221) stated that CRM has many definitions depending on different people and their industry and in most cases it is also referred to as relationship marketing. CRM can be defined as a marketing method that allows a company or an organization to use its available resources to establish a lasting relationship with customers, thus gaining a competitive advantage compared to its competitors (Mohammed & Rashid 2012, p.221). It can also be defined as a method of retaining clients using after sales strategies. CRM, if properly implemented, can be suitable for the hospitality and tourism industry considering that hotels and other industry players get lots of information regarding their clients. An effective CRM programme should ensure that the customers get the best experience, decrease management cost, source new customers and increase profitability (Sotoudeh 2006, p.1). This paper will critically look at the impact of the customer relationship management in the hospitality and tourism. Advantages Marketing CRM is an activity that helps to source for customers and retaining them (Ku 2010, p. 1085). CRM focuses more on retaining existing customers for repurchase than recruiting new customers as well as increasing client base through referrals from the existing clients. In most cases, companies use the available resources such as the employees, technologies and their databases to set up this system. These methods are cheaper than advertising and marketing to new customers. It ensures that the company grows their customer from the existing customer base. CRM can also help to indentify the lost customers or those that are almost moving out, to ensure they are won back. Long lasting relationship also helps to minimize the effects of the competition through word of mouth by their customers. They benefit financially due to a lower marketing cost. Ensuring Customer Satisfaction Customers should get value for their money from the services paid for. Repeat customers feel attached to the service providers and thus are able to bond with companies’ employees. The existing database can be analysed by the company to improve the services offered. In the hospitality sector, there is direct interaction between the company or its employees and the customers as they deliver their services. Proper interaction helps service providers understand their customers and thus help them develop proper plans that suit the customer’s needs. Having a direct interaction helps to develop trust between the involved parties. According to the study by Hashem (2012, p. 132) in Jordan, most hotels that use CRM has higher customer satisfaction. Relationship marketing together with CRM translates to repeat customers and customer loyalty (Shirazi & Som 2011, p. 82). Increase in Revenue Well designed CRM should help a firm reduce cost and increase revenue by enhancing client loyalty. It helps to put together information from within and without the organization. This information can be used by the company to understand the market trends and specific customers’ needs. CRM helps to ensure customer satisfaction and, therefore, long term relationship. Company’s personnel interact directly with the consumers and their actions impact directly the customers (Kattara et al. 2008, p. 310). Good service by the employees leads to
The Impact of the Customer Relationship Management in the Hospitality and Tourism Name: Course: Lecturer: Date: Introduction In recent times, companies have embraced several ways of retaining the existing clients as well as sourcing for new business. Due to competition among the service providers in the tourism and hospitality industries, companies seem to focus on establishing a good relationship with the existing customers to ensure repeat business…
According to Giddens (2006), globalisation could be defined as an external force, which is an outcome of the changes in the economical, political, social and cultural conditions. These have contributed to enhanced global relationship.
Contextually, it would be to mention that organizations operating in the tourism and hospitality industries also face immense competition amid themselves owing to the increasing numbers of entrants and established brands offering similar products and services. Companies possess the need to develop effective strategies to deal with such scenarios.
Jensen-Campbell and Graziano, (2001) identified the following reasons why young, talented hospitality employees leave the industry: long working hours including nights and weekends, low pay, and stress from demanding duties and supervisors. In general, job stress of managers and frontline personnel has been well documented in the hospitality and tourism literature (Hahn et al., 1999).
In our paper we have selected the third point in which we have to critically analyze and evaluate the key environmental factors that have a role in influencing the business development decision with respect to the
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