THE KEY SUCCESS FACTORS ON THE CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM IN TRAVEL AGENCIES

Transcription

1 Pak. J. Statist Vol. 29(5), THE KEY SUCCESS FACTORS ON THE CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM IN TRAVEL AGENCIES Hung Chia-Jen Department of Hospitality Management, Chien Hsin University of Science and Technology No.229, Jianxing Rd., Zhongli City, Taoyuan County 32097, Taiwan, ROC ABSTRACT In the 21 st century, tourism abroad has become a trend for domestic people that the competition among travel agencies has become fierce. To stand out in the highly competitive environment, constantly pursuing new development through innovation is necessary. Travel agencies therefore have to establish effective Customer Relationship Management System to precisely segment customer preference, find out the potential demands of customers, and further promote acceptable tourism products. The earnings and the development of travel agencies can be merely maintained by providing customers with required products. Based on the concept of Customer Relationship Management System, this study applies Analytic Hierarchy Process (AHP) to establish the hierarchy model with the dimensions of Technology, Organization, and Function, i.e. to layer, structuralize, and quantify the indicators in Customer Relationship Management System. By investigating the supervisors and the employees in travel agencies, it tends to establish the indicators in Customer Relationship Management System and the priority system. The research outcomes show that (1) the experts rank the priority and importance of the three evaluation factors as Organization, Technology, and Function and (2) User participation appears the highest global consistency, followed by Development platform/technology familiarity, and Support of top managers is mostly emphasized. KEY WORDS Travel Agency; Customer Relationship Management System; Key Success Factors; Technology; Organization. 1. INTRODUCTION The 21 st century is the generation when people focus on tourism and leisure life as well as an era centering on sustainable development. With increasing ideology of customers, fine social division of labor, and the implementation of two-day weekend in Taiwan, people start to pay attention to living quality in the spare time. The increase of leisure and recreation time has therefore resulted in the prevalence of tourism and travel. In consideration of security and budget, most domestic people select to participate in 2013 Pakistan Journal of Statistics 785

2 786 The key success factors on the customer relationship management system group package tours arranged by travel agencies. When people pay more attention to the leisure service industry, travel agencies are the first to be affected. In such a customer-oriented era, travel agencies can no longer remain the strategies in product orientation; instead, they are required to precisely segment customer preference, find out the potential demands of customers, and further promote acceptable tourism products. The earnings and the development of travel agencies are tightly connected with providing customers with demanded products. In this case, the competitive model for travel agencies will be adjusted from product-centered to customer demand-centered strategies. However, it has become an urgent issue for travel agencies to customize tourism products for successfully integrating front and post operations and deeply understanding the meaning and the application of Customer Relationship Management (CRM). 2. LITERATURE REVIEW 1. Customer Relationship Management System Kandell (2000) regarded the key of CRM being customer demand-centered that the life cycle of customers was treated as an important corporate asset and the major objective was to maintain and promote customer satisfaction. It aimed to receive the most benefit by satisfying the demands of customers with distinct products and services at the same time. The key marketing contained one-to-one marketing and numerous customizations. Ratcliff (2000) considered CRM as a marketing-based new concept which was utilized for effectively remaining the relationship between the business and the customers. Information technology was regarded as an aid of CRM to allow the relative work being effectively executed. Basically, customer service and present customer maintenance are preceded by the representatives in call center in CRM where the representative analyzes the relevant data of customers for marketing and cross-selling to satisfy individual demands. Chen (2000) indicated that Customer Relationship Management was to largely collect and store customer data with information technology and further analyze them so as to find out useful knowledge for decision-making and planning relative operating activities as well as to implement a complete program. Tung (2000) defined Customer Relationship Management System as a supportive system for customers, including marketing and sales. In regard to marketing, market research, test and development management of products, advertising and marketing, activity management, and segmentation analysis of profits and customers were covered. Sales, on the other hand, contained telemarketing and call service system. The program for CRM should be data warehouse-centered and the relative decision support management systems were the application. In other words, Decision Support System was the interface system for marketing analyses and customer support services (e.g. analyzing customer data in Call enter and making decisions). The products for Customer Relationship Management are divided into operational, analyzing, and assistant software. Operational applications include improving customer

3 Hung Chia-Jen 787 services, online marketing, or automation marketing; analyzing applications tend to establish a data warehouse system for analyzing customer data and sales data, or for permanently improving customer relationship; and assistant applications aim to establish websites or online communities for the customers among enterprises or personalized services. The application software, with the functions of marketing, operation, service, and sales, would automate the operation of customer services so as to reduce costs, increase profits, and collect more complete customer data to support or increase sales (Trepper, 2000). With the establishment of operation orientation and customer orientation, Karimi, Somers& Gupta (2001) classified the information system of financial industry into Information application leading group, Information application lagging group, Operation function-focused group, and Marketing function-focused group. From the literature, Information application leading group provided the most marketing processing functions that it appeared better competitive advantages than the other groups. Tung (2000) indicated that banks used to apply information systems to customer data management and customer support services that CTI Call Center or Voice Response Units has become the major application of CRM in banks and credit card user centers. Kuo (2001) organized thirteen key success factors in CRM, including one-to-one marketing, customer support and service, information management, marketing activity, management of CRM project leaders, looking for customer knowledge/taking care of present customers/increasing new customers, bank website analysis, sales data analysis, data warehouse/data excavation, customer center, computer and telephone integration, service/sales personnel promoting CRM, and sales activities. Su (2001) pointed out the objective of customer management being to treat customer data as the corporate asset. In other words, customer data for the business or individuals were integrated for effective applications and analyses; moreover, the relationship between the customers and the organization and the accepted information should be mastered for customer classification which would further become the basis of differentiated services. Berson, Smith& Thearling (1999) mentioned to utilize Data Mining for establishing the required functions in CRM system. After collecting and maintaining customer data, Data Mining could achieve the process functions of completing cross-sales, segmenting customers, ranking customer values, and discovering potential customers. Kuo (2001) proposed relationship marketing to establish permanently satisfactory relationship with primary groups, such as customers, suppliers, and distributors, so as to maintain stable cooperation and business as well as to create win-win situation. The result of relationship marketing aimed to establish a unique company asset, i.e. Marketing Network. When favorable Marketing Network among key members was established, the company would be likely to constantly develop the market and make profits. Kirby (2000) also proposed ten key success factors in CRM, including uniform information storage, regularly examining data from customer activities, managing communication contact from all aspects, click analysis of websites, providing customers with self-service access, offering customer measurements, one-to-one marketing, customer maintenance and reward, and opinion feedback management. Hu (2001) pointed two key success factors in CRM, namely People and Institution and system. The former referred to continuous education of enterprises in which all

4 788 The key success factors on the customer relationship management system members were reminded of customers being an important asset and sincerely concerning the situation and the needs of customers, rather than simply selling products to them. The latter regarded a favorable institution or system to collect customer knowledge for systematic analyses, as individual intelligence was different that sincere concern from all employees was insufficient. The knowledge was expected to be well-utilized whenever contacting with customers. Pedraza (2000) proposed twelve principles for successfully establishing CRM that a successful CRM system should be (1) flexible, (2) stable, and (3) customer-focused, (4) master the functions and limits of information technology, (5) emphasize prior customers, (6) create public praise, (7) collect complete, proper, correct, and instant information, (8) establish powerful analyzing functions, (9) integrate marketing into enterprise activities, (10) emphasize customer interaction and conversation, (11) provide all-day operation activities, and (12) cultivate creation and innovation abilities of employees. Thompson (2001) further pointed out five policies for successfully establishing CRM. (1) Transferring values as the priority. Since customers did not concern about the management of enterprises, the re-visit of customers would be more important. (2) People being the core. With good technology, a CRM project was not likely to succeed without the leadership of supervisors, the participation of employees and partners, and the support of customer loyalty. (3) Selecting technical partners of CRM, rather than cheaper sellers. It was important to select a software business which would provide services and commitment for both the company and the customers. (4) Getting on with preparation. CRM was considered as a complex concept which applied several process analyses and planning to prevent costs and time from waste and repetition. Consequently, it was not primary to rapidly introduce CRM software as it might accidentally result in vainness. (5) Treating partners as customers. CRM requires the cooperation among several manufacturers that it is helpful to invest in developing tools for partners for more efficient and beneficial operations. Brendler & Loyle (2001) proposed eight key factors in CRM, including establishing and delivering a definite vision, understanding organizational culture, improving business operation process before introducing new technology, delivering the anticipation of leaders in business management, acquiring support of top managers, selecting management project evaluation, training participants, managers promising to change and solve all possible obstacles. Wixom &Watson (2001) discovered that the factors of support of top managers, support of relative units, sufficient resources, user participation, familiar technology, developing team skills, and data resource system could help successful establishment of data warehouse system. Chase (Bank) has a data warehouse to support Customer Relationship Management functions. The core system is the database for all data in the bank. With data acquisition and analyses, the data could be transmitted to all branches for business applications (Newell, 2000). Some key success factors contain understanding strategic objectives (Somers, 1999) and business information (Foong, 1999). 2. Analytic Hierarchy Process This study tended to apply hierarchy to evaluating the priority of key success factors in the internationization of cultural creation industry, utilize Analytic Hierarchy Process

5 Hung Chia-Jen 789 (AHP) for questionnaire analyses, and acquire the priorities among evaluation indicators. In AHP, hierarchic criteria and other substitutes are assumed independent (Saaty, 1996). Saaty established a hierarchic system model for complex multi-evaluation decision-making in which each level contained clusters composed of nodes with different elements. With systemized matrix operation factors, the quantified results were provided for decisionmakers. Nonetheless, a lot of decision-making problems in Social Science could not be presented the complex connection with AHP because of the interactions among criteria in the same hierarchy or the dependence among various hierarchies (Saaty, 2005). 3. RESEARCH METHOD 1. Research framework Based on the literatures, variables with high significance were organized for the framework of Analytic Hierarchy Process to discuss the key success factors in Customer Relationship Management System as figure 1

6 Key success factors in introducing customer relationship management system 790 The key success factors on the customer relationship management system Developing team skills Technology Data resource system Development platform/technology familiarity Support of top managers Organization Support of various units Understanding strategic objectives User participation Customer clustering/segmentation Customer value Potential customers Provision & maintenance of customer data Function Customer support service Tracking customer problems Customers acquiring service access Computer and telephone integration service Call center Figure 1: Research Framework 2. Questionnaire distribution and retrieval Total 500 questionnaires were distributed to the top ten travel agencies announced by Consumer s Foundation, Taichung, including South East Tours, Phoenix Tours, Hong Thai Travel, Lion Travel, Ever light Travel, Cola Tours, Life Tour, Hi-Lite Tours, Skylark Travel, and Ming Tai Travel. The evaluation items of pre-service, leader service, tour guide service, fare rationality, tour planning, accommodation, and catering were calculated the weighted mean with customer emphasis as the weighted value. After deducting 218 invalid questionnaires, total 282 valid ones were retrieved, with the retrieval rate 56.4%.

7 Hung Chia-Jen EMPIRICAL ANALYSIS 1. Level II evaluation factors in Analytic Hierarchy Process After the questionnaire survey, Level II key success factors in Customer Relationship Management System in Analytic Hierarchy Process were calculated the geometric mean of relative importance for Analytic Hierarchy Process matrices. The consistency ratio C.R.= 0.043< 0.1 showed the consistency of decisions among the experts. The priority and importance ranking of the evaluation factors are listed in Table 1, as Organizational, Technology, and Function. Table 1: Priority Ranking of Key Success Factors in Customer Relationship Management System Priority Key success factors in Customer Ranking Relationship Management System 2 Technology Organizational Function Global consistency of Analytic Hierarchy Process The Consistency Ratio of the Hierarchy (C.R.H.) should be calculated before acquiring the priority of the evaluation indicators. The result C.R.H.= <0.1 showed the global consistency being acceptable. In Table 2, User participation appeared the highest global consistency, followed by Development platform/technology familiarity, and Support of top managers was mostly emphasized.

8 792 The key success factors on the customer relationship management system Table 2: Priority Ranking of Global Consistency in Analytic Hierarchy Process Level II evaluation factors (Hierarchy priority) Level III evaluation factors (Hierarchy priority) Global priority Ranking Developing team skills Technology (0.337) Data resource system Development platform/technology familiarity Key Success Factors in Customer Relationship Management System C.R.=0.034 Organization (0.412) Function (0.251) Support of top managers Support of various units Understanding strategic objectives User participation Customer clustering/segmentation Customer value Potential customers Provision & maintenance of customer data Customer support service Tracking customer problems Customers acquiring service access Computer and telephone integration service Call center CONCLUSION AND SUGGESTION Summing up the data analyses and research conclusions, the practical applications of key success factors in Customer Relationship Management System are provided for travel agencies. The research outcomes showed that the principles of Organizational, Technology, and Function should be mastered. Therefore, for successful Customer Relationship Management System (CRM), the employees in travel agencies should understand that Customer Relationship Management System is the mission for all members and should be

9 Hung Chia-Jen 793 comprehended and supported by top managers. In general, the sales vice president, the marketing vice president, or the general manger should be the supporters in travel agencies, who would define the objectives for CRM project, provide required time, capital, and other resources for achieving the project, and insist on encouraging and supporting the employees in the processing of project, particularly when there are difficulties and problems. The outcomes show that CRM is not the business of a certain project team, but of all employees. As a result, all staff should know the value of Customer Relationship Management System and make effort to promote the success of CRM project. When some individuals or teams could not actively face it, the value of CRM might not be entirely presented. Moreover, travel agencies could analyze the operations by measuring the management performance with data monitor system, internal report management system, decision-making data, and system analysis. In such a process, travel agencies should evaluate the effectiveness of system application with the system suppliers to discover problems, precede modifications in various modules, and enhance the applications. REFERENCES 1. Berson, A. and Smith, S. and Thearling, K. (1999). Building Data Mining Applications for CRM (1st ed.), New York. San Francisco Washington, 16-40, , 2. Brendler, W. and Loyle, D. (2001). 8 Critical factors that make or break CRM. Target Marketing, 24(4), Chen, Wen-hua, (2000). Key success in customer relationship management-high quality customer data. CPC Magazine, Foong, S.Y. (1999). Effect of End-User Personal and Systems Attributes on Computer-Based Information System Success in Malaysian SMEs. J. Small Buss. Mgmt., 37(93), Hu, Hsing-min (2001). CRM Strategies for Financial Industry, Financial Information, Kandell, J. (2000). CRM, ERM, one-to-one Decoding Relationship Management Theory and technology. Trusts & Estates, 139(4), Karimi, J., Somers, T.M. and Gupta, Y.P. (2001). Impact of Information Technology Management Practices on Customer Service. J. Mgmt. Infor. Sys., 17(4), Kirby, H. (2000). Consistency Key to CRM Success. Works Management, 53(6), Kuo, Yu-chang, (2001). A Study of CRM adoption in Taiwan banking industry, Department of Information Management, Tamkang University. 10. Newell, F. (2000). Loyalty.com: Customer Relationship Management in the New Era of Internet Marketing (1st ed.), McGraw-Hill, Pedraza, M. (2000). 12 principles of CRM Success. B to B, 85(2), Ratcliff, P. (2000). Managing deeper relationship. Mortgage Banking, 60(6), Saaty, T.L. (1996). Decision making with dependence and feedback: The analytic network process. RWS Publication. 14. Saaty, T.L. (2005). Theory and Applications of the Analytic Network Process: Decision Making with Benefits, Opportunities, Costs and Risks. RWS, PA. 15. Somers, R. (1999). Project milestones: Measuring success, managing expectations. Geo Info Sys., (9:10), Su, Shou-chien (2001). CRM Remarks and Customer Management. GSS Information Management Decision-Making Forum, (26),

10 794 The key success factors on the customer relationship management system 17. Thompson, B. (2001). Five insights for CRM Success. Target Mktg., 24(7), Trepper, C. (2000). Customer care goes end-to-end. Information Week, May 15, Tung, Chi-sheng (2000). How big is the global CRM market? Intelligent Times, Wixom, B.H. and Watson, H.J. (2001). An Empirical Investigation of the Factors Affecting Data Warehousing Success. MIS Quar., 25(1),