CRM ( Customer Relationship Management)

“Customer relationship management is the maintenance of continuous trading relationships with

customers over the long term.”

In the past decade the focus on relationship management has increased and organizations are
now focused on customer retention rather than acquisition in order to increase profits.
Companies now focus on the lifetime value of customers and employ technology to enhance
relationship management strategy.

Many companies, perhaps as many as six out of ten, have no explicit customer retention plan in
place. Most companies spend a majority of their time, energy and resources chasing new
business, with 75 per cent or more of marketing budgets being earmarked for customer
acquisition.

It is very difficult to build long-term relationships with customers if their needs and expectations
are not understood and well met. It is a fundamental precept of modern customer management
that companies should understand customers, and then acquire and deploy resources to ensure
their satisfaction and retention. This is why CRM is grounded on detailed customer-related
knowledge. Customers that you are not able to serve well may be better served by your
competitors. Since 80% of business usually comes from 20% of customer, therefore reinforcing
customer relationship strategies in order to increase retention is important.

Benefits Of CRM

Highly engaged customers are more involved with your brand or company. This not only implies
frequent purchasing, but also other attributes of what might be called ‘ corporate citizenship ’ ,
such as being an unpaid advocate by uttering positive word-of-mouth, providing frequent
feedback on their experiences, participating in company research, contributing to new product or
service development, being more forgiving if the company makes a mistake or service fails, and
participating in online communities and user groups.

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 HOTELS

In the hotel industry, customer relationship management (CRM) becomes a strategic imperative
for attracting and increasing guests’ patronage. The hotel industry is facing an increasingly
competitive market which signifies the greater need for the hotels to differentiate their
customers. Since the hotels can collect and integrate a significant amount of their guests’
information, CRM is viewed as an opportunity for the hotels to use the information about their
customers to improve the relationship for improving customers’ satisfaction and loyalty, and
consequently, for increasing the hotels’ profitability.

CRM is regarded as a strategy, which focuses on customers for the purpose of retaining them,
increasing their loyalty and subsequently, improving profitability of the organization. To retain
customers, the relationship with customers has to be managed in a long-term and trusting manner
for mutual benefits. Thus, the adoption of CRM should enhance the hotels’ performance through
increasing customer satisfaction and loyalty, declining customer acquisition costs and increasing
profitability by customers who are willing to pay a premium for better services.

In the hotel industry, customer relationship management (CRM) becomes a strategic imperative
for attracting and increasing guests’ patronage (Sigala, 2005). The hotel industry is facing an
increasingly competitive market which signifies the greater need for the hotels to differentiate
their customers. Since the hotels can collect and integrate a significant amount of their guests’
information, CRM is viewed as an opportunity for the hotels to use the information about their
customers to improve the relationship for improving customers’ satisfaction and loyalty, and
consequently, for increasing the hotels’ profitability.

Apart from amenities and facilities which all hotels in the world equally provide, there is a race
to present customer something extra, that can really make the difference.

CRM STRATEGIES ADOPTED BY HOTEL SEA JEWEL (JUHU)

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1. Customer delight: - Treats guests as God (Atithi Dvo Bhava)

Delighting customers, or exceeding customer expectations, means going beyond what

would normally satisfy the customer. This does not necessarily mean being world-class
or best-in-class. It does mean being aware of what it usually takes to satisfy the customer
and what it might take to delight or pleasantly surprise the customer. You cannot really
strategize to delight the customer if you do not understand the customer's fundamental
expectations. You may stumble onto attributes of your performance that do delight the
customer, but you cannot consistently expect to do so unless you have deep customer
insight. Consistent efforts to delight customers show your commitment to the
relationship. Commitment builds trust. Trust begets relationship longevity. Customer
delight occurs when the customer's perception of their experience of doing business with
you exceeds their expectation.

Customers have expectations of many attributes, for example product quality, service
responsiveness, price stability and the physical appearance of your people and vehicles.
These are unlikely to be equally important. It is critical to meet customer expectations on
attributes that are important to the customer.

Sea jewel makes sure that all its customers are satisfied & tries to delight them by
providing certain services that the customer did not expect. Such as if the customer has a
reservation before he arrives at the hotel the hotel provides a car pick up from the
airport/station. Thus delighting the customers & making the stay at the hotel comfortable.

2. Loyalty Programme

Loyalty schemes reward customers for their patronage. Loyalty schemes or programmes
can be defined as follows:

A loyalty programme is a scheme that offers delayed or immediate incremental rewards

to customers for their cumulative patronage. The more a customer spends, the higher the
reward.

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Loyalty programmes provide added value to consumers at two points, during credit
acquisition and at redemption. Although the credits have no material value until they are
redeemed, they may deliver some pre-redemption psychological benefits to customers,
such as a sense of belonging and of being valued, and an enjoyable anticipation of
desirable future events. At the redemption stage, customers receive both psychological
and material benefits. The reward acts to positively reinforce purchase behavior. It also
demonstrates that the company appreciates its customers. This sense of being recognized
as valued and important can enhance customers ' overall sense of well-being and
emotional attachment to the firm.

SEA JEWEL has a client loyalty programme called “moments to cherish”. Every time a
member spends Rs 2000/- he gets on moments point. These points can be exchanged for
packages available at the hotel.

3. Customer Clubs

A customer club is a company-run membership organization that offers a range of value-

adding benefits exclusively to members. Research suggests that customer clubs are
successful at promoting customer retention.

SEA JEWEL has a special club for all its members & the fees vary according to the age
& the duration of the membership. They choose from two levels of membership, full and
associate, and a variable membership length, from one year to lifetime. A nominal fee is
charged only for administrative purposes in relation to the services provided.

To become a member and obtain benefits, customers have to register. With these
personal details, the company is able to begin and services for them. The club manager
tries to personalize the services to the segment or individual level. Among the more
common benefits of club membership are roadside assistance, a membership manual, a
touring handbook, and alerts about upcoming new and improved products, discounts,
magazines and special offers.

4. Build Customer Engagement

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 The final positive strategy for building customer retention is to build customer
engagement. Highly engaged customers have levels of emotional or rational attachment
or commitment to a brand, experience or organization that are so strong that they are
highly resistant to competitive influence. The terms engagement, attachment and
commitment tend to be used interchangeably to describe this phenomenon.

To build Customer engagement Sea Jewel constantly send Mailers, sms, emails to its
existing as well as prospect customers in order to keep them updated about the
happenings of their hotel & to give them a feeling of belongingness. This also makes the
customers feel that the hotel cares about their specific needs & has remembered him.
Thus increasing the loyalty between the customers.

5. We Care

Today’s customer is very smart and he/she won’t mind that smile until he/she doesn’t get
everything ready on time. The customers need everything in place.

Therefore the hotel (Sea Jewel) makes sure that everything from entry point of hotel to
the toilet of the room, from car to the remote of TV and AC of the room is perfect. Every
customer is unique and he/she must be treated in its own unique way, & this is what is
well ingrained in the minds of the employees of the hotel. The employees are taught to be
very quick and accurate in judging the customer’s liking and disliking treating him that
way and show “Yes! We Care”.

6. Planning the Advanced Use of Technology:

Hotels are taking help of technology to woo more and more customers. Hotels World
over are adopting latest technologies like Wi-Fi connectivity, teleconferencing, online
hotel selection smart cards, so on and so forth. Sea Jewel also has plans in the near future
to avail these facilities thus making the visitor’s stay more convenient.
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7. Relationship Management

Sea Jewel maintains records of their guests like birthdays and wedding anniversaries, etc
and never forgets to send them a greeting, or sometimes a gift coupon or a free dinner or
stay in the hotel. This has proved to be a great step in retaining a guest.

8. Profiling:-

Sea Jewel maintains an accurate profile of the spending patterns of guests, allowing them
to create guest- centric benefits & promotions for increased loyalty & spending.

9. Packages:-

Earlier the packages were seasonally only – summer, winter, and holiday. For example
“reunion package”, packages for senior citizens only.

10. Guests Feed Back Forms:-

Sea Jewel invites comments from guests on the quality of their experience & the services
offered & any suggestions for improvement.

11. Guests Relation Executives:-

There is constant interaction between the guests & customer contact employees like the
front desk (reception) & front office (lobby). Sea Jewel specifically employs Guests
relation executives to interact with he guests & define profiles & preferences as also to
obtain information on the guests stay & any problems that she may be facing or any
comments that she may have.

The reason for this is that there are a very small number of guests who actually fill in the
feedback form.

12. Service Recovery:-

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 Service failure is inherent in the service delivery process, subject as it is to so many
factors including human element of variability. Service recovery is essentially the
process of recovering from the failure of the moment of truth & rebuilding relationships
with guests. This is very important for the service contact employees to find out as soon
as possible when the service has failed to meet guests’ expectations. This is extremely
important as many guests do not report their dissatisfaction to the hotel, but never come
back & may even tell heir friends about the bad experience.

Sea Jewel makes sure that no guest leaves the hotel half heartened. There is the required
level of empowerment given to the contact personnel to take the decision at the moment
of the failure, thus helping in better & faster recovery of the service.

ONLY PARATHAS (RESTAURANT)

As the name itself says, "Only Parathas". This is the place for the paratha lovers. Choose and
explore from more than 150 different kind of parathas, Along with the great taste, the ambience
of the restaurant is very rich too.

CRM STRATEGIES ADOPTED BY RESTAURANTS

1. Serve first. Sell second

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Today's customers are smarter, better informed and more intolerant of 'being sold' than
ever before. They expect doing business with you to be as hassle-free and gratifying for
them as possible. When they experience good service elsewhere, they bring an "if they
can do it why can't you?" attitude to their next transaction with you. They believe you
earn their business with service that is pleasant, productive and personalized and if you
don't deliver, they'll leave.

Therefore only parathas has the mind set of serve first & sell second. In the restaurant
adequate attention is paid on the core service but emphasis is on the additional services as
core service is something that the customer takes granted for it is the add ons in the hotel
that make the experience memorable for the customer.

2. Know what the customers want : -

The loyalty password is "value". Knowing how the customers experience value and then
delivering on those terms is critical to building strong customer loyalty.

Only Parathas employees are traineed in customer interaction & therefore through a
small chat with customer they can understand what is the customers’ taste & preference
& accordingly can suggest him from a variety that he should choose, thus making the
process more delightful for the guests.

3. Uses Multiple Channels To Serve The Same Customers Well:-

Research suggests customers who engage with a firm through multiple channels exhibit
deeper loyalty than single channel customers. But take note: This finding assumes
customers get the same consistent service whether coming into the store, logging on the
Website or calling the service centre.

To accomplish this, Only Parathas internally coordinates sales and services across
multiple channels so that customer preferences are accessible no matter how the
customer chooses to interact. This also provides customers with additional convenience
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as they can just use the home delivery option to eat from the restaurant even if they don’t
feel like going to the restaurant. And they can also be assured that food will be the same
hot & well served to them.

4. Front Line Employees “The Focal Point”:-

In hotels the only contact point for the customers or the face of the company for the
customers are its front line employees. This is also because for the customer the person
delivering the service is the service. Employees are therefore seen as a vital part of
creating and managing relationships with customers (due to the intangibility of services)
with some having more direct contact than others contributing to the provision of service
quality and satisfaction, that may lead to retention.

For Only Parathas customer service is not just being polite but also understanding the
customers’ other needs besides food. Only parathas wants their staff to go all out to
please the guests and to provide that personal touch which is so lacking in many
restaurants of today. One example would be that the staff could spot parents trying to eat
their meals with kids and offer to "baby-sit" their kids while their parents finish their
meal in peace. The service staff is reminded constantly not to be complacent-for example
a customer’s needs do not end at the point when they are served their food.

As customer feedback is very important to the business, the staff is encouraged to interact
with the customers and receive comments from them. The good service provided
complements the food and makes it a memorable dining experience.

Only parathas tries to create management strategies that also retain their staff in order to
create rapport with regular clientele as this helps to promote retention due to familiarity
and confidence in ability.

They want their employees to manage the time zones of pre-purchase (assisting with
inquiries about a service), the service encounter and post purchase (for example, follow
up phone call to make a customer feel special, offer them a special discount for their next
visit).
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5. Relationship Marketing:-

Only Parathas tries to provide guests with personalized services such as greeting by name
and tailored meals.

Social benefits occur when customers feel welcomed and recognized; value is created for
them as they feel a friendship has been developed. Hence they try to create staying power
in customers when they promote special treatment such customize their services, product
differentiation etc.

They also focus on Interaction-based relationships, as this entails retaining customers

through delivering quality service to satisfy the customers over time rather than over a
single transaction.

6. Customer Relationship Databases:-

Only Parathas tries to maintain database of its loyal customers. So that it can target
segments of customers with respect to purchase patterns, preferences and localities.
Segments of customers receive newsletters promoting particular events or special pricing,
phone calls and emails for example. The use of this strategy aims to move repeat
customers to regular users (members) of the restaurants with the ultimate goal for them to
become advocates for the company and to identify customers that may be close to
switching.

7. Customer Feed Back:-

By getting the customers’ feedback, the hotel can gain greater insights into their
customers’ behavior and preferences.

The strategy on retaining profitable customers highlights the emphasis towards

improving retention and loyalty from profitable customers. To support this strategy, it is
important to know who the most profitable customers are and how to establish
customers’ loyalty from them.

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Only Parathas gets feed back form filled from its customers. But, emphasis is placed on
interactive relation in order to get customers feed back. As many a times the customers
do not fill in the feedback form. Customers’ feedback helps them in learning and
understanding the customers’ preferences so that they can continue to offer appropriate
products and services in the future. According to them, the key success factor is to offer
value-added services to customers through understanding and meeting their needs.

8. Ambience:-

The restaurant is dimly lit with candles to create a cozy atmosphere for its customers to
relax after a hard day’s work. The small tea light candles placed give a flickering glow
creating a somewhat "romantic" atmosphere for the courting couples. The furniture is
arranged mostly 4 in a table but provisions can be made at the customers’ demands; seats
can be arranged when there is a bigger group. The main idea is to maximize space for the
waiters to move around easily as well as to accommodate as many customers as possible.

However, aiming to accommodate more customers is never done at the expense of

making the place cramped and making it difficult in moving around. All in all, the
purpose of the decorations is to make the customers feel "at home" and at the same time,
experience the kind of top quality service

9. Quality Standards

Only Parathas has certain quality norms which they strictly follow, like spoiled
tablecloths must never be reused, glasses should be stainless and toilets are always kept
clean.

Once a customer arrives, iced water is served. If it is a busy night and the orders are
taking a bit longer to be served, iced water will be replaced as after some time, the
"crunch" in the coolness of the iced water is "lost".

It is this delicate touch in the dining process that makes the dining experience a pleasure.

10. Value For Money:-

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When asked whether the prices of the Parathas are too pricey, the restaurant strongly
feels that they are not. They believe in "value-for-money" and the customers are getting
great food and quality service with the money they spend. The size of the serving is large
and customers can be assured of a wonderful dining experience at the restaurant.

In some places, they choose to serve their food in small servings, with plenty of
garnishing to "beautify" the food and make it more tempting to eat. Despite creating a
good visual effect for food, Only Parathas will not compromise "looks" with the main
purpose of eating; that is, to ease your hunger.

In other words, the restaurant feels that servings have to be reasonably large so that
customers have a proper meal and they leave the place feeling full and not as hungry as
when they came!

11. Win back lost customers:-

Research shows that a business is twice as likely to successfully sell to a lost customer as
to a brand new prospect. Yet, winning back lost customers is frequently the most
overlooked source for incremental revenue in many firms. Why? Because most firms
consider a lost customer is a lost cause.

Only Parathas CRM programme concentrates not only for acquisition and retention but
also for win-back. Therefore they constantly send Mailers, sms, emails to its lapsed
customers in order to keep them updated about the happenings of their hotel & to give
them a feeling of belongingness. This also makes the customers feel that the hotel cares
about their specific needs & has remembered him, in spite of them discontinuing the
services. This helps the lapse customers to think of the service once again

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 ANNEXURE

Questionnaire

1. What is CRM according to you?

2. What strategies are adopted by you to retain the existing customers?

3. How do you decide which h customer to target for your retention programmes?

4. Do you have any loyalty programmes for your customers?

5. What are the benefits of a loyalty programme?

6. How do you train your employees to interact with the customers as they are the face
of the company & it is in their hands to make or mar the service?

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7. How do you differentiate your CRM strategies from those of the competitors?

8. How is your hotel/ restaurant different from the competitors?

9. How do you communicate this differentiation to your customers?

10. Today it is said that focus of CRM is not on retention of customers, but on retention
of share of Wallet? Do you agree to this & why?

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