Customer Relationship Management and its application in Hotel Industry by Sanjay Gupta

A Project Study Report â&#x20AC;&#x153;Customer Relationship Management & Its application in Hotel Industry

Submitted in Partial fulfillment for the Award of degree of

Master of Business Administration

Submitted By:

Submitted To:

International School Of Informatics And Management

Preface 1

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. Hotel industry in a primarily a service sector emphasis in given on the role played by relationship marketing. 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.

ACKNOWLEDGEMENT 2

I acknowledge the sincere assistance provided to me from several rather unexpected quarters during the course of execution of this study. It would be a mammoth task to place on record my gratitude to each and every one of them but a whole hearted attempt would be made nevertheless, least I be branded ungrateful. Where the emotions are involved words cease to work. I am deeply indebt to for her encouragement, affections, valuable advice and guidance that helped me to complete this project successfully.

TABLE OF CONTENTS 1. Introduction………………………………………..6-9 • • • •

What is CRM Research Questions Scope of Study Objectives of study

2. CRM – An Overview…………………………..10-28 • Advantages of CRM • ROI of CRM • E-CRM components in hotel industry 3. INDUSTRY/ COMPANY perspective………………….29-32 • ITC Welcomgroup Hotel • The Oberoi group of Hotel • Taj group of Hotel

4. Research Methodology ……………………………33-37 • Research Design • Steps in the Research Process • Limitation of study

5. Findings/ Research……………………………….38-53 • ITC group of Hotel • The TAJ group of Hotel • The OBEROI group of Hotel

Example of CRM Implementation……………….54-57

Conclusion and Recommendation………………..58-62

1. 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.

â&#x20AC;&#x153;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

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)".

OBJECTIVE OF CRM 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 doesnâ&#x20AC;&#x2122;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.

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. 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: •

To study “Customer Relationship Management in the Hotel Industry”

•

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. 9

CHAPTER 2 2.1 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 analyse customer behaviour, implements business intelligence alike technology 3. Cooperational - ensures the contact with customers (phone, email, fax, web...) 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.

2.2 Importance of Customers There exists a wide-spread mistaken notion that CRM is some kind of a manifestation of technology only. Another interesting thing is that even those who have implemented highly technological installations for their CRM initiatives, quite often can be seen to have forgotten the basis of this modern concept, i.e., making profitable relationships with their customers. This significant part is left to the technology alone (Schneider and Bowen, 1999). Such a situation arises mainly because of the inability or reluctance of the management to accept the importance of customers and serving them to keep them satisfied and happy, which otherwise may result in low sales and hence low profits. "One widely accepted marketing rule-of-thumb claims that the average, unhappy customer tells eight other potential customers about his negative experience." (Lemon, et al, 2002) Some decades ago, most of the companies concentrated mainly on higher productivity through higher levels of efficiency of employees as well as machines, cost-reduction tactics and on attracting more customers through the classic marketing tactics such as TV advertisements, mass mailings, bill boards etc. But the sudden growth and expansion of services sector proved that these would not convert into profits, as was expected. Moreover, the emergence of faster, cheaper and more efficient systems of communication, transport and information technology has made the business enterprises realize that the competition is just a mouse click away. These changed, new environment of business unveiled the importance of keeping the existing customers loyal so that they would not switch over to the competition, without much thinking. This led to the increased awareness of companies about the importance of serving the customer needs with a higher level of quality and in a way which is convenient and beneficial to both the companies and the customers. (Anton, 2005)

2.3 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. 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.

2.4 Return on Investment (RoI) of CRM Rigorous financial scrutiny of all Information Technology IT) investments have now become the rule. This same rule is applicable to the technology used in the CRM also. The failures of some CRM installations in some of the industries have given way to think about the Return on Investment (RoI) of CRM. (www.ascenantone.com) 13

Now there are specific analytical tools which will

help organizations to

measure their return on investment of CRM. According to George Varghese, Head (Marketing), SAS India, "Operational CRM can improve efficiency but it is difficult to calculate RoI. (Mohan Babu, 2003) To calculate RoI, enterprises need to build organizational intelligence, customer intelligence and supplier intelligence to get a unified 360 degree view of customers, suppliers and organizations." (Dyche, 2004)

Factors to be considered while calculating RoI:1. Savings in the form of reduced use of time to manage customers and customer transactions. 2. Savings in the form of time needed to assemble and consolidate sales forecasts. 3. Additional revenue in terms of increased lead generation. 4. Additional revenue in terms of increased

sales due to increased

customer loyalty. (Berry, 1983) CRM is an integration of contact management, sales automation, marketing automation, customer service and support, e-commerce, partner and channel management etc. It is not just a software solution, but also, a set of skills and competencies that will enable a company to better leverage and profit from each and every customer relationships. When the goal of cheaper, faster, better service is considered, the results far outweigh the challenges. Several big organizations have failed to know what the customer really wants and several others, after knowing, could not really translate these requirements into deliverance. At the same time we are able to see small shop keepers doing CRM extremely well. Good CRM is all about replicating the same experience with the use of technology.

2.5 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 provides 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)

2. Sales Force Automation (SEA): These are tools which automate the collection and distribution of all types of sales or sales related informationâ&#x20AC;&#x2122;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 16

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.

2) Data mining: Data mining tools identify patterns in data and deliver valuable new informationâ&#x20AC;&#x2122;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 donâ&#x20AC;&#x2122;t yet know to look for, often involving no hypothesis. The three types of data mining are(Dyche, 2004): o Prediction: The use of historical data to determine future behaviors. Predictive modeling generates output that populates a model or structure to represent the results. o 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. o 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 17

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 companyâ&#x20AC;&#x2122;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. 5) Collaborative

filtering:

This

otherwise

known

'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. (Akhtar, Prashant & Pankaj, 2002)

2.6 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 alleviate companies

entered the market place to effectively

some of the repeat work and increase efficiencies, allowing 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 18

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 informationâ&#x20AC;&#x2122;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. (Chaudhuri & Shainesh 2001) 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. 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 companyâ&#x20AC;&#x2122;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 19

customer to the appropriate screen for a definite purpose/action. (Raghunath & Shields 2001)

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. (Key Note , 2003)

2.7 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.

Advantages of CRM Using CRM, a business can: Provide better customer service  Increase customer revenues  Discover new customers  Cross sell/Up Sell products more effectively  Help sales staff close deals faster  Make call centers more efficient  Simplify marketing and sales processes

Generally, following are the type of data a CRM project includes (Lemon, et al, 2002):  Responses to campaigns  Shipping and fulfillment dates  Sales and purchase data  Account information  Web registration data  Service and support records  Demographic data  Web sales data

Key Features of CRM Tools ď&#x192;&#x2DC; CRM includes all business processes in sales, marketing, and service that touch the customer. ď&#x192;&#x2DC; With CRM software tools, an enterprise might build a database about its customers that describes relationships in sufficient detail. ď&#x192;&#x2DC; The management, salespeople, people providing service to the customer can access information, match customer needs with product plans and offerings, remind customers of service requirements, check payment histories, and so on.

E-CRM or Web based CRM E-CRM application in hotel industry are straddling across business functions to retain, capture and capitalize on customer data, i.e. integrating all aspects of business process and systems by keeping the customers as the core. e-CRM projects are no longer viewed as stand-alone implementations but are now being increasingly pursued in context of larger business objectives and core strategic agendas. Corporations realize that the true values of their customers in down turn are the ones that will be equipped, tied over the slump and jump start, consolidate and thrive.

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:

management,

web-based

campaign

management,

encyclopedia,

opportunity

configuration,

market

segmentation, lead generations/enhancement/tracking. •

Executive information functionality: extensive and easy-to-use reporting 23

•

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 (Rmana & Somayajulu, 2005)

2.8 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. (www.guestware.com)

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 Wareâ&#x20AC;&#x2122;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. (Raghunath & Shields 2001) Comment Card Tracking - Listen to your Customers Customer survey on restaurant or an extensive questionnaire of guests, the GuestWare 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 â&#x20AC;&#x201C; 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 25

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 Maurya Sheraton - 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.

2.9 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 â&#x20AC;&#x153;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 thinkingâ&#x20AC;?. 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. The task of perfecting the relationship between business and customer is always on going and requires special dedication and innovation as the commerce markets continually change and fluctuate. And over time, customers change, as does their behavior and needs, and business must be able to respond to that. Being on the cusp of the industry and always having a hand on the pulse of the customer is the key for success. As the CRM initiative begins to take hold, key players will soon see patterns emerge among customers, will discover what a productive strategy is and what is not. This is the essence of a successful CRM project: being able to really know what will work for your customers, what satisfies them, and what keeps them loyal. The ability to get an accurate gut feeling about the marketing campaigns, new products, and the type of policies customers will respond to is invaluable. This kind of customer knowledge only comes from really digging in and being savvy about how you go about understanding the people that you hope will continuously call on the services and products of your business. The ROI in this case would be compelling indeed.

Chapter # 3 Industry/Company Perspectives 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 heritage.

“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”.

THE OBEROI GROUP OF HOTEL 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 Oberoi, New Delhi 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.

TAJ GROUP OF HOTELS Taj group of hotels is the largest chain in India- with several Hotels abroad also. The parent Hotel-The Taj Mahal Hotel, Bombay is rated among the 10 best hotels in the world. The founder of the house of Tatas, 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 Srilanka 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 â&#x20AC;&#x153;a resplendent debutâ&#x20AC;?. Taj Palace 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 Palace 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 Palace has 421 rooms and suites. Each Deluxe Business floor room is a modern business centre. So too is their exclusive club floor rooms. Within quiet reason, everything that one wishes is available round the clock Taj Palace hotel including the finest cuisine in town. On request in-room fax, Email 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, The Tea House of the August Moon, Handi and My Kind of Place

( Discotheque). There are six Luxury Hotels

which offer a whole of elegant living and upto the minute business amenities, as a part of Rs. 300 crore upgradation programme. All Luxury Hotels now have renovated rooms, a state of the art Business Centre and a modern Fitness Centre. The Taj group also have 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 Indiaâ&#x20AC;&#x2122;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. 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 Palace has five categories of rooms:1. Standard Rooms 2. Superior Rooms 3. Deluxe Business Rooms 4. Taj Club Rooms 5. Suites Rooms o Executive Suites o Deluxe Suites o Luxury Suites o Presidential Suites

Chapter # 4. 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.

Research Design After having defined the marketing research problem and developed a suitable approach, attention must be given to the formulation of a detailed research design, which will provide pertinent information. According to (C.R. Kothari, 2004) when defining research design, he presents it simply as â&#x20AC;&#x2DC;the framework for a study used in order to guide the collection and analysis of dataâ&#x20AC;&#x2122;. According to Kothari (2003), there are two major types of research design:1. Exploratory research--concerned with the development of initial hunches or insights. 2. Conclusive research--intends to verify insights and help decision makers to select a specific course of action. Even though exploratory and conclusive research has distinct purposes, they both consist of the same research components. They differ only in terms of the degree of formalization and flexibility of the components illustrated in table below:

Research

project Exploratory Research

Components Research Purpose

Conclusive Research

General: To generate Specific: To verify insights insights about a situation

in selecting a course of action

Data Needs

Vague

Clear

Data Collection Form

Open-ended , Rough

Usually Structured

Sample

Relative Small

Relative Large

Data Collection

Flexible,

set Rigid,

procedures Data Analysis

well

out

Procedures

Informal, Typically non- Formal Quantitative

laid

,typically

quantitative

Exploratory Research: According to Kothari (2003), the primary purpose of exploratory research is to shed light on the nature of situation and identify any specific objective or data needs to be addressed through additional research. Exploratory research is the most useful when a decision maker wishes to better understand situation, identify relevant courses of action or gain additional insights before an approach can be developed. In general, exploratory is appropriate to any a problem about which little is known. Exploratory studies are distinguished by flexibility concerning the methods employed. Literature searches, experience surveys and study of selected studies are some commonly used approaches (Kothari, 2004).An effective way of doing exploratory research is to seek out and talk to individual with expertise related to the situation being investigated.

Conclusive Research: The insights gained from exploratory research might be verified by conclusive research, as the objective of conclusive research is to test specific hypothesis and examine specific relationship (Malhotra, 1999). Conclusive research is especially useful when the decision-maker already has in mind on or more alternatives and is specifically looking for information pertinent to evaluating them. Therefore, when conductive a conclusive research, the decision maker can choose the best course action in a situation. The kind of research is based on large, representative samples, and the data obtained are subject to quantitative analysis. There are two basic forms of conclusive research:o Descriptive research o Casual research The distinction between the two is based on the primary purpose of a conclusive â&#x20AC;&#x201C;research project and the nature of the inferences that can be drown from it. Descriptive research: Descriptive research is the design involved in the vast majority of marketing studies. The goal of descriptive research, as the name implies is essentially to describe something. Specifically, it is intended to generate data describing the composition and characteristics of relevant groups of unit such as customers, salespeople, organization and market areas (Parasuraman, 1991).Data collected through descriptive research can provide valuable information bout the study units along relevant characteristics and also association among those characteristics.

STEPS IN TH 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. 36

 ANALYZE THE INFORMATION 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.

Limitations of the Study:•

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

•

Since the authentication of the data is not sure, the result of the project may not be precise.

•

Customer relationship management is in itself a complex topic; therefore, there may be certain mistakes in the assumption.

Chapter # 5. Findings / Research

1. ITC GROUP OF HOTELS ITC MAURYA SHERATON DEFINES 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 Maurya Sheraton 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 Maurya Sheraton 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 Maurya 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:o Field selling o Loyalty Programs o Distribution Points o Web o 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 39

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.

Loyalty Programs Second vehicle for CRM identified by Maurya Sheraton 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 40

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 programme 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 programme 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.

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, Maurya 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 41

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. 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 Mauryaâ&#x20AC;&#x2122;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 Maurya 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. 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 hotelâ&#x20AC;&#x2122;s data base the customer does not have to repeat his preference as they are automatically suggested by the reservation form on the net. 42

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 programmed. The Welcome Award programme 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 programme 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.

Sheraton Plus- The art of fine dining with a special edge Welcome group Sheraton Plus brings the pleasures of the palate, in a truly rewarding manner. As a member, customers can savour the finest in cuisine ranging from authentic Indian, Mughlai and Chinese specialties to Continental fare in a selection of over thirty ITC-Welcome group restaurants. From 24-hour coffee shops to the specialty restaurants such as Dum-Pukht, Bukhara, Dakshin and West View, members get to dine and entertain. 43

STEPS IN THE 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 Maurya, 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. Maurya 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 Maurya Sheraton, they use a phrase to explain this percolation which is â&#x20AC;&#x153;Nice to know and needs to knowâ&#x20AC;? 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 Independent Database

Call Centre

Sales Agent

Security

Credit Agent

Operations

-----------------------------------------------------------------------------------

Database

Call Centre

Sales Agent

Security

Credit Agent

Operations

Source : Chaudhuri Avijit, Shainesh (2001), "Implementing a Technology Based CRM Solution". CRM – Emerging Concepts, Tata McGraw Hill

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 This is an end-user program with an enrollment fee of Rs.575 only. It is beneficial for guests who use the services of the hotel. Each time a guest spends, he accumulates points which can be redeemed for any services of the hotel. By enrolling and rewarding customers with the help of this program, the hotel ensures that a greater bonding towards long-term customer retention. They have also tied up with the airlines for interchangeable redemption of points.

Connections â&#x20AC;&#x201C; Bookersâ&#x20AC;&#x2122; 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. 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.

3. THE TAJ GROUP OF HOTELS Taj group of hotels is the largest chain in India- with several Hotels abroad also. The parent Hotel-The Taj Mahal Hotel, Bombay is rated among the 10 best hotels in the world The founder of the house of Tatas, Mr.Mansheti Nuser wanji Tata, in 1894 formed

the Indian Hotels company and built the exquisitely beautiful Taj

Mahal Hotel in Bombay. The doors opened in 1903 and has been a landmark by the Gateway of India ever since. In 1971, the 220 roomed Taj Mahal Hotels in Bombay was converted to a 325 Roomed hotel, and a multistory structure was built adjoining the original property. In 1972, the Lake Palace at Diaper and Rambagh Palace in Jaipur was linked to the Taj and a Chain was born. In 1974, a new company was

floated, which created the Taj Coromandel in Madras. In the same year the chain broadened with the acquisition of fort Aquada Beach Resort in Goa... In 1976, Fishermanâ&#x20AC;&#x2122;s Cove was built which is 30 minutes drive from Madras on the Bay of Bengal with a Private Beach. In the same year, the Taj Group opened the Taj Flight Kitchen in Bombay, Catering to both domestic and international flights.

In 1978, the glittering Taj Mahal was opened in Delhi, and this was followed by The Taj Ganges in Varanasi after two years. The1980â&#x20AC;&#x2122;s was to see a rapid expansion of the group and the gigantic Taj Palace in New Delhi was opened. The Shiv Nivas Palace at Diaper and TAC (Taj Air Caterers) in New Delhi Airport were also opened. Followed by this was the opening of Taj Residency in Bangalore, the Savoy Hotel in Ooty and the Raj Mahal Palace in Jaipur and the Taj View Hotel in Agra. Taj has been operating in the USA, the UK, the Maldives, Oman and Srilanka 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. Taj is only the only hotel group that knows India and South Asia so well, and does so with such complete style. Earlier, taking residence with The 50

Taj Group has been a grand occasion. When The Taj Mahal Hotel, Mumbai, inaugurated in the 1903, the event was described as “a resplendent debut” by The Times, London. Taj Palace 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 Palace 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 Palace has 421 rooms and suites. Each Deluxe Business floor room is a modern business centre. So too is their exclusive club floor rooms. Within quiet reason, everything that one wishes is available round the clock Taj Palace hotel including the finest cuisine in town. On request in-room fax, Email 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, The Tea House of the August Moon, Handi and My Kind of Place(Discotheque). There are six Luxury Hotels which offer a whole of elegant living and upto the minute business amenities, as a part of Rs.300 crore upgradation programme. 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. The Taj Group is India’s one of the finest and largest hotel chain which is offering 48 hotels within 34 locations across the subcontinent. This growth has been as diversified as it has been impressive. In addition to its admirable luxury hotels, The Taj Group includes business hotels, beach resorts, palace, garden retreats and other comfortable accommodation. Talking about Internationally, The Taj Group also has properties in key cities like London, 51

New York, Washington DC Chicago and also at locations in the Middle East and in African states. The Taj group uniqueness lies in the sum of its parts in providing a living heritage of India, together with superlative comforts and its modern facilities. All of these things combine to make The Taj Experience a must.

DIFFERENT REWARD PROGRAMMES OFFERED BY TAJ GROUP OF HOTELS TO ITS CUSTOMERS/GUESTS 1. Taj Inner Circle Taj Inner Circle, the frequent guest programme, 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. 3. About the Taj Inner Circle The Taj Inner Circle has three membership levels â&#x20AC;&#x201C; 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 52

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.

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: o Customers will be greeted with flowers & fruits in their room 53

o Check-in & departure formalities will be easier, faster & flexible o Receive special discount on rooms at Taj leisure hotels o Avail of double occupancy at no extra cost o 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.

Chapter # 6.

Example

CRM

Implementation

This is according to VisiGlobe solutions (for CRM):VisiGlobe offers variety of CRM solutions. These solutions can be ranged from providing CRM software to providing turnkey solutions including project management, software, training and support. Guest satisfaction is the most important aspect of CRM approach of VisiGlobe. Guest requests are continuously observed, services improved and provided seamlessly. On the other hand, staff performance and guest satisfaction surveys are tracked. It helps hotels to improve guest satisfaction at least 20%. This increase provides a minimum of 5% increase in revenue.

Happy guest returns and advises VisiGlobe is used for guest satisfaction survey, guest request and problems follow-up, staff performance tracking, department performance tracking, guest satisfaction in overall hotel performance. It has a direct connectivity to PMS Property Management Software. All available information in PMS are retrieved directly into VisiGlobe.CRM and processed. A call center is established. All reported problem and request are entered into the system and dispatched to runner to solve the issue. Closed issues are instantly closed in the system. All issue is solved timely. Each department manager tracks related issues and if

necessary, he can act immediately. This ensures all guest problems are solved before he leaves. Some part of our CRM solutions: o Guest Recognition To know more about guests and to serve better. o Incident Tracking Solving problems on time without leaving any un-solved issue. o Rapid Response Priority required requests are tracked and solved. o Improvement Analysis To improve service quality and reduce cost. o Guest Comment Card Tracking To evaluate and analyze guests feedbacks. o Relationship Marketing Marketing through guest history analysed with requests and comments. o Facilities Maintenance Planned room and property maintenance to offer problem free service. o Communication Server All requests are delivered to specific person on time via electronic transmission.

CRM means different things to different companies. Just as customers are unique, companies are unique. James Dunham, general manager, Travel and 56

Transportation for Siebel Systems, said, “Our customers apply CRM tools differently depending on their businesses’ drivers. A property that has optimized occupancy uses CRM differently than one with low occupancy because their needs are different.” Think of CRM as a way of life rather than a technology. Having said that, today’s technical possibilities are a crucial enabler for doing a much better job of embracing our customers than we ever could have in the past. Structured databases, robust wide area networks and technologically aware hotel guests are all part of the mix that has elevated the art of customer relationship management. The technology allows us to do it better, but without effective leadership in the hotel companies and buy-in from line employees it remains only a good idea.

Strategic Elements of CRM:Our experience and research identifies five crucial elements required for a successful CRM initiative in any service organization. For some companies, additional elements may become equally crucial, but we see these strategic concepts as universal: 1. Guest recognition 2. Data capture and maintenance 3. Channel integration and consistency 4. Ranking and discrimination 5. Two-way personalized dialogs

Chapter 7. CONCLUSION AND RECOMMENDATIONS 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, Sheretonplus which are aimed at rewarding the regular clientele of their patronage and building a better relationship with them. 58

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. 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 functionsâ&#x20AC;&#x2122; 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 customersâ&#x20AC;&#x2122; profiles which includes information such as their spending patterns and their special needs also. They employ data mining technique to get and 59

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.

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.

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, I would like to recommend some suggestions which could be implemented profitably by the industry. 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 follow-up 61

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 pick-up 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. 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.

BIBLIOGRAPHY WEBSITES-: WWW.WIKIPEDIA.COM WWW.TAJGROUPS.COM WWW.ITCHOTELS.COM BOOKS AND JOURNELS-: RESEARCH METHODOLOGY, INTERNATIONAL,NEW DELHI.

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KOTLER AND KELLER, SOUTH ASIAN PERSPECTIVE) PEARSON EDITION. .