speaking Taj Bengal has five categories of rooms:-

1. Standard Rooms

31

2. Superior Rooms

3. Deluxe Business Rooms

4. Taj Club Rooms

5. Suites Rooms

Executive Suites

Deluxe Suites

Luxury Suites

Presidential Suites

Business Centre

It offers several useful facilities 24-hrs a day, seven days a week. These include

Facsimile, Internet, E-mail, Color photocopying and legal library, as well as

laptops, city pagers and mobile phones on rental basis. Taj Bengal Business Centre

is designed to give the best to the business community who do require sophisticated

communication facilities and other gadgets to stay connected to the rest of the world

while at the Hotel. With no exaggeration it could be said that the guest gets the best

of best home while at work. The hotel calls this concept “An office away from

home”.

Banquet Facility:

The hotel provides facility for orchestrating parties and banquets, conferences,

seminars and symposiums. Taj Bengal has 11 Banquet halls with a capacity of 15 to

1600 persons (Auditorium Style) or 15 to 2500 persons for Cocktails/ Receptions. It

also has two huge Lawns to organize Fork Buffet / Standing Buffet also for outdoor

functions. The conference aids includes simultaneous translations in 5 languages.

The banquet halls of various size, decor and interiors, capacity suit all kinds of

occasions including receptions, marriage parties, conferences, meetings, get-

togethers, cocktail parties and scores of other functions. The banquet halls are very

much flexible for various types of seating arrangements and setups like Fish-bone,

Theatre style, Class room style, Auditorium type etc. the Banqueting facilities

offered by the hotel could be matched to any other competing hotels and is par

excellence.

32

Food & Beverage:

The Food & Beverage Division accounts for roughly 30% of the total revenue

earned by the hotel. There are numerous Food & Beverage outlets, but broadly they

could be segregated into

Taj Bengal has four Restaurants and one Night Club and a Bar. To name the few are

Orient Express, Isfahan, The Tea House of the August Moon, Handi and My Kind

of Place which is the discotheque and the hottest and most wanted place in the city,

especially among the youth.

Other Services & Facilities:

24-hour room service

Free safe deposit lockers

Express laundry/ dry cleaning

Purified water supply

Doctor-on-call

Full-equipped Business Centre

24-hour fax/ telex facilities.

3 Meeting rooms

Restaurant

Coffee Shops

Bars

Room Service

Banquets

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Work station availability

Laptops on hire

Secretarial service

Knight Rider on-line service

Currency Exchange

Travel assistance

Car hire service

24-hour Coffee Shop

6 Restaurants & Bars

Night Club

8 luxurious Banquet Rooms

Shopping arcade

Fitness Centre

Beauty shop

Arrangements made for golf and tennis

34

RESEARCH METHODOLOGY

In this section I have first explained about research philosophy and approaches. In

the later part of the chapter a brief and detailed overview of the research design and

methodology used by me for this dissertation are provided.

6.1 STEPS IN THE RESEARCH PROCESS

The present study focuses on “Customer Relationship Management in the Hotel

Industry”.

This study is descriptive in nature while it seeks to identify the present scenario of

the practices being followed by the leading hotels in India for enhancing customer

retention, satisfaction and loyalty. It not only intended to assist any player in this

field to capitalize on existing potential but also formulate strategies in planning,

designing and marketing of CRM tools and programs ultimately leading to a better

brand image in the minds of the customers and increased revenues in the long run.

Research simply means a search for facts- answers to questions and solution to

problems. It is a purposive investigation and an organized inquiry. This research

project has a specified framework for collecting the data in an effective manner.

Such framework is called “Research Design.”

The research process consists of following steps:-

DEFINING THE RESEARCH PROBLEM AND RESEARCH

OBJECTIVES

The definition of the problem includes the study of the topic “Customer

Relationship Management in the Hotel Industry”.

DEVELOPING THE RESEARCH PLAN

Data Source:

The type of data taken into consideration for this topic is the Secondary data. It is

that data which somebody else had collected and which had already been passed

through the statistical process. It was collected from hotel tariff cards, magazines,

newspapers, articles, and internet and company records.

ANALYZE THE INFORMATION

35

The next step is to extract the pertinent findings from the collected data. In this

project, the collected data is presented as the CRM practices followed by each hotel

covered in the study.

6.2 Limitations of the Study:-

Due to the availability of only secondary data, authentication of the data is not

sure.

not be precise.

Customer relationship management is in itself a complex topic; therefore,

there may be certain mistakes in the assumption.

36

FINDINGS & RESEARCH

7.1 ITC GROUP OF HOTELS

ITC SONAR BANGLADEFINES CRM AS:

“Customer Relationship Management is a process of managing customer relations

in an organized way”. They aim at managing each “Moment Of Truth” that is

experienced by the customer. There are various contact points where the hotel

comes in direct contact with the customer which are known as „Touch points‟ in the

CRM language. These touch points are considered important as there is direct

interaction with the customer and they provide valuable input to the hotel. The input

provided by the customer has to be captured in such a way that it becomes

information and can be used by various processes within the hotel. This can be done

with the help of technology and the aim is that whenever there is a customer

interface with any of those processes they are able to use that information in

servicing the guest in a most efficient manner. Customer Service is now more

fashionably called Customer Relationship Management. ITC SONAR BANGLA

has been following an unstructured form of CRM with a narrow focus of serving

the customer well and in a most efficient manner. The concept of Customer

Relationship Management has a broader focus of not only serving the customer but

also creating the customer and retaining him for measurable and substantial returns.

CRM is a vast subject where the concept of one to one marketing is supported by

Database Marketing.

CRM process at ITC SONAR BANGLA has been divided in 2 steps:-

1. Identification of all Customer Relationship management „vehicles‟

2. Integration of these Customer Relationship management „vehicles‟

DATA CAPTURE VEHICLES

Sonar Bangla Sheraton has identified 5 such vehicles (from marketing point of

view) which are also the touch points for the hotel in the process of managing its

Customer Relationship. These vehicles are:-

Field selling

Loyalty Programs

37

Distribution Points

Web

Call Centers

Field Selling

When a sales group or a marketing executive of the hotel makes a sales call to a

corporate, then it is called Field Selling. Field Selling includes Prospecting which

means searching and seeking for new customers. Current Accounts are one of the

best sources to uncover new business that is within these current accounts, as they

harbor many sources of untapped business potential. They also provide Leads and

referrals. Leads are potential customers with whom no contact has yet been made

and learning of potential customers from current customers is called Referral. Field

selling is considered the most important vehicle for the CRM function as the

initiative is on the part of the hotel to contact the prospective guest. Since the

representative of the hotel meets the customer personally, he is able to strike a

chord instantly and has a fair chance of representing the hotel. The difference

between the customer and consumer is apparent at this stage as, the person who

uses the hotel is a consumer (guest) and the person who helps him make this choice

is the customer (link), this link, in most cases, is the administration personnel who

are responsible for making reservations. So with the help of field selling, the

executive is able to make a direct contact with the „link‟, the administration person

and is able to take the feedback on a continuous basis and helps to customize the

offering. The main objective of this is to maintain „one to one‟ contact with the

customer on a regular basis and also to maintain reasonable visibility so that

whenever there is a requirement, the hotel is the most obvious alternative for the

customer to consider.

38

Loyalty Programs

Second vehicle for CRM identified by Sonar Bangla are the Loyalty Programs.

These programs are designed to reward the loyal guests of the hotel. Every time a

guest checks in the hotel at his every touch point or interface with the hotel, every

time he spends on a service provided by the hotel (use of Room, Restaurant,

Laundry, Telephones etc.), the transaction is recorded at each individual point and

is added to the final bill presented to the guest at the end of the stay. There are

certain points attached to the number of rupees spent by the guest. Therefore higher

the amount of the bill, the higher will be the number of points attained by the guest.

These points are credited to the account of each guest with the help of technology.

These are called Loyalty points. These accounts having the loyalty points are

unique to every guest. Therefore, whenever after the first time that guest checks into

the hotels, the guest history also affects the loyalty points. The higher the number of

points, more loyal is the guest. The points can be redeemed by the guest for either

free stays at the hotel or free gifts as listed by the hotel or free meals depending

upon the number of points accumulated.

The objective of having a loyalty program is not only to make the guest feel

rewarded for his stay but also providing a chance to the guest to reduce them at the

hotel, they essentially “gross self” the other services which would be used & paid

by the guest. In case he redeemed (for example) his points for a free stay, he would

spend on the supporting services like laundry, telephones, restaurants etc. and the

revenue generated from these could be earned by the hotel. Therefore, instead of

loss of revenue by providing free stay, they actually gain the revenue as well as

certain customers for life with the help of the loyalty. The Loyalty Program is called

welcome avail which is for the consumer. They have another loyalty program for

the link. The administration personnel, who is called welcome link, is motivated to

provide more business to the hotel.

Therefore, the more the number of bookings the links gives to the hotel, the more

number of points are credited to his accounts which are again redeemable at the

hotel either by way of free stay or gifts. This is seen as an important way to keep the

source of business motivated towards a long term relationship.

39

Distribution Points/ Central Reservation System

A customer can simply make a call at the reservation centre to make a booking with

the hotel. It sounds simple but it could get complex in case he does not receive the

expected or the desired response. Therefore, Sonar Bangla Sheraton sees this

distribution point as an opportunity to establish CRM as the respondents at the

reservation centre could turn a prospective customer into a „sale‟ or could let go off

the opportunity to do so by not being polite enough or not giving out the

information as desired by the guest. The information regarding all guest

reservations is managed through computer software, therefore, when a customer

make calls to query about a reservation, all his hotel usage history pops up in the

system which gives a chance to the executive at the reservations to instantly

recognize the customer and address him by his name. This moment of truth is

experienced by the customer with a feeling of recognition and feels it as good

service at the first touch point itself. The input or instruction received from the

customer at the stage is recorded in the reservation system for further reference by

the hotel operations. Therefore the wheel does not get reinvented every time a

standard instruction is to be followed. This leads to removal of an irritant and that

ultimately leads to a satisfied customer willing to return.

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World Wide Web

The World Wide Web is part of the internet. It is a computerized, interactive,

multimedia system to import and/or access information world wide. It is used for

both personal and business purposes. But ITC Sonar Bangla‟s focus is on the

business side of using the web. In hospitality, there are several avenues that one can

take up to set up a web site to share information and do business with a potential

customer. Since the web gives a convenience and allows the access to information

at any time, it is considered as one of the vehicles for CRM. Though Sonar Bangla

recognizes the potential of this system and is in the process of evolving a filing

automated system where the reservations can be made by the customers on time and

also the confirmation is received back on a real time basis. Presently they have an

information portal which only allows the customer to request a reservation which

has to be checked manually by the hotel reservations and then only the

confirmations are given. This is a touch point of customer relationship because a

speedy and accurate response could win you a customer. M And since it is on an

individual basis, it is more personalized and customized because the customer puts

in his preferences when requesting a booking. Therefore, once it is entered in to the

hotel‟s data base the customer does not have to repeat his preference as they are

automatically suggested by the reservation form on the net.

VALUE CHAIN OF CUSTOMER INTERACTION IN HOTEL INDUSTRY AND

POSSIBLE BENEFITS OF e-crm

Customer

Research

Pre-sale

Interaction

Sale

Transaction

Routine

Postsale

Interaction

Non-

routine

Post-sale

interactio

n

41

Consumer

Buying

Behavior

Payment

Patterns

Consumer

Profiles

Comparison of

Hotel products

Customization of

products

Clarification of

FACs and

specific queries

Order placing

Payment

Order

Processing

Payment

Processing

Routine

information

sharing (new

products/servic

e

s, advisory

services etc.)

Investment

specific

information

sharing

Short-term

payments/

redemptions

On time/

End

time

settlement

Claims

processing

in

times

Accuracy

Comprehensi

venes

Decision Making

Customization

Scrutiny

Speed Accuracy

Delivery

Speed

Transparency

Accuracy

Fairness

Speed

Transpare

ncy

42

Call Centers

ITC Sonar Bangla has a Call center dedicated to servicing the loyalty program

members. Here the customers can call in and find out about any information related

to their membership. Whether query relates to accumulation or redemption of

points, it can be accessed through these centers. This facility has been outsourced

by Sonar Bangla and is out of the premises of the hotel. This has been done to

service the quest in a most personalized and efficient manner. Call centers can now

even be accessed via e-mail as it is the most cost effective and time effective way of

accessing information. Call centers are seen as CRM touch point because they

usually provide solution to a problem that is being faced by a customer. Therefore

the intangibles of listening, understanding and providing a solution to a problem at

the right time adds to the process of retaining the customer – There is a rapport

which is built between the customer and the respondent which goes a long way in

future correspondence with the center.

OTHER INCENTIVES TO THE CUSTOMERS BY ITC

WELCOMGROUP HOTELS

Welcome Award - Rewarding Relationships

Welcome Award has earned the distinction of being India's premier and most

powerful frequent guest program. The Welcome Award program recognizes

customer as a business traveler and through its strategic alliances with travel

partners endeavors to build a rewarding relationship customer.

As a Welcome Award member customers can earn 'Stars' on every aspect of their

business trip…hotel stays, business entertainment, Car rentals and even air travel.

Welcome Link- Bring home the rewards Welcome Link, India's most popular

program for key professionals offers many value-added benefits. It is designed to

help members in making reservations for their company executives. For every

materialized room night booked by a member at ITC-Welcome group Hotel, points

are earned that can be redeemed for a wide range of rewards. With Welcome Link,

the member can look forward to many exciting promotions and prizes coming their

way plus an exciting range of rewards... complimentary dining, free holidays, air

tickets, car rentals and privilege shopping with Citibank Diners Gift Vouchers

countrywide.

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STEPS IN CRM PROCESS

The first step in CRM is for the internal customer that is to create awareness among

them towards the concept, advantages and disadvantages of the function. Then

equip them by training in their own requisite functions & scope of CRM within that

function. At Sonar Bangla, they are trained to learn more about the guest and his

background so that when he talks to the guest, he can strike a conversation that is of

some interest to the guest. That may not be necessarily related to his stay at the

hotel but these informal conversations with the guest can help build an excellent

rapport with the guest which will lead the guest to know the employee by the name.

In future interactions, it is possible that the guest may only wish that most of his

work done through that employee. This is also a form of customized and

personalized selling within the hotel. Sonar Bangla does not have a separate training

for CRM. Any time when they have a special promotional scheme for a particular

property, the marketing team (which has formulated the promotional scheme) puts

together the details of the scheme, clearly marks out what is the customer expecting

from the property and also if these are some special arrangements to be made for it.

This team briefs the General Manager of the property about the customer

expectation. The General Manager then decides the path of trickling down to that

information, who should know & how much to know. In Sonar Bangla Sheraton,

they use a phrase to explain this percolation which is “Nice to know and needs to

know” which essentially means that it is nice to know for all employees of a

particular property about the running of the promotional scheme at their property

but not all need to know about every aspect of the scheme as it may not be relevant

to their scope of work but they do need to know the tier points of the scheme

relating to their scope of work.

The second step in CRM process is to integrate the information which is received

through touch points. From a marketing point of view, it is important to get the

desired input back from touch points in such a way that all the bits and pieces

picked up by different touch points can be organized and used as valuable

information by various other touch point to offer the right product to the right

customer and that too at the right time. All this is done by creating a data base.

The Sales Process – Pre CRM and Post Implementation of CRM

44

7.2 THE OBEROI GROUP OF HOTELS

Customer Relationship Management Function has been prevalent in the hotel

industry since the inception of the concept of boarding and lodging. The Oberoi has

enjoyed a superior position regarding its core product offering and supporting

services. It has an excellent brand value which it consistently reinforced by

delivering exceptional services. The Oberoi, over the years, has acquired an

outstanding brand value which would help sell the hotel solely on its name. Oberoi

has a very loyal patronage from its guests, which has ensured a high market share in

the high-end segment of the market, which they cater to. Oberoi has, thus, been

charging a premium for the value that its guests derive from its services.

Till about five years back, The Oberoi did not have any competition and sales and

marketing team did not have to sweat it out to acquire and attract potential clients.

Today is a changed scenario. Because of globalization, India has seen the entry of

International hotel chains, there has been a lot of pressure on the sales and

marketing team to perform. Oberoi has seen its market share eroding due to price

wars and cost cutting amongst the five star hotels. The loyal guests of The Oberoi

have started switching due to similar international standards of services available at

cheaper rates. The Oberoi is thus working hard to sell its services since the product

has become generic in nature.

Crm Process At The Oberoi Group Of Hotels

According to the Oberoi the terms-Customer Relationship Management and

Relationship Marketing are used interchangeably therefore they do not have a

separate CRM department as the outlining functions of the CRM process are

integrated in the Sales and Marketing operation.

They use a variety of after sales tactics for customer bonding and loyalty. Co-

operative and collaborative relationships with customers seem to be the most

prudent way to keep tracks their changing expectations and appropriately

influencing it. The Oberoi has ensured the above by the various „end user‟ and

„booker‟ programs such as (Starkov, 2006):

Top – The Oberoi Plus

It is beneficial for guests who use the services of the hotel

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Connections – Bookers’ Program

Bookers are an important link in materializing an actual sale therefore they need to

be kept motivated to push the hotel when the reservations are made by a corporate

account. Each time a booker gives as reservation to the hotel he gets credit points

for that and which can be redeemed for gifts or any hotel services.tt

Food Festivals

The Oberoi conducts various food festivals at its Restaurants. Regularly and sends

invitations to its more profitable Clients.

Tie-Ups

The Oberoi invites top clients like CEO, Managing Directors and key decision

makers of different companies to social evenings specially arranged to further

enhance the Customer relationship management functions.

7.3 THE TAJ GROUP OF HOTELS

DIFFERENT REWARD PROGRAMS OFFERED BY TAJ GROUP OF

HOTELS TO ITS CUSTOMERS/GUESTS

Taj (luxury full-service hotels, resorts and palaces) is our flagship brand for the

world‟s most discerning travellers seeking authentic experiences given that luxury

is a way of life to which they are accustomed. Spanning world-renowned

landmarks, modern business hotels, idyllic beach resorts, authentic Rajput palaces

and rustic safari lodges, each Taj hotel reinterprets the tradition of hospitality in a

refreshingly modern way to create unique experiences and lifelong memories. Taj

also encompasses a unique set of iconic properties rooted in history and tradition

that deliver truly unforgettable experiences. A collection of outstanding properties

with strong heritage as hotels or palaces which offer something more than great

physical product and exceptional service. This group is defined by the emotional

and unique equity of its iconic properties that are authentic, nonreplicable with great

potential to create memories and stories.

Taj Exotica is our resort and spa brand found in the most exotic and relaxing

locales of the world. The properties are defined by the privacy and intimacy they

provide. The hotels are clearly differentiated by their product philosophy and

service design. They are cantered around high end accommodation, intimacy and an

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environment that allows its guest unrivalled comfort and privacy. They are defined

by a sensibility of intimate design and by their varied and eclectic culinary

experiences, impeccable service and authentic Indian Spa sanctuaries.

Taj Safaris are wildlife lodges that allow travelers to experience the unparalleled

beauty of the Indian jungle amidst luxurious surroundings. They offer India‟s first

and only wildlife luxury lodge circuit. Taj Safaris provide guests with the ultimate,

interpretive, wild life experience based on a proven sustainable ecotourism model.

Upper Upscale Hotels (full-service hotels and resorts) provide a new generation of

travelers a contemporary and creative hospitality experience that matches their

work-hard play-hard lifestyles. Stylish interiors, innovative cuisine, hip bars, and a

focus on technology set these properties apart.

The Gateway Hotel (upscale/mid-market full service hotels and resorts) is a pan-

India network of hotels and resorts that offers business and leisure travelers a hotel

designed, keeping the modern nomad in mind. At the Gateway Hotel, we believe in

keeping things simple. This is why; our hotels are divided into 7 simple zones-

Stay, Hangout, Meet, Work, Workout, Unwind and Explore. As travel often means

more hassle than harmony, more stress than satisfaction, modern travelers are

looking for smarter choices. Driven by our passion for perfection, we welcome our

customers to a refreshingly enjoyable and hassle-free experience, anytime,

everywhere. Offering the highest consistency in quality, service and style we set

new standards and take the unwanted surprises out of travelling. Our warm

welcomes make our guests feel at home, away from home and our crisp and

courteous service empowers them to get more done with greater effectiveness and

control. And through our unrivalled network we provide service that is effortless,

simple, never overwhelming, and always warm.

Ginger (economy hotels) is IHCL‟s revolutionary concept in hospitality for the

value segment. Intelligently designed facilities, consistency and affordability are

hallmarks of this brand targeted at travelers who value simplicity and self-service.

Throughout the Company‟s expansion, its mandate has been twofold: to infuse a

sense of Indian heritage and culture within each diverse property, while also

anticipating the needs and desires of the sophisticated traveler. Over the years, the

Taj has won international acclaim for its quality hotels and its excellence in

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business facilities, services, cuisine and interiors. Out of the various offerings of

TAJ in luxury, premium, mid-market and value segments of the market, we have

chosen Taj (luxury full-service hotels, resorts and palaces) for our analysis of the

CRM practices being followed by them.

CRM TOOLS USED IN TAJ

• Guest preference sheet

At the time of the reservation a preference sheet is sent across to the guest along

with the reservation conformation mail. This is primarily to capture the various

preferences of the customer such as food habits (Diabetic/ Low fat etc.), Special

needs etc. It also asks if the customer is coming on a special occasion or not and

arrangements are made accordingly made on the visit. E.g. If the guest is coming on

a honeymoon or anniversary the room is decorated accordingly, cake is placed in

the room etc.

CRM Software

This is another important tool in improving the service of the hotel and to capture

guest complaints. If a complaint is registered by a customer it is updated on the

software.

Gradually as the time lapses the status displayed turn from green to yellow and

ultimately red. This status can be seen by any of the managers as the software is

connected to the central server. A daily Action Taken Report is generated which is

signed by the operational head.

• Fidelio

Fidelio is the property management system used by Indian Hotels Company

Limited. Although it is used for various functions but it also plays an important role

in the CRM processes of the hotel. It is used for saving the profile, preferences and

special information (Anniversary, Birthday, allergies etc.) related to the guest on a

central server. This information is accessible to all the Taj properties; therefore,

whenever there is a repeat customer the hotel staff already has all the necessary

information enabling them to delight the customer by personalized service.

Wow card

This is a special instrument used by personal butlers for recording guest preferences

& other important information related to the guest. This is a small booklet which is

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carried by the staff at all times and whenever they get any information which can be

useful in the future to please the customer, they simple record it here. This

information is further uploaded on the PMS making it accessible to all.

GRE Courtesy call

Once the guest is in the hotel and stayed for sometime ( a day or two) a courtesy

call is made by the guest relationship executive during the evening hours. This is

just to know about the guest‟s experience and how can it be improved in case there

is some difficulty being faced by him/her.

Room Feedback form

During the evening service/ Turn- down service a feedback form is placed on the

bed to know about the customer experiences.

• GSTS (Guest Satisfaction Tracking system)

Post departure an automated mail from the central server is sent to the guest

requesting to fill up a feedback form. There are various heads covering the various

stations of experiences which are scored on a Likert Scale. This information is

quantified to highlight the areas of concern. This score is also used as a measure of

performance of a hotel unit. There are few loopholes in the system such as:

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• Email ids not updated which automatically stops the guest from giving the

feedback.

• Guest profile not saved intentionally.

STATIONS OF EXPERIENCE

Pre-Arrival

• Reservations: During the reservation a preference sheet is mailed to capture the

details and to enhance the stay experience.

• Airport pick-up: An airport representative is sent along with a chauffeur holding

a placard with just the hotel‟s name to maintain guest privacy. A personalised

message is sent to the guest mobile just before the landing assuring him that the

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hotel has taken care of his travel arrangements. Amenities such as cold towel,

Mineral water are offered upon arrival.

Arrival

• Welcome at the lobby: Royal welcome by the guards in typical Rajasthani Attire.

• Royal Welcome for Groups: Special arrangements for groups are made. A huge

caravan of Elephants, camels , horses along with a professional band is called for

the reception of the group.

• ATG( Aarti, Tiki and Garlanding): This is just to give a traditional touch to the

welcome and give a feel of Indian hospitality.

• Welcome Drinks upon arrival

Check-in

• Escorting

It is an opportunity for the escort to create the excitement within the guest about

how splendid his experience is going to be. A touch of history along with the

necessary information about the various facilities is given.

• Welcome Letter: A personalized welcome letter signed by the General manager

himself is presented to the guest during the time of the check-in

• Room Orientation: This is another important aspect of the check-in process. The

guest is educated about the various facilities available to him in the room.

Experience during Stay

• Champagne Walk (Heritage Tour): This is one of the special attractions of

Rambagh Palace. The entire history of the palace is explained to the group of

customers. This is done along with a trip to various parts of the palace. The trip

ends in the Polo Bar where the guests are offered complimentary champagne.

• Special Occasions celebration: Special occasions such as honeymoon and

anniversaries are very important occasions for a guest. The hotel staff takes it as an

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opportunity to leave a long lasting imprint on the heart of the guests by making it an

experience of a lifetime for the customer.

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• City Tour by Vintage cars: Staying in a real palace in itself is a special

experience and this experience is further complimented by travelling in a vintage. A

tour in a vintage is something many people dream of and the guests who stay in

Rambagh are actually able to live this moment and cherish it for a lifetime.

• Cultural Dances: Traditional Rajasthani dances are organized every evening in

the center of the garden restaurant.

• Royal Carriage: It is another way of taking the customer closer to the royalty in

which the kings of ancient India used to live.

• Cultural Music: Behind the spa, every evening there is a special musical

performance which is well appreciated by almost every guest.

• Unique Dining experience: This is a special dining arrangement made for small

groups in few surprisingly beautiful parts of the palace.

• Grand Weddings: Foreigners who visit the country are often amazed with the

grandeur of Indian weddings. Taj enables them to live this moment by organizing a

royal wedding on request of a guest.

• Other Facilities

Swarna Mahal: The Indian restaurant of Rambagh palace which has gold plated

cutlery and crockery.

Rajput Room: The multi-cuisine restaurant of the property

Verandah Café: It is the garden cafe in the hotel.

Polo Bar: The main bar which has an unmatched collection of wines.

Jiva Spa

Oriental Room: A conference room with Chinese decor.

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Old Wing: The oldest part of the palace which has the view of the Moti Doongri

Palace of the Rajmata.

Indoor Swimming pool: Built in the past to maintain the privacy of the royal

ladies.

Outdoor Swimming pool: Built by Rajamata on request of a customer.

Steam Lounge: The modern day sitting lounge cum bar.

Royal Gardens

Royal Suites (Prince’s suite, Princess’s suite, Peacock Suite) : The most elegant

rooms of the palace which were ones occupied by the descendents of the royal

family of Jaipur.

CHECK OUT

• Feedback Form at time of Turn Down

• Souvenir: A fragrant incense stick wrapped in a satin cloth is gifted to the

customers as a souvenir.

Other CRM practices

1. Taj Inner Circle

Taj Inner Circle, the frequent guest program, allows guests to earn points whenever

they stay or dine at The Taj. Guests can then redeem their points for specially

selected rewards like complimentary stays at Taj hotels, resorts, and palaces.

2. Taj Epicure Plan

The Taj Epicure Plan is an optional add-on dining plan to the Taj Inner Circle.

Members earn Epicure points for expenditures incurred on food and beverages, at

participating Taj restaurants in India.

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3. About the Taj Inner Circle

The Taj Inner Circle has three membership levels – Blue, Silver and Gold.

Customers/Guests join at the Blue level and start earning on their stay or dining or

both expenses at all Taj properties. To qualify for the Taj Inner Circle Silver

membership level, customer need to accumulate 250 points in any continuous 60-

day period i.e. spend Rs.25, 000 (INR), excluding taxes, in any continuous period of

60-days. Members who spend Rs.2, 00,000 (INR), excluding taxes, in continuous

12-month period, will be automatically upgraded to Gold status. Gold card

members enjoy enhanced privileges and accumulate points at a faster rate i.e. they

earn at the rate of 1 point for every Rs.80 spent, excluding taxes. Gold and Silver

card members of the Taj Inner Circle also enjoy a host of privileges like easier

check-in check-out formalities, discounts and priority wait-listing.

4. About the Epicure Plan

The Epicure Plan, an optional add-on to the Taj Inner Circle, is an exclusive dining

plan that offers Taj Inner Circle members special privileges and rewards for

expenditures incurred on food and beverages, at participating Taj restaurants in

India. Members of the plan receive a "Smart" membership card for instant

recording, updating and redemption of points. Taj Inner Circle Blue members who

opt for the Epicure Plan will be automatically upgraded to the Silver level whereas

members on the Silver or Gold tier will continue to enjoy their existing membership

levels.

Non-Taj Inner Circle members who wish to enroll on to the Epicure Plan will

receive a complimentary Taj Inner Circle Silver membership. Membership is

available at an annual fee of Rs. 2500, which is payable by credit card, cheque, or

demand draft (Drawn in favor of “Indian Hotels Company Limited”). Alternatively,

guests can make payments in cash when applications are made directly at Taj

hotels.

Enhanced benefits for Epicure Plan members

As a Silver level Epicure Plan member, one enjoys all the privileges extended

against the Taj Inner Circle Silver level membership. In addition, the member also

receives the following benefits.

Free couple entry to the following Taj discotheques on Wednesdays:

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•Insomnia- The Taj Mahal Palace & Tower, Mumbai

•My Kind of Place- Taj Bengal Hotel, Delhi

Free couple entry to the following Taj discotheques on Saturdays:

•T2- Taj Krishna, Hyderabad

Free couple entry to the following Taj discotheques on Sundays:

•Incognito- Taj Bengal, Kolkata

BENEFITS THAT CUSTOMERS ENJOY AS A SILVER & GOLD MEMBER

In addition to rewards, customers enjoy a host of privileges that have been created

to enhance customer‟s experience at the Taj. From the moment customer check in at

any of participating hotels, they will be treated as a very special guest, in more than

one way:

Customers will be greeted with flowers & fruits in their room

Check-in & departure formalities will be easier, faster & flexible

Receive special discount on rooms at Taj leisure hotels

Avail of double occupancy at no extra cost

Entitled to a priority wait-list.

5. Points Redemption

Epicure points can be redeemed to settle stay or dining bills at participating Taj

hotels in India. Points will be instantly deducted from the accumulated points in the

membership account. Members can even entertain or holiday at exotic Taj hotels in

exchange of Epicure points. Redemptions for holidays are subject to availability

and prior reservation. Participating Taj hotels or restaurants can close out bookings

for these redemptions. Please note that only Inner Circle points can be accumulated

at Rambagh Palace, Jaipur. Epicure points cannot be earned at this hotel. Taj

Epicure Diners Club Card: Experience the art of fine living with this exclusive card,

guests can receive exclusive benefits across 43 Taj properties and over 200 Taj

restaurants.

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CONCLUSION AND RECOMMENDATIONS

8.1 CONCLUSION

Implementing an effective CRM solution is not complex. Adequate planning,

effective communication, stakeholder involvement and mistake avoidance will

ensure that your initiative gets off the ground easily. From this study, we can

conclude that all the three leading hotels – ITC, Oberoi and Taj are following

organized and well established CRM practices. They have realized that a happy and

satisfied customer is a retained customer and that‟s the key in creating superior

brand equity and better returns.

ITC HOTELS

At ITC, the management has identified „data capture vehicles‟ or „touch points‟ (as

they call it) - like loyalty programs, reservation systems and call centers to maintain

a data bank of their customers and to access the information as and when needed.

This helps in providing quicker and more customized solution to queries and

complaints, if any and also helps in building a rapport between the hotel executives

and the customer which goes a long way in satisfying and retaining the customers,

building a superior brand image and turning them into loyal patrons. Ultimately,

this leads to measurable & substantial returns to the hotel. Other benefits extended

to the loyal clients of ITC include Welcome Award, Welcomlink, Shereton plus

which are aimed at rewarding the regular clientele of their patronage and building a

better relationship with them.

THE OBEROI

The brand value that The Oberoi has created for itself is a result of its consistent

delivery of exceptional services to its customers. Traditionally, at The Oberoi, CRM

and relationship management has been considered to be a single function, but to

maintain its market share and fight the competitive situation, the marketing

department at The Oberoi is now focusing on building co-operative and

collaborative relationships with the customers with the result that they have a loyal

patronage from their guests, and are, thus, able to charge a premium for the value

given to the customers.

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The CRM programs at the Oberoi include The Oberoi Plus for the customers and

also for the Bookers to motivate them. The Oberoi also organizes Food Festivals

regularly and sends invitations to its regular clientele and the top CEOs, MDs and

business people to further enhance the CRM functions‟ effectiveness.

THE TAJ

The Taj Group is also investing heavily on CRM systems to maintain customer

databank with their profiles to give a quicker and personalized service to their loyal

clientele. The Taj gives high priority to guest satisfaction. They even have an SMS

service to keep track of lost/missed calls by the customers while they are away.

They have employed applications like PMS, CRS and CIS to keep track of

customers‟ profiles which includes information such as their spending patterns and

their special needs also. They employ data mining technique to get and act on data

and also give credit to the employees who get compliments from the guests. Other

reward programs include Taj Inner Circle and the Epicure plan to give the

customers a host of privileges as silver and gold card holders. The challenge is to

balance between the long-term goals and short-turn gains.

8.2 Some key learning’s are:

Long turn, profitable relationships can be built when both, the service

provider and the customer, rise above the 'transaction' approach, and work in

an atmosphere of mutuality and trust.

Relationships, like real life, goes through ups and downs, and it takes a great

amount of maturity and courage to handle the 'lows'.

Relationships provide 'security'. Strategic bundling of services is a useful

methodology in this context.

Top management must be committed to the relationship, as their example is

followed throughout the organization.

Cross functional teams are required to meet the goals, especially where quick

responses are required.

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8.3 RECOMMENDATIONS

In this era of globalization where „Customer is the King‟, customer expectations are

going up which is making the situation more and more competitive. As the product

is becoming generic in nature, the hotel industry can no longer rely on the

traditional marketing strategies to retain the customers. Customer Relationship

Management is one of the key tools to fight this cut throat competition and stand

out as a superior brand.

On the basis of the study, some suggestions are:

1. Surveys: Conducting monthly guest/customer surveys, club surveys, room

comment cards, toll free guest assistance centers can help in getting customer

feedback and to improve in the areas where there is a lag as suggested by the

feedback.

2. Maintaining suggestion boxes at every touch point/point of interaction with the

customers.

3. Taking feedback not only from external customers but also the internal customers

i.e., the employees.

4. Proper check on the hotel staff‟s and processes‟ efficiency by the management,

say by employing Mystery Customers.

5. Keeping regular track of the sales data for further leads and followup

6. Employing effective CRM software to improve guest satisfaction, lower

operating costs, build guest loyalty, and increase revenues.

7. Having Guest History programs- keeping a databank of customer profiles along

with such details as room preferences, amenities preferred, special requests, meal

preferences, wallet services, sending birthday cards to the loyal guests and even

their spouses and giving them a hassle-free check-in procedure-like sending them

pickup and drop facilities.

8. Employing an efficient system of complaints handling as complaints are the

opportunities to improve, to impress the customers and to turn complaining

customers into loyal ones.

9. Giving recognition awards to attract old customers.

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10. Giving the customers a more personalized and empathic services as building

good rapport with the customers goes along way in having satisfied and return

customers.