Hotel Online Special Report

Understanding the
Power of CRM
This article is from the Fall 2003 issue of Hospitality Upgrade magazine.To view more articles covering technology for the hospitality industry please visit the Hospitality Upgrade Web site or to request a free publication please call (678) 802-5303 or e-mail.
by Neil Holm

Often referred to as a type of technology, customer relationship management (CRM) is first and foremost a business philosophy Ė a way to consistently treat your guests right. Technology is the enabler that helps get useful information into the hands of your management and staff so that they can more powerfully foster guest satisfaction and loyalty. The big payoff is increased revenue, increased profits and more targeted marketing efforts.

CRM solutions typically evolve from simple manual processes, to standalone software and eventually to fully integrated systems spanning all channels and guest touch-points. The ability to analyze historical data in countless ways, including gives strategic decision makers the factual knowledge they need to guide the organization toward its goals, and gives front line staff the customer knowledge they need to treat their guests like gold. 

CRM technology has become an important force in many industries,  hospitality included, that can help give hotels the edge over competitors while maximizing profitability, revenue and customer satisfaction. Some organizations may be more technically advanced than others but the CRM journey is a continuous one. As more data is gathered over time, new insights are illuminated and acted upon.

CRM Tools

Hotels generally gather information through their PMS, uploading and retrieving information regularly from a CRM database. Some hotels can handle their CRM requirements directly from the PMS alone especially when upgraded with increasingly powerful modules that have query capabilities.

But the more robust and powerful practice is to implement horizontal CRM systems designed specifically for the purpose of gathering data from multiple sources, scrubbing the information to enhance data integrity and analyzing data in a myriad of ways. The CRM must be fully integrated with existing CRS, PMS, Web site and other IT infrastructure and architecture.

Benefits and Pitfalls

When CRM is mastered, corporate benefits abound. Revenue and occupancy get a boost from cross-selling and up-selling to existing loyal customers, attracting new customers and providing services through multi-channels making it easier for guests to purchase services. Differentiation occurs when you create customer loyalty by responding to customer needs and preferences in ways that enhance their lifetime value to you as an organization. Enhanced decision making helps top level management steer the company closer to its guest-centered vision. 

However, because CRM spans the entire organization it is only as good as its weakest link and is susceptible to failure mainly due to lack of buy-in, planning, training and overall leadership. To help CRM succeed in your organization, you need to remember these four basic tips:

1.) Share the vision and train with rigor to ensure data integrity.

CRM is an enterprise-wide commitment encompassing all elements of the organization. Key leaders need to unfailingly convey the overall corporate vision of how they expect CRM to help achieve goals. CRM should ultimately give staff more decision-making power, helping them to anticipate customer needs more quickly and accurately. 

Feeding accurate information to the CRM ultimately rides on the shoulders of hotel management and staff. If data entry is inconsistent or inaccurate, the value of the CRM plummets. Proper training is the key to successful implementation of CRM. Standardized input is essential and ongoing monitoring and training is important to ensure that data entry standards remain high.

2.) Plan on all levels to foster buy-in and get perspective.

Get feedback from all parts of the organization on how they interact with guests now and how they could see themselves delivering better service in the future. Map out all guest touch-points and re-evaluate key processes in light of improving the guest experience. Your plan should be aligned with your overall business and marketing strategies and outline how your property will build customer loyalty.

Prepare a complete business case including solid ROI estimates when deciding on the tools you will use to collect your data. Review your IT skill level and how your technology outlook is aligned with overall corporate goals. Ensure that youíve amply budgeted for training and change management to ensure that technology and processes are adopted successfully.

Purchasing CRM systems can be a big ticket item. If you donít have the skills in-house to objectively evaluate the multitude of options available, hire a consultant to take on the process for you. Often an outside objective third-party who is not tied to a specific technology can quickly shortlist the key vendors that match your needs and help you develop the solution that works best. Experts can question vendors in areas where your basic systems know-how may be limited, saving you time and money in the long run.

Donít bite off more than you can chew. Work back from your vision and define achievable steps for implementing your new system. Work on basic elements first, and when achieved successfully, move onto the next stage.

3.) Optimally use data to enhance ROI.

The two most important ways to use your CRM data are to enhance the guest experience and to leverage marketing strategies. Enhancing the guest experience with CRM technology helps you know what guests want before they even walk through the front door. Know which are your most important customers and treat them like gold. Your staff should have the knowledge to offer the right service at the right time to the right guests.

To leverage marketing strategies, CRM provides powerful customer segmentation, marketing, advertising and media analysis. Truly knowing who your customers are can help you pinpoint communications more accurately improving your marketing ROI. You may find that some guests are more inclined to respond to discounts, while others prefer extras like room upgrades or dinner packages. By effectively targeting the right offers to the right guests, your revenue increases. Guests are less annoyed because you are marketing offers they are interested in and in the way they want be communicated with.

4) Constantly measure and fine-tune your strategies.

I canít overstate the importance of tracking results consistently and actually using the information to facilitate better business decisions. Keep a thorough contact history for each customer by tracking when, how and what their response was for each communication. For example, you can gauge the success of campaigns by tracking separate 800 numbers to decide which customers responded to which offers and why. Measurements provide constant feedback to help modify the CRM strategy and monitor the customer experience.

Whether you use advanced CRM technology or not, focusing your attention on your guests in ways they appreciate can only help improve your revenue and ultimately the bottom line.

Neil Holm is president of hyphen. Neil can be reached toll-free at (877) 448-7246 or (604) 685-8632.

©Hospitality Upgrade, 2003. No reproduction or transmission without written permission.


Geneva Rinehart
Associate Editor
Hospitality Upgrade magazine 
and the Hospitality website

Also See: The Case for Self Service in Hospitality / Marvin Erdly and Amitava Chatterjee / Hospitality Upgrade
Magazine / October 2003
Five Questions to Ask Online Distributors / Michelle Peluso / Hospitality Upgrade Magazine / October 2003
Surf's Up - Internet Marketing for Destination Properties / Marvin Erdly and Amitava Chatterjee / Debra Kristopson / Hospitality Upgrade Magazine / October 2003
Wireless Changes Everything; So, do ya want a latte with that or what? / Jocelyn Valley / Hospitality Upgrade Magazine / June 2003
Customer Awareness or Customer Beware? Data Security in a CRM-Obsessed Industry / Elizabeth Ivey / Hospitality Upgrade Magazine / June 2003
Your Magnificent Selling Machine Would you Prefer Your Hotel to Get: the Web Hit or the Phone Call? / Robert Camastro / Hospitality Upgrade Magazine / June 2003
Tradeshows & Economic Soldiers / Dan Phillips / Hospitality Upgrade Magazine / April 2003
Hotel Telecommunications in the 21st Century / Geoff Griswold / Hospitality Upgrade Magazine / March 2003
The ABCs of CRM  / Mark Haley & Bill Watson / Hospitality Upgrade Magazine / March 2003
Getting the Most out of Your IT Investment / By: Clay B. Dickinson / Hospitality Upgrade Magazine / Fall 2002
The Role of Paper in a Digital World / By: Bill Fitzpatrick / Hospitality Upgrade Magazine / Fall 2002
The Rotten Pineapple (international symbol of hospitality) / By: Steve D'Erasmo / Hospitality Upgrade Magazine / Fall  2002
Focusing on Labor Can Improve More Than Just Cost / Hospitality Upgrade Magazine / Summer 2002
Attention Hotels - An Ounce of Prevention is Worth a Pound of Cure / Elizabeth Lauer Ivey / Hospitality Upgrade Magazine / May 2002 
HOSTEC - EURHOTEC 2002 - Room for Improvement / Christel Dietzsch / Hospitality Upgrade Magazine / Feb 2002 
Technology and the Human Touch / Dan Phillips / Hospitality Upgrade Magazine / Spring 2002
Wireless Technology:  Where We Have Been, Where Are we Going? / Geneva Rinehart / Hospitality Upgrade Magazine / Spring 2002
Effective Customer Relationship Management (CRM) Implementations / John Schweisberger and Amitava Chatterjee, CHTP / Hospitality Upgrade Magazine / Fall 2001 
What's Up With Call Accounting Systems (CAS) / Dan Phillips / Hospitality Upgrade Magazine / Fall 2001 
Technology Dilemmas: What have IT investments done for you lately? / Elizabeth Lauer / Hospitality Upgrade Magazine / Summer 2001
Full Circle from Centralized to ASP - The Resurrection of Old Themes and a Payment Solution / Gary Eng / Hospitality Upgrade Magazine / Summer 2001 
A High Roller in the Game of System Integration / Elizabeth Lauer / Hospitality Upgrade Magazine / Spring 2001 
CAVEAT EMPTOR! Simple Steps to Selecting an E-procurement Solution / Mark Haley / Hospitality Upgrade Magazine / Spring 2001 
Your Bartender is Jessie James and He Needs to Pay for College / Beverly McCay / Hospitality Upgrade Magazine / Fall 2000 
Choosing a Reservation Representation Company / John Burns / Hospitality Upgrade Magazine / Spring 2001 
Understanding and Maximizing a Hotelís Electronic Distribution Options / by John Burns / Hospitality Upgrade Magazine / Fall 2000 
The Future of Electronic Payments - From Paper to Plastic and Beyond / J. David Oder /  Hospitality Upgrade Magazine / Summer 2000
Timeshare Technology Steps Up / by Elizabeth Lauer / Hospitality Upgrade Magazine / July 2000 
Biometric Payment: The New Age of Currency / by Geneva Rinehart / Hospitality Upgrade Magazine / Mar 2000 

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