The Benefits of Using CRM in the Tourism Industry

Transcription

1 Abstract The Benefits of Using CRM in the Tourism Industry Jana Kubikova 1 The article deals with customer relationship management (CRM) in tourism industry. The first part is a theoretical explanation of the basic issues related to CRM and its importance in two basic levels, CRM as a strategic marketing concept and CRM technology as a software application. The second part deals with the benefits of using CRM in tourism industry. At work were used methods of analysis and synthesis of theoretical knowledge of literature, articles and other publications about relationship marketing and CRM. Key words CRM, customer value management, communication technology, customer, tourism industry JEL Classification: M15, M31 Introduction Intensifying competition and increasing customer demands force the companies to make their business processes more efficient. To be effective means being fast, reliable, efficient and especially flexible. Flexibility in the communication with customers is a very important parameter for success. The current customer is very unstable, as well as his varying requirements especially in tourism industry. Therefore it is important so that every company is prepared for daily changes in its activities. Relationship marketing is marketing approach based on relevant information focusing attention on long-term keeping contacts with customers. The tourism world is focusing more and more attention on using information and communication technologies (ITC). Travel and tourism companies have been the first to make a sophisticated use of the possibilities and the capabilities of the applications of the electronic technology to the processing and the management of the data and information. For tourism, as service industry, information is one of the most significant factors to support the operations. The conception based on actual information and relationship principles and customer value is Customer Relationship Management (CRM). 1 Jana Kubikova, Silesian university in Opava, School of Business Administration in Karvina, Department of Management and Business, Univerzitni namesti 1934/3, Karvina, Czech Republic, kubikova@opf.slu.cz 213

2 1 CRM Term CRM has a lot of definitions. Customer Relationship Management (Payne, 2006) is a strategic approach concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments. In his opinion CRM unites the potential of information technologies and relationship marketing strategies to deliver profitable, long-term relationships. CRM provides enhanced opportunities to use data and information both to understand customers and implement relationship strategies better. This requires a crossfunctional integration of people, operations, processes and marketing capabilities that is enabled through information technology and applications. Dohnal (2002) understands customer relationship management as business strategy combined with technology to effectively manage the complete customer life-cycle. Another view of CRM is that it is technologically orientated. In the aspect of information technologies, Kubina and Lendel (2008), Sodomka (2006) understand CRM as the complex of software and technologies automating and performing business processes in the following areas: sales, marketing, service and customer support. Wide explanation variability of the term CRM is documented by theses from several authors. For the purpose of this paper I agree with definition from Buttle (2009) that CRM is core business strategy that integrates internal processes and functions and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer-related data and enabled by information technology. 2 Types of CRM Operational CRM this is area that is concerned (Payne, 2006) with the automation of business processes involving front-office customer contact points. These areas include sales automation, marketing automation and customer service automation. Operational CRM facilitates the customer contacts with organization and subsequent processing and fulfilment of their requirements. Analytical CRM this involves the capture, storage, organization, analysis, interpretation and use of data created from the operational side of the business. Integration of analytical CRM solutions with operational CRM is an important consideration. Analytical CRM enables the right customers to be targeted with appropriate offers and permits personalization and one-to-one marketing (Kotler, Keller, 2002) to be undertaken through superior customer knowledge. Collaborative CRM this involves the use of collaborative services and infrastructure to make interaction between a company and its multiple channels possible. This enables interaction between customers, the enterprise and its employees. Collaborative CRM enables customers to contact the enterprise through a range of different channels and underground a common experience across these channels. Strategic CRM - Buttle (2009) recognize this fourth type of CRM. This is a core customer business strategy that aims at winning and keeping profitable customers by 214

3 creating and delivering value better than competitors. A customer-oriented company shares a set of beliefs about putting the customer first. It collects, disseminates and uses customer and competitive information to develop better value propositions for customers. A customer-centric firm is a learning firm that constantly adapts to customer requirements and competitive conditions. 3 Pillars of CRM The concept of CRM is built on four pillars (Payne, 2006) namely information technologies; people themselves, employees, customers and others who come into contact with the organization. Furthermore is important to understand the organization's activities as a sequence of processes and process thinking and no less important is the actual transferred information. Successful CRM (Wessling, 2002) requires integration of all three of these component parts. Technology without people and people without technology are not effective. Employees have to be understanding with culture in firm. Very important is the view on communications process with customers as a process with many parts. This own part are integrated in one system and misunderstanding are eliminated. 4 The value chain CRM is based on creating and developing and enhancing relationships with customers. The main role of CRM (Storbacka, Lehtinen, 2002) is deliver profitable, strategic and long-term relationship on base of added value for customer. 4.1 The CRM value chain The CRM value chain model (Buttle, 2009) shown in Figure 1 consist of five primary stages and four supporting conditions leading towards the end goal of enhanced customer profitability. The primary stages of customer portfolio analysis, customer intimacy, network development, value proposition development and managing the customer lifecycle are sequenced to ensure that a company creates and delivers value propositions that acquire and retain profitable customers. This process support network of suppliers, partners and employees. CRM is not just about relationship between company and its customers. Participating of all partners is very important and this network creates a substitution effect and added value. 215

4 Fig. 1 The CRM Value Chain Source: Buttle, The service-profit chain The service-profit chain model (Heskett et al., 1997) shown in Figure 2 establishes the relationships between profitability, customer loyalty and employee satisfaction, loyalty and productivity. The model shows how the linkages between metrics are related and how individually indicators can be leveraged to secure enable results. Fig. 2 The Links in the Service-Profit Chain Source: Payne (2006) Employee value needs to be considering from two perspectives the value employees deliver to the organization and the value the organization delivers to employees. Further, a motivated employee can add value to the customers. 216

5 Customer value is concerned with both the value the organization receives from the customer and the value the customer receives from the organization. (Payne, 2002) Customer perceived value (CPV) (Kotler, Keller, 2009) is the difference between the prospective customer s evaluation of all the benefits and all the costs of an offering and the perceived alternatives. Total customer value is the perceived monetary value of the bundle or economic, functional, and psychological benefits customers expect from a given market offering. Total customer cost is the bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given marketing offering. 5 The benefits of CRM The advantages (Burnett, 2002) that a Customer Relationship Management system can bring to communications processes are: A. Shared or distributed data - Companies realize that customer relationships are realising on many levels. Employees start to understand the need for sharing all available data throughout the organization. B. Cost reduction - The customer is a partner in your business, not just a subject. As customers are doing their own order entry, and are empowered to find the info they need to come to a buy decision, less order entry and customer support staff is needed. C. Better Customer Service - All data concerning interactions with customers is centralized. The customer service department have benefit from this, because they have all the information they need. And through the use of push-technology, customer service reps can lead the customer towards the information they need. And, most of the time, the customer can do this on their own, as the CRM system is more and more able to anticipate the need of the customer. The customer experience is greatly enhanced. D. Increased Customer Satisfaction - The customer feels that he is more "part of the team" instead of just a subject for sales and marketing. Customer service is better, his needs are anticipated. If customers are satisfied that is a good predictor for repeat business. Satisfied customers have a great level of loyalty. E. Better Customer Retention - The CRM system can help to capture customers, this will increase customer loyalty, and they will keep coming back to buy again and again, hence customer retention. F. More repeat business and loyal customers - The repeat business is coming from the delighted customers, who are turned from doubting clients into loyal clients. G. More new business - The ultimate customer experience will make the word-ofmouth advertising, which will start more new business. 217

6 Conclusion Companies large and small across a variety of sectors are embracing CRM as a major element of corporate strategy for two important reasons (Payne, 2006). New technologies now enable companies to target chosen market segments, micro segments or individual customers more precisely and new marketing thinking has recognized the limitations of traditional marketing and the potential of more customer focused, process based strategies. Division of labour (Sales, Marketing, Customer Service and Analytics) is necessary for specialization, for each department develops their own role within the company's workflow. However, a company must have a reliable method for sharing and managing business information across these distinct areas. CRM applications provide a detailed view of the entire business, allowing management to streamline complex processes, automate workflow, and increase productivity. They can be customized to suit the individual needs of any company or industry by creating custom objects and applications. Travel and tourism companies have been from the first to make a sophisticated use of the possibilities and the capabilities of the applications of the electronic technology to the processing and the management of the data and information. For tourism industry is CRM based on ITC, motivated employees and actual information one of the most significant factors to success. References 1. BURNETT, K Klíčoví zákazníci a péče o ně. 1. vyd. Praha: Computer Press, 2002, s ISBN BUTTLE, F Customer Relationship Management. Concepts and technologies. 2. vyd. Oxford: Elsevier Ltd. 2009, s ISBN DOHNAL, J Řízení vztahů se zákazníky. Procesy, pracovníci, technologie. 1. vyd. Praha: Grada Publishing, 2002, s ISBN HESKETT, J. L., SASSER, W. E., SHLESINGER, L. A The Service Profit Chain. New York: The Free Press, 1997, s ISBN KOTLER, P., KELLER, K. L Marketing Management. 12. vyd. Praha: Grada Publishing, 2007, s ISBN KUBINA, M. LENDEL, V Využitie projektového manažmentu v CRM. Žilina, [on-line]. [cit ]. Url: 7. KUBINA, M. LENDEL, V Identifikácia hlavných problémov implementácie CRM do podniku. Žilina, 2008, [on-line]. [cit ]. Url: 8. PAYNE, A Handbook of CRM. 1. vyd. Oxford: Elsevier Ltd. 2006, s ISBN PAYNE, A, BALLANTYNE, D, CHRISTOPHER, M Relationship marketing. 1. vyd. Oxford: Elsevier Ltd. 2002, s ISBN SODOMKA, P Informační systémy v podnikové praxi. 1. vyd. Brno: Computer Press, a.s., 2006, s ISBN

7 11. STORBACKA, K., LEHTINEN, J., Řízení vztahů se zákazníky. 1. vyd. Praha: Grada Publishing, 2002, s ISBN X. 12. WESSLING, H Aktivní vztah k zákazníkům pomocí CRM. Strategie, praktické příklady a scénáře. 1. vyd. Praha: Grada Publishing, 2002, s ISBN