CRM Practices In Hotel Sector - Case Study Of Melbourne Hotels, Victoria - Essay.

Importance of Customer Relationship Management in Hotel Sector

Discuss About The Relationship Practices In The Hotel Sector.

Most businesses today are facing vital issues in the area of customer service, service provision and retention both within and without. The different features of the demographics in addition to the increasing customer expectations are forcing entities to reconsider their customer relationship management practices (CRM) (Meyers, Durlak, and Wandersman, 2012). The current market is characteristic of stiff competition making organizations to devise ways to keep up with the drastic changes. Customer service is defined by Turban et al. (2017) as a service of activities formulated to improve customer satisfaction level, which is the understanding that a given product or service has met the expectations of the customer. Customer service has a primary function of generating sales and increasing profit in an organization (Jasmand, Blazevic, and de Ruyter, 2012). Thus, based on such viewpoint, the management will be right if they incorporate as part of a general approach to systematic improvements.

Customer care is a competitive tool that quickly distinguishes one business from the other (Chang, Park, and Chaiy, 2010). The principle is to observe excellent customer service to ensure significant benefits (Grove et al., 2015). Due to the ever-increasing competition in the hospitality sector, most of the hotels are geared towards acquiring a competitive edge through customer care (Mohammed, and Rashid, 2012). Effective implementation of customer relationship management strategy has proved to be beneficial to those enterprises that have adopted them; such businesses can also profit from increased revenue through improved market segmentation, personalized services and products, improved service and product quality, and high customer retention and loyalty (Akroush et al., 2011).

The objective of the study is to find out customer relationship management in the hotel sector a case study of Melbourne hotels, Victoria.  The research findings will establish an advanced understanding of the importance of customer relationship management in business activities of the hotel sector in Melbourne and increase revenue. The outcomes of the study will be cited as references for further research. Additionally, this study will allow scholars to determine additional areas for research on customer relationship management in Melbourne hotels. As a result, the quality of customer service will be improved leading to increased sales, revenue, and corporate image. The research findings will as well be cited by academicians and deductions made because of its contribution regarding conceptual and theoretical frameworks in the part of customer relationship management.

Customer Service and its Primary Function

The policy makers both in public and private sectors will find the outcomes and recommendations useful to the hotels in Melbourne because they can use the empirical information as a basis for the formulation of their policy on customer relationship management. The findings will also be relevant to the Victoria Tourism Industry Council (VTIC) regarding the nature of customer relationship management practices in the hotel sector. They are to find the information related to them because better CRM practices in the hotel sector will significantly impact tourist attraction in the nation. The hotels’ management will also gain an understanding of the significance of CRM in the hotel sector and also re-assess their service policies if need be to survive in the highly competitive Australian service industry.

The scope of the survey will be limited to the study on the customer relationship management practices in the hotels located in Melbourne, Victoria. The research will deliberate on four theoretical models of customer relationship management namely technology-based, knowledge management, CRM organization, and strategic customer focus. Also, customer relationship management practices and the process will be discussed.  Furthermore, this survey will focus on five, four and three-star hotels in Melbourne. The study will collect data from employees from the sample hotels, especially those from the marketing and finance department.

 A semi-structured questionnaire will be designed into two parts in line with the study objectives. Part one will be formulated to acquire demographic characteristics of the hotel staff, whereas part two will comprise of questions that are related to customer relationship management practices in the hospitality industry in Melbourne. The questionnaires will then be delivered to the employees and then picked after two weeks, edited for completeness and reliability then the data analyzed, deduced according to the objectives using SPSS.

 The stiff competition in the current market requires organizations that accurately understand the dynamic needs of the customers and can meet them by continually scanning the business environment and providing the best quality service or products to the consumers. According to Colquitt et al. (2011), the increasing instability of the environment implies that the future will necessitate a high transformation level on the part of the businesses. Consequently, enterprises are confronted with very intense competition and thus low sales volume and profit or sometimes losses.

Reimann,  Schilke, and Thomas (2010) attribute such a scenario to inadequate or absence of customer relationship management practices. Based on our research no studies have attempted to address CRM practices in the context of Victoria more so Melbourne. Owing to the significance of the survey as already outlined, it is imperative that research is done on CRM practices in Melbourne hotels. This survey is expected to fill the research gap through the following objectives:

1. To find out the customer relationship management practices in the hospitality sector in Melbourne
2. To ascertain the difficulties that Melbourne hotels face in the implementation of customer relationship management strategies.

Competition and Customer Care

Al-Azzam (2016 ) studied the relationship between customer relationship management dimensions and performance of 50 Jordanian hotels using correlation and regression analysis tests. The study applied an individual survey research design and with the help of a questionnaire to gather data. The study outcomes showed a significant relationship between the dimensions of CRM and hotel performance. The variables considered in the study include consumer orientation, knowledge control, CRM organization and technology-based CRM. The CRM technology had a substantial and positive association with the performance of the hotels. The correlation tests show that technology-based CRM had the most significant correlation of .46 followed by customer orientation (.38), knowledge management (.38) and lastly CRM organization (.35). The correlation was significant at 0.01.

Thus, effective implementation of CRM technology has an essential role in increasing marketing capabilities, which leads to improved business performance. The authors attribute this to the advancement in information communication technology and the adoption of different CRM systems that reduce internal costs. Also, the CRM system has enabled hotels to acquire correct information from reliable sources promptly, thus allowing the hotel to management to make appropriate decisions on the delivery of better services.

Mohammed, Rashid, and Tahir  (2014) surveyed hotels in Malaysia to ascertain the relationship between CRM technology and organization performance with the mediating role of marketing competencies, that is strategy and execution. The dimensions of corporate performance include financial, consumer, organizational process and education and development. The survey applied regression and correlation test analyses. The study outcomes show a significant positive association between CRM technology and the four scopes of organizational performance with the customer having the strongest correlation of .38 followed by the corporate process (.36), financial (.35) and lastly education and development (.30) in that order. Hence, CRM technology has an essential function in enhancing corporate performance.

Furthermore, the outcomes of the survey show that a positive vital relationship exists between CRM technology and marketing planning competencies and marketing enactment competencies, with the latter being more strongly correlated than the former. There was also a positive, important association between marketing planning competencies and marketing enactment competencies and the different aspects of hotel performance.  Concerning the findings of mediation, there is a mediating effect of the marketing capabilities on the association between CRM technology and the different scopes of hotel performance. The mediating elements (marketing planning and marketing enactment competencies) had an almost equal effect on the association between CRM technology and various aspects of hotel performance.

Effective implementation of CRM and its Benefits

The study by Hoseini and Naiej (2013) evaluated the link between CRM and clear performance measures on the Iranian banking sector. The variables of the CRM process included initiation and maintenance relationships (independent variable), whereas, the performance measures were financial, consumer, organizational process, and education and development (dependent variable).  Regression factor analysis was used to test the impact of the study variables. The outcomes show a positive relationship between the CRM processes and the performance of banks. The strongest influence on financial performance was the sustenance relationship process (0.95) followed by consumer-based performance (0.89). The association between the initiation association process and education and development performance (0.28) had the least impact.

Kim (2012) examined the influence of the CRM process on customer parity factors and consequently firm performance. The study applied a three-stage model; CRM process (customer acquisition, retention, and expansion), consumer parity factors (value, brand and relationship parity) and firm performance, with the consumer parity factors playing the mediating role between CRM process and corporate performance. The findings indicate that organizational CRM approaches first have an impact on parity factors, and these factors then define the corporate performance. Customer acquisition influenced both the consumer’s value and brand parity. However, customer retention is inversely proportion to customer acquisition; but with a single positive impact on relationship parity.

On the other hand, customer expansion influenced the entire customer parity factors. The findings also reveal that customer parity factors could be as well act as excellent predictors of corporate performance. While all the customer parity factors have revealed constructive associations with firm performance, they have been demonstrated under the criteria of association, value, and brand parity with regard to the impact level of business performance.

Yaghoubi, Asgari, and Javadi (2017) surveyed the influence of CRM on firm productivity, customer allegiance, satisfaction and belief in some Iranian hospitals. The study adopted a descriptive correlation design on nurses sampled by the stratified random approach. The areas of CRM with the most significant positive impact on customer satisfaction were customer loyalty (0.83) and trust (0.81). The highest effect is as a result of established customer loyalty and through the presence of patient complaint management in the health center. The diversity of services as a component of CRM had the highest effect, and this was attributed to the availability of consultation services and new services meeting patient expectation and needs.

The CRM dimension of Customer interaction had a significant effect (0.74) on the study objective. The findings attributed such an important impact to the proper handling of the medical practitioners alongside patients and sustained dialogue with patients after they leave the hospital. Customer identification and prioritization had a high (0.72) effect as a CRM component. This the hospitals achieved through determining the customers who were about to terminate their association with the hospital and then trying to retain and increase their loyalty, thus reducing costs and improving profitability.

Objectives of the Study

References

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but with a single positive impact on relationship parity.

References