Customer Relationship Marketing Essay

To understand CRM (Customer Relationship Marketing) in hotel industry (Millennium Seoul Hilton), and focus on the importance of loyalty guests who bring on most of organization profit by developing of guest recognition and rewards program. Introduction Background The growing realization that keeping the customers you have is as important as customer acquisition, has come about because of the cost involved in attracting new customers. This realization has evolved into understanding a customers lifetime values (F Buttle, 1996).   By doing this, you can be selective about who you try to keep as well as who you want to attract. Some scholars maintain that customer retention affects the bottom line. They further suggest that a 5% increase in customer retention would create a 125% increase in profit (F Buttle, 1996). Customer relationship management can be regarded as the art of employing rhetorical, experimental and personal information in order to personalize customers’ stay while creating incremental revenue opportunities (F Buttle, 1996). So for example, knowing that a customer had a less than memorable experience in the hotel provides the hotel manager with a chance to win them back the next time they are in town. Objectives By use of customer relationship management, the hotel can develop a comprehensive guest profiles for reservation information. This demonstrates to guests that the hotel is in touch with their needs.   It can also drive customer-centric data down to the transaction level, thereby allowing the workers and the guest-facing technology to deliver greater value to the customers (F Buttle, 1996).   Further, customer relationship management can create a realistic profile on the spending and stay patterns of the guests, thereby allowing the hotel to formulate guest-centric marketing for increased loyalty and spending (F Buttle, 1996). The idea of ‘cherry picking’ valuable clients and directing more resources to these clients has gained tremendous significance in the hotel industry.   Clients communication are such that account managers regularly network on the clients to ensure that they are happy in the way contracts are proceeding, and close relationship are build up. Therefore, my research objective is â€Å"to understand the significance of customer relationship marketing† in hotel industry, with criteria as follows: †¢ To examine customer relationship marketing. †¢ To evaluate the importance of loyalty guests who brings on most of organization profits. †¢ To illustrate the importance of developing of a guest recognition and reward programs in hotel industry. Aims This research paper will aim to identify and critically review the theories of customer relationship marketing in a hotel industry.   It will also aim to critically evaluate procedures of customer communication instruments used in the Millennium Seoul Hilton.   The paper will further examine the limitation of communication of customers’ relation tools used as well as providing the recommendation and acknowledging the advantages of employing these customer relationship marketing tools. Literature Review The main idea behind relationship marketing is to build a strong relationship with customers in order to retain them instead of concentrating efforts on recruiting new one.   There are various factors which influence customer retention.   They include high quality products in order to encourage repeat purchase and valuing customer’s needs with loyalty, which can be generated by excellent customer service (F Buttle, 1996).   Moreover, taking long-term marketing decisions for instance, continuous improvement or innovation to keep ahead of customer’s needs is important in retaining customers.   Further, frequent customers contact to establish their profiles in order to ensure accurate customer targeting of goods, services and information, can be of a great help in creating customer loyalty (F Buttle, 1996). For this dissertation, the main areas which need to be focused on are marketing process, situation analysis, marketing strategy, marketing mix decision, and implementation and control, whereby the works of many authors in these fields will be explored. Studies and researches which has been done by these authors brings great literature resources to the   importance of relationship marketing focus on customer, which constitutes customer relationship marketing, customer trust and commitment, customer loyalty as well as guest loyalty program approaches and general frame work for developing and managing a good customer base.   For example, there are literature studies and/or research made on hotels Intercontinental, Meritus Mandarin, Holiday Inn, and Norfolk hotel among others which allows this dissertation to represent the model group. This dissertation will be explored on the themes of the importance of customer relationship management as it affects customer loyalty by developing of guest recognition and rewards program.   Another important theme which will be investigated in the dissertation is how a hotel can utilize relationship marketing to retain its customers.   These main themes will be explored by use of works written by scholars and all that in the field of customer service and customer care. Methodology My dissertation will apply both qualitative and quantitative research methods.   A comprehensive literature review and depth interviews will be carried out as part of my quantitative research. For primary research, depth interview is selected for my study, as it focuses on hotel industry where emphasize should be placed on people’s values and attitudes.   Therefore, it is a good way to explore the importance of customer relationship management, and understanding the process of implementing strategies to build a strong customer base in a hotel industry. This would also bring more intensive understanding to my research, and the required respondent(s) should be specialists in customer relationship marketing in hotel industries.     Moreover, surveys/questionnaires will also be carried out to understand the significance of customer relationship marketing in creating a strong customer base, according to different people from different background in today’s world. A case study of Millennium Seoul Hilton will be researched. This is because it is a well known hotel by many travelers, and therefore will provide travelers and business customers for me to obtain different perception according to different backgrounds, age and gender. Moreover, the staff of the Millennium Seoul Hilton will also be part of sample population   There will be four age groups that is 17–26, 27– 6, 39-46, and 47-56 with a total of 200 respondents. Secondary research data will be collected through different established resources, such as textbooks, journals, articles and internet in the way of literature review. This is because secondary research will validate my dissertation and support to justify my reasons and findings. Secondary data will be used first to conduct the research, before conducting primary research. This will be done because secondary data may contain information that is essential for conducting this research. Secondary research can allow collection of general information such as overview of Renaissance Seoul hotel, service to guests, guest room department, GRO for receiving VIPs, Marriot Rewards, Westin Chosun Hotel, and outlook of Intercontinental Hotel among others, which can be difficult and expensive to gather via primary research. Limitations The main practical difficult in this research will be the challenge to find the right person for depth interview.   In order to fulfill research objectives, the responder must be an individual who is a specialist in customer relationship marketing, specifically in the hospitality industry. This is because such individuals are familiar with the strategies, challenges and solutions which can help me go through my dissertation. However, such individuals have a higher reputation and usually have tight schedule and would be also be hard to each. Further, I am not familiar with specialists who are in the field of customer relationship management.   Another challenge is choosing Millennium Seoul Hilton as a place to conduct surveying and questionnaires.   This is because 200 sample is required to validate my research, and would be a great challenge to accomplish this myself due to concern of time, organizing and conducting this survey.   Moreover, it is also difficult to ask for help in conducting this research because the possibility in which I am able to hire few people to assist me will be costly. Additionally, individual who are asked may not be willing to respond according to the question asked, cooperates and/or even participate in this study.   Confidentiality issues for the respondents participating in the survey/questionnaire would be kept as anonymous due to Data Protection Act.   This is not required in this study. There are no specific ethical issues which need to be considered.   This is due to the fact that the survey/questionnaire is not targeting any groups and/or specific persons. Finding and Analysis The data which should be collected through survey/questionnaire for this research will be analysed and coded in SPSS system.   This is comprehensive statistical software that includes capabilities for data analysis, data management and programming (Malhotra N & Birks D, 2005).   Additionally, it enables analysists and researchers to uncover key facts, patterns and trends.   The interview would be assessed using analysis of verbal data, dividing the whole interview into section of main focused area along the answer from the respondents. The information collected through surveys/questionnaire will be used for descriptive purposes of identifying the relationship between customer relationship marketing and retention of customers according to age, gender and occupation, whereby correlation analysis and descriptive statistics would be utilized (Malhotra N & Birks D, 2005). Descriptive statistics is used to describe and summarize the basic features of data collection using a combination of techniques, such as graphical, tabular and summary (Malhotra N & Birks D, 2005).   In the findings of analyzed data through different analysis techniques, I would support my development of the dissertation.