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Customer Relationship Management: It’s About Guest Service

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June 01, 2003
Michael Benjamin

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© 2003 Hospitality Upgrade. No reproduction without written permission.

The bursting technology bubble may have hurt many of the public CRM companies, but CRM continues to be a hot and growing segment within the hotel industry.

Because of increased competition, companies have no other option then to try to differentiate themselves from their competitors. For many companies, CRM has been an effective and profitable way to do that—thanks to the improvements in customer service, satisfaction and profitability that CRM generates.

CRM does not have more to do with customer service than marketing; both are important. What I would like to emphasize in this article is the companies that implement CRM strategies—with an emphasis on the operational aspects of guest recognition and customer satisfaction—will have the most success.

The term CRM was created by technology companies in an effort to define a product category but most agree technology should only be part of any CRM strategy. I like to think CRM is first an executive level business strategy that defines how an organization wishes to interact with its customers to provide a higher level of personalized recognition and service.

CRM strategies may focus on different areas throughout the organization—from sales and marketing to recognition and service delivery—but the ultimate goal, in my opinion, should be to extend personalization and recognition throughout the organization. In other words, the goal should be to create a single view of the customer across all customer touch points.

In the hotel industry it is difficult to imagine that there could be a more important customer touch point than the guest visit. Throughout each stay guests provide opportunities for hoteliers to gather information about what guests want. That information can then be used to enhance the guest experience. In addition to using traditional visit and transaction history for guest recognition, hotels that implement processes to use both “guest value” and “past experience” knowledge will drive more loyalty.

Rapid response systems which automate manual logbooks for processing requests, problems and complaints are becoming a widely adopted tool. When integrated with guest recognition systems, the same technology can turn traditional hotel PBX operators into full-blown service agents armed with knowledge and tools to dramatically enhance the guest experience.

One common mistake with CRM initiatives is focusing on the technology and information pushed from the top down rather than focusing on the people and processes at the various customer touch points. This may seem like CRM 101, but it continues to be the greatest challenge with CRM implementations. Often because there is technology involved, management places IT in charge of the implementation. To ensure the success of a CRM system, however, the users of the system should take ownership of the implementation.
The more that CRM systems can be designed to improve efficiency through real-time processes, the more they will become mission critical and valuable. On the contrary, if the CRM system is viewed by staff as another database they are required to update or retrieve information from, the usage and benefits will be minimal.

If logging guest requests or problems into a centralized Web-based system takes longer than writing it down and provides only benefits to the corporate office, it won’t get used. On the other hand, if it’s faster than writing it down, you can bet the staff will use it and guests will benefit. CRM technology today makes problem solving fast and efficient. It allows requests or problems to be dispatched and closed out via text pager and the manager can be copied with an e-mail if the guest is a VIP or had a past problem. Only the information useful to other hotels should be sent to a centralized system.

CRM tools also enable hoteliers to efficiently recognize repeat guests and track personal preferences. Such tools are becoming a requirement to win over customers. Providing guests with highly individualized attention does more to increase guest retention than frequent stay points or promotional e-mail. Some of the guest information stored in a centralized database can later be used for other purposes such as marketing.

The ROI of service delivery and recognition from a CRM initiative may be more difficult to measure than that from targeted CRM marketing. For years hotel chains have shown through surveys and research the direct correlation between customer satisfaction and intent to return, hence the basis for the ROI model. As new CRM service delivery and recognition strategies are implemented, increases in guest satisfaction and intent to return can be measured with a high degree of statistical validity. Although the jump from intent to return to the resulting increases in revenue is a bit theoretical, when combined with other operational cost savings the ROI model builds a strong business case.

Looking at the CRM strategies of many hotel chains, the focus seems to be on guest recognition and service quality. To me that indicates customer satisfaction is their top priority— and more important than one-to-one marketing to existing customers.

Who has the killer CRM strategy with the technology, people and processes to support it? Everyone seems to think they do. Only time will tell what hotels and chains will most profitably implement CRM to improve customer service, guest recognition and keep customers coming back again and again.

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