Peter, Olson and Grunert (1999) defined CRM as “a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer”. According to them, CRM involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. These definitions emphasise that CRM is a comprehensive set of strategies for managing relationships with customers that relate to the overall process of marketing, sales, service, and support within the organisation.
As a result, customers are given the chance to convey their preferences through the use of explicit or implicit means. In the retail industry, they make the company or organization aware of these preferences through communication lines established or through the personalized services (i.e. loyalty schemes and frequent shoppers programs) developed by the people in charge of customer relationship management. Having made aware of these preferences, companies continue to track these responses and offer their customers with products and services that are both customized and personalized. Customer loyalty and the understanding of their customers’ preferences are very hard and at the same time, take a lot of time. Because of this, the relationship established by the two becomes unique and the customers would often come back for a repeat business, one of the proofs of their loyalty to a certain company.
This paper shall focus on customer relationship marketing to establish customer loyalty in the hospitality industry. Traditionally, it has been said that the products and services being offered in one hotel is very hard to differentiate from the products and services also being offered in another hotel. Hence, hotels