Chapter # 1.

Introduction to the Project Topic

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 favour; he is doing us a favour by
giving us an opportunity to serve him.”
(By 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)".

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 1
CRM in Hotel Industry

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

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 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.

Generally speaking, the five needs of customers are:-

(a) Service
(b) Price
(c) Quality
(d) Action and
(e) Appreciation. (By Raghunath & Shields 2001)

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.

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CRM in Hotel Industry
However, more rapid progress is being made due in part to the continued
consolidation between hospitality companies and hospitality IT vendors.
1.2 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?

1.3 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.

1.4 Objectives of the Study

The primary objective would be:

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• 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 India.
• To study the measures to build a better relationship between the
customer/guest and the hospitality unit.
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