Viewpoint

Forging relationships

Aditya Rahate speaks about the importance of Customer Relationship Management and its continuous relevance in the hospitality industry

Location courtesy: Hotel Marine Plaza, Mumbai

Managing relationships with one's guests and making them happy has come under the limelight in the wake of competition, where guest satisfaction is the only key to one's existence and success. The focus on guests and giving them exactly what they want has been present in almost all organisations, hence the discussion on CRM or Customer Relationship Management.

CRM, a methodology of creating golden guests, is not a new concept. It can help us not only retain existing guests but also widen our customer base and help us track our opportunities better and focus on those guests who help us to rake in that much more - not just in terms of volume but also in terms of profitability.

CRM is a multifaceted strategy that helps the hotel industry and other companies understand, anticipate and manage customer needs. The focus is on CRM and all about building brand loyalty - something hotels are in desperate need of - especially during these competitive and tough times.

CRM is an information technology industry term for methodologies, strategies, software and other Web-based capabilities that help an industry like ours organise and manage customer relationship. The need for accurate and timely information to the sales team is really important, the advantages being that the knowledge gathered by a particular person who has been interacting with the guest, now lies with the organisation and not with the person alone.

Promise and trust

At its core, CRM is based on the pillars of promise and trust. It is with the help of these promises that a hotel can build and maintain the relationship with its customers. The other face of the picture is that if one does not keep its promise then the relationship with the customer deteriorates. Thus, it is important to fulfill promises to achieve satisfaction and loyalty.

Trust is another important component in the relationship-building process. Only if a hotel keeps its promises can it expect to gain the trust of its customers. An establishment should learn to establish, maintain and enhance the relationship with it's customers by becoming loyal, trustworthy and faithful since a relationship based on mere trust is not always long term.

The only difference is that until recently the service industry was more concerned about the 'whats' than the 'whos' so as to say the hotels were focused on selling as many products and services as possible without giving importance to who was buying them.

We must shift from being service-centric to customer-centric, stress upon what they need or want than stressing on what we can give them. Traditional marketing theory and practice have focused on attracting new customers and making the sale. Today, however the emphasis is shifting. Beyond designing strategy to attract new customers and make transactions with them, companies now are going all out to retain present customers and build lasting customer relationship with them.

Hotels today are facing some new marketing realities regarding the cost of attracting new customers. In fact, it costs five times as much to attract a new customer as it does to keep a current customer satisfied.

Evolution of CRM

Managing demand means managing customers. The hotel's demand comes from two groups: new customers and repeat customers. Traditional practices used to focus on attracting new customers but priorities have changed today. The industry has shifted its attention from creating new customers to retaining the present customers who have been enjoying its facilities, thus holding them back by being in good terms with them and making a lifetime relationship.

This was gradual, of course. In the past, the hotel industry faced an expanding economy and a rapidly growing market. This growing market meant plentiful supply of new customers. Hotels could have kept filling themselves with new customers without worrying about losing old customers and to some extent this was in practice because in the past there were very few hotels that had entered a new market that was very large. But slowly and eventually when the competitors entered this market with more specialised and quality service, even more distinguished and classified facilities the prevailing industry had to face few realities and thus the evolution of concept of CRM came into being.

In today's age, it is prudent to serve customers the way they want. With the ever increasing competition amongst the hotels, it is must to judge the customer's satisfaction and make him delighted to keep him loyal. Managing the relationship and making the customer happy is the only key to success.

Survey shows that though the hotels are aware of this fact, they are not taking enough measures to enhance this relationship. Having a key differentiating factor would prevent migration of the present customers and even attract potential ones. It will help the hotels to track the opportunities better and help the hotels focus on those guests who will help them rake in profits not just in terms of volume but also in terms of revenue.

The writer is a student of final year degree at Tuli College of Management, Nagpur