Research on CRM System in Online Travel Agent in the Context of Internet

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1 Research on CRM System in Online Travel Agent in the Context of Internet Dong Zhiliang, Yang Lihua Shijiazhuang University of Economics Shijiazhuang City, Hebei Province, P.R. China Abstract As the Internet gets increasingly popular, it is inevitable for the concept of Customer Relationship Management (CRM) to be applied in Online Travel Agent at its maturity stage, driven by the powerful information technology and strong corporate demands. In the age of e-commerce, customer-centric CRM has become a key for various tourism enterprises to enhance their core competitiveness. This paper analyzes the feasibility of CRM implementation in Online Travel Agent in the context of Internet, and takes Ctrip as an example to illustrate profit model of Online Travel Agent and CRM system architecture. Keywords - Internet; Online Travel Agent; CRM system I. INTRODUCTION In the age of Internet, as technologies advance, service models different from traditional Internet come into being, such as e-commerce. Similar to banking, insurance, telecommunications and other industries, tourism also needs widespread support from customers. Travel agencies, tourist communications and tourist hotel are the three major pillars of modern tourism. They compete with other tourism enterprises during the business informationization strategy (BIS) establishment process, which corresponds to the customer-centric management concept advocated by the CRM strategy. With the gradual rise of travel websites, Online Travel Agent has begun to mature over years development. Online Travel Agent and CRM have been referred to as hot research topics. II. ONLINE TRAVEL AGENT IN THE CONTEXT OF INTERNET A. Overview of Online Travel Agent Online Travel Agent (OTA) means achieving electronic business activities in all aspects of tourism on the basis of advanced network information technology, including publishing and communicating tourism-related basic information and business information on the Internet; publicizing and promoting tourism by means of Internet; carrying out pre-and after-sales services for tourism activities; inquiring and booking travel products and making payment though Internet. Electronization of internal processes of tourism enterprises and applications of management information systems are also included [1]. Online Travel Agent is a business system of operation and distribution in the tourism industry by means of the most advanced electronic modes based on tourism information database and e-commerce banks in the context of Internet, involving a series of business activities including enquiry, quote, booking, payment and distribution, etc. carried out by tour operators online [2]. B. Development and status quo of Online Travel Agent As e-commerce gets increasingly more mature, major domestic travel agencies have set up their own professional websites on the Internet, or performed e-commerce on platforms provided by some intermediary websites such as Qunar, Ctrip, Taobao, etc. Initially, there are limited professional tourism websites domestically, with relatively simple content on company introduction. Most of the websites are only specialized portals, involving introduction to major domestic tourist routes, attractions, common sense for travel as well as travel notes. With specific concepts and clear thinking, those websites are far from satisfactory for lack of professional resources, scale, content and popularity. As a result, the traffic is not optimistic. After this tough nut is revealed, it is gradually recognized that the "web-centric" Online Travel Agent has basically similar models, content without features, and redundant construction. After that, based on a comprehensive analysis of the current tourism environment and the Internet environment, various tourist websites perform an accurate positioning to have a comprehensive understanding of themselves, found distinctive websites and cooperate with well-known intermediary website to share a variety of resources and make space operations of Internet tourism market come into being. At this stage, online travel giants nationwide and hot spots of venture capital have turned to Online Travel Agent. According to the World Tourism Organization, tourism e- commerce will account for a quarter of the total global travel transaction amount within the next five years. Currently, about a quarter of tourism products are ordered through the Internet among the world's major tourist sources. In many countries, travel enterprises and related companies of aerospace, automotive, hotel, attraction and travel agency have set up their own websites with interlinks and further enhanced online promotions. Online sales of some tourism products as well as online reservations of tickets and hotels have been achieved. As the informatization progress advances and the tourism industry thrives. Online Travel Agent has changed the operational DOI /IJSSST.a.16.5B ISSN: x online, print

2 mode of traditional travel agencies and is developing at an unprecedented pace. III. CUSTOMER RELATIONSHIP MANAGEMENT A. Concept of Customer Relationship Management Customer Relationship Management (CRM) is a customer-centric business and management philosophy as well as a new management mechanism, which aims to improve the relationship between enterprises and customers. Human resources, business processes and technical expertise are effectively integrated in fields of marketing, sales, services, technical support and customer-related aspects, providing perfect integration to various fields involving customers or consumers. As a result, enterprises may cater to customer demands with lower costs and a higher efficiency, establish a one-to-one marketing model with customers based on the learning relationship, increase customer satisfaction and loyalty to the maximum extent, restore lost customers, retain existing customers, develop potential customers, explore the customer groups that may bright about a maximum of value to enterprises [3]. Core content of CRM is to constantly improve and manage sales, marketing, customer service, support and other business processes related to customer relationship, and enhance the automation level of all aspects, so as to shorten the sales cycle; reduce costs; increase sales volume, revenue, profitability and market share; constantly seek new market opportunities and sales channels; ultimately improve the core competitiveness of enterprises; allow enterprises to remain invincible in the current fierce market competition. Advanced ideas and best practices are embodied in CRM, helping enterprises to achieve aforesaid goals through various advanced technical means. As a customer-oriented operational strategy, CRM is anything but a software system or clever but useless operational management skills; instead, it integrates multiple communication channels such as faceto-face, telephone, WEB access, etc. Companies can choose appropriate channels and communication modes to communicate effectively with potential customers according to customers references. To maximize their operations, take care of customers and obtain gains, enterprises must be tolerant, perform continuous learning and thinking, and accumulate practical experience in constant trial and error. B. CRM type CRM can be divided into three types, namely operational CRM, analytic CRM and collaborative CRM [4], specifically shown in Figure 1. Figure 1 CRM type C. CRM application feasibility in Online Travel Agent CRM in Online Travel Agent can be used to integrate communication channels and internal services of tourism enterprises, and provide personalized services. CRM aims to identify customer needs, and its implementation platform in the Online Travel Agent is shown in Figure 2. In terms of integration of communication channels, CRM can integrate almost all media communication DOI /IJSSST.a.16.5B ISSN: x online, print

3 channels, such as WEB, TEL, WAP, FTP, E-MALL, FAX and traditional face-to-face communications, so as to meet different customer requirements. Whatever channel customers choose to contact the enterprises, CRM can obtain consistent information in a timely and accurate manner, so as to improve service quality, reduce operating costs, free some employees from reception work and decrease human resource costs. In terms of integration of internal services, CRM will give full play to its functions of sales and business market planning and take advantage of low-cost Internet and other media resources, so as to reduce service costs of enterprises; at the same time, enterprises can create unified customer database for multiple business projects and various customer groups, divide customer groups through summary and analysis, and develop different sales plans and marketing tools. In terms of provision of personalized services, the special industry of tourism services and products is faced with more prominent requirements for personalized customer services. CRM can subdivide target customers using database information. For instance, for new customers, the system will automatically identify the customer type, record complete customer information, provide users with timely, interactive and multi-channel full services, as well as customized business rules and sales recommendations, and add in follow-up services by means of , telephone and other tools. CRM can also use data exploration techniques to perform user data statistics and organization, make appropriate data analysis and correlation analysis, so as to enable enterprises to understand customer preferences and needs as much as possible, and deliver personalized and more appropriate services at the most appropriate time through convenient channels [5]. Figure 2 Online Travel Agent CRM implementation platform DOI /IJSSST.a.16.5B ISSN: x online, print

4 IV. CRM SYSTEM IN ONLINE TRAVEL AGENT A. CRM closed-loop system in Online Travel Agent Under the Internet environment, implementation of Online Travel Agent CRM include the identification and validation of customer needs, communications with customers and management, specific application of customer information, customer response and feedback. In this process, in order to achieve specific customer information application in corporate marketing activities, customer response and feedback can be re-entered into the system, to achieve dynamic adjustment of corporate marketing behaviors. CRM implementation is a dynamic cycle. The cyclic operation of the system forms a "seamless" closed-loop system, shown in Figure 3 [6]. CRM analyzes the constantly accumulated information based on previous communications with customers, segments and reorganizes the customer base, providing a basis for communications strategy development in further customer communications. Figure 3 Online Travel Agent CRM closed-loop system B. Business model of Online Travel Agent and CRM system architecture Currently in China, relatively mature online travel agents include Ctrip, Qunar, etc., which are all high-tech companies. They provide millions of registered members with all-dimensional travel services including hotel reservations, air ticket booking, holiday travel booking, business travel management, special offers and tour consultation by means of telephone calls and Internet. The main revenue comes from business agency fees and advertising revenue. The profit model is composed of websites, destination hotels, air ticketing agents, travel agencies and netizen markets. That is, they trade with netizens and obtain scheduling agency fees, and rebates from destination hotels, air ticketing agents, travel agencies and other cooperative enterprises. They bring about profits for customers and suppliers while generating profits for themselves. The profit model of Online Travel Agent is shown in Figure 4 [7]. DOI /IJSSST.a.16.5B ISSN: x online, print

5 Figure 4 Profit model of Online Travel Agent CRM in Online Travel Agent has the following functions that can be grouped into three aspects. 1, informatization for the two business processes of sales and customer services; 2, integration and automation for means required by customer communications, such as telephone networks; 3, processing of information accumulated over the aforesaid two functions, so as to generate customer functions and support strategic and tactical decision-making. Under the Internet environment, besides objective relationship management, Online Travel Agent CRM system should also add featured content. Take Ctrip as an example, the specific content of the CRM system is shown in Figure 5 [8]. Figure 5 Online Travel Agent CRM taking Ctrip as an example The CRM system of Ctrip can be mainly divided into three sections: 1, call center: Seventy percent of the website operations are accomplished by the call center. The call center has the functions of information consulting, number inquiry by switchboard, complaint handling, call recording, fax applications, outbound applications and so on. These DOI /IJSSST.a.16.5B ISSN: x online, print

6 functions will be classified and processed by operators and distributed to corresponding departments, so as to ensure accurate order processing and quality services. In terms of outbound applications, customer satisfaction callback is performed via telephones or text messages, so as to achieve a CRM closed-loop process of the call center, reduce operating costs, improve customer satisfaction and facilitate management. 2, Ctrip website: The site provides customers with a lot of factual information, such as attractions, hotels, tourist routes and a variety of offers and discounts. Rankings in major search engines are improved by advertising on the portal. As for the depth of the website, large-scale databases, technology facilities for booking center and introduction of tourist attractions are established, providing registered users with personalized services as well as consumer benefits online and offline. 3, data processing systems: The website combines a powerful call center system with the website and the background data processing, perfectly linking business provision and customer value, performing customer segmentation and understanding customer needs. C. Development trend of Online Travel Agent CRM In future development, it is essential for Online Travel Agent CRM to seek the management concept of maximum customer value and an improved state. In the context of "customer-orientation", the B2B management model comes into existence. CRM system emphasizes "customerorientation"; manages customers; builds a complete management business process as customer life cycle occurs and develops; matches enterprises business functions and business processes in accordance with customer demands; performs dynamic management of business information and value status; enhances enterprises competitiveness and profitability comprehensively. To give full play to the role of CRM in Online Travel Agent, staff training and motivation should be conducted in addition to the customercentric philosophy, so as to maximize the effect of CRM systems in a gradual manner. V. CONCLUSION Under the Internet environment, CRM is indispensable for Online Travel Agent to ensure a steady stream of customers, effectively meet customer needs and make profitability. CRM system provides managerial and technical support to Online Travel Agent, so that travel information, travel business, travel management and background data can be interlinked and interacted, providing powerful data support. Construction of tourism resource database is the core of its implementation; data warehousing and data exploration technology are primary means. Online Travel Agent should choose appropriate CRM systems according to its own stage of development; work closely with software vendors; always adhere to the "customer-centric" concept in terms of technology and management; proceed from the interests of customers; analyze customer needs; create an effective composition channels; ultimately achieve customer value. ACKNOWLEDGEMENTS The work is supported by the National Natural Science Foundation of China (No ) and the Key Disciplines Fund of Technology Economics and Management of Hebei Province. REFERENCES [1] Li Binning, Customer Relationship Management (CRM) Applications in Online Travel Agent, Market Modernization, vol.3, no. 10, pp , [2] Duan Xiaohua, Study of Customer Relationship Management in E- commerce Environment, Shaoyang College Journal (Social Science Edition), vol. 9, no. 4, pp , [3] Coomber. R. Unleash the Potential of Your CRM System.Computing, vol. 29, no. 11, pp , [4] Wirtz Bernd W, Lihotzk Nikolai, Customer Retention Management in the B2C Electronic Business.Long Range planning, vol. 36, no. 6, pp , [5] Feng Fei, Comparative Study on China s B2C Tourism E-commerce Revenue Model Taking Ctrip and Spring Tour as Examples, Tourism Tribune, vol. 18, no. 4, pp , [6] Xu Yong, Zhao Yan, Fan Zheng, et al, Ctrip Case (2007 Update), Shanghai Management Science, vol. 30, no. 1, pp , [7] Soe- Tsyryuan, wei-lun Chang, Mixed-initiative Synthesized Learning Approach for Web-based CRM. Expert Systems With Applications, vol. 20, no. 9, pp , [8] Peppers, D. and Rogers, M., One to One B2B: Customer Development Strategies for the Business-to-business World, Caners Business Information, Inc., vol. 90, no.34, pp , 2001 DOI /IJSSST.a.16.5B ISSN: x online, print