crm in tourism sector-hari

Theme Paper CRM in Tourism Sector

THEME PAPER

CRM IN TOURISM SECTOR

Presented to Dr. Subhash Sharma

Indian Business Academy

On Feb 28th, 2008

In partial fulfillment of the requirement for the Course in the

Post Graduate Diploma in Business Management

ByHarihara Subramanian K

II YearFPB0608/018

International Business & Marketing

CONTENTS

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Sl No. Topic Page No.

1. CRM Literature 03

2. Customer Relationship Management – Benefits 04

3. CRM Application with the business function 05

4. CRM in Travel and Tourism 06

4.1 CRM in Travel and Tourism 06

4.2 E- CRM in Tourism Sector 08

4.3 Internet in Tourism (E-Tourism) 08

5. E-CRM –a –Break-Through for Indian Tourism 09

5.1 E-CRM Services in Tourism 10

5.2 Major Components of E- CRM 10

6. Further exploration- Qualified Prospects, More Revenue to Indian Tourism 11

7. Conclusion 12

8. Case 13

9. Reference 14

INTRODUCTION

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ustomer Relationship Management is all about calling out information from all the

dealing a company has with the customers in a useful, current from that will help

both company and the customers to do better business. CRM is the establishment,

development, Maintenance & optimization of long term mutually & organizations. Successful

CRM focuses on understanding the needs and desires of the consumer & its achieved by

planning these needs at the heart of the business by integrating them with the organization

Strategy, people, technology & business processes.

CIn this dynamic global market scenario companies need to have interaction with customers is

order to retain them and also to with new customers and keep them. New capabilities are

being introduced to meet customers needs better, access new customer segments and lower

the cost of service. At the same time, expert customers are demanding consistent service the

quality. The new Mantra to achieve this goal is customer Relationship Management.

CRM LITERATURE

A revolutionary new marketing paradigm, Customer Relationship Management

(CRM), is emerging in many large corporations. The CRM model first started before a

decade ago. Bits & pieces of it have been deployed in same organization and considerable

experimentation has occurred, mostly though, with mixed results. CRM is essentially a

customer data intensive effort. Origin at CRM can be traced back to the managements

concept of Relationship Marketing is an integrated effort to identify, build up and maintain a

network with individual customers for mutual benefits of both sides. Berry first coined the

term CRM in 1983. He mentions in this paper on relationship marketing that there is wide

literature available on attracting new customer, but hardly there is any work done on finding

the ways to retain customers. CRM strategies Mentioned by him are

1. Core service strategy

2. Relationship customization

3. Service augmentation

4. Relationship pricing and

5. Internal marketing.

These strategies can be used in combination to develop proper marketing strategy and they

are independent of one other. Customer retention and customer share are also very important

apart from attracting customers. Customer’s stratification is concerned with various factors

like quality of products/ service, price of product/ service, which are the outcome of CRM

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processes. When the entire process of CRM is property carried out, it leads to customer’s

satisfaction, if a customers in more satisfied he gets delighted & thin satisfaction & delight

leads to loyalty.

CRM solutions that enhance customer service, build a single- point interface to customers,

facilitate cross selling and maximize customer retention.

CUSTOMER RELATIONSHIP MANAGEMENT – BENEFITS

To realize the benefits of CRM it is important to have an integrated solution across all

customer information system, typing together the front and back offices for a complete view

of customers in order to service them better.

Here, Philip Kotler’s 4p’s can now be replaced by the A, B, C, D, and Es as follows:

Any place because anytime-Any where shopping replace ‘place’ companies must

design integrate strategies for the market space, the Market place and Market

face. Customers want convenience.

B– Web relation drive revenues. A brand reflects relationship capital. Thick of

customers as a part of your B – web and prospects as candidate for relationships,

not as market for your products. B- Web is synonym for Business web or

ERPWEB or e- business.

Communication works, not ‘promotion’. A man in communication is a Man in

business. One – way media like broadcasting can be part of the marketing mix

but the customer decides whether- and with whom- to engage in a one, two, or

multi- way communications.

Discovery of price replace fixed ‘price’ the days when firms controlled prices are

nearly over. Supply chain management, which manages supplies and make- to-

stock manufacturing. Every make- to –order product will have different price, so

it is discovered.

Experience replaces ‘product’ customers pay for experience, not products.

Products must be bundled with enhanced, customized services. The automobile

experiences replace the product, as the car becomes a platform for transportation,

interactive entertainment, safety, doing business a having fun.

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CRM APPLICATION WITH THE BUSINESS FUNCTION

E- Commerce web storefronts website: Are covering into a customer – centric solution,

which allows organization to interact with, sells to and service customer through all channels.

Customers are major users of thin business function.

Channel management / Partner Relationship Management: Extends a CRM capability to

the needs of extended selling channel such as distribution and value added resellers. Business

partners are major users of this business function.

Sales Automation: Provides sales professionals with access to critical customer information

and tools that enhance their ability to effectively sell as well as manage their time. For

example: contact management calendaring function, forecasting tools, configuration models.

The sales department uses this business function.

Marketing Automation: Provides marketing department with campaign management, lead

generation, data mining tools, closed loop lead management is one of the most important

function of marketing automation and relies on integration with the CRM data repository uses

this function for cross promotion, advertising and direct marketing.

Customer service and support or Internal Helpdesk or web self-service: Enables the

enterprise to effectively and efficiently address customer question, problem or issues. While

customer satisfaction is the primary goal, many organization are seeking to increase revenues

while providing customer service through ‘ cross- selling’ supporting field service person

through application covering network management an d support, call logging and resolution,

and internal customer support. The customer service department uses this business function

to provide quality service to customers.

VALUES OF CRM

A customer Relationship Management strategy designed to increase revenue and business,

increasing customer satisfaction and loyalty, enabling more efficient business processes and

utilizing lower cost technologies. CRM solutions improve sales and marketing efforts and

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enables organizations to provide superior service to customers. New customers are gained,

and existing customers are retained and busy more in grater quantity.

CRM IN TRAVEL AND TOURISM

The world travel and tourism council estimate Rs.46450cr. of business travel from India

by 2013. The estimate tourism business is expected to be worth some Rs.24000- 25000cr.

in 2004 to India. While a lion's share of traffic is drawn by corporate, leisure travel

or holidaymakers are exerting themselves in a big way. The Indian travel scenario is

undergoing a metamorphosis. With more and more youngsters charting out their

careers at an early age and the increasing competition adding to the stress, they are

constantly on the lookout for places where they can either drive down if not fly

down, for a quick break from their daily routine. Again larger disposable income

available, coupled with greater dissemination of knowledge and information

through the electronic media, is translating into increased holiday travel

opportunities.

With almost every tourist spot in India as well as overseas registering a steady

increase in the number of visitors more and more players are sensing a great

business opportunity and are entering this segment. Most state governments in India

have entered the fray, competing among themselves as well as with private agencies,

and are promising the very best in terms of infrastructure as well as services, to woo

the holidays.

With competition hotting up, more and more hotels and travel agencies are

unleashing attention grabbing advertisements with unique packages - all with a

view to enticing the travel minded customer to use their facilities and services.

Today the main focus of organizations is acquiring new customers while retaining

the old ones. Consequently, Customer Relationship Management is emerging as

the core marketing activity for businesses operating in fiercely competitive

environments. Organizations are now paying more attention to their relationships

with existing customers and stepping up efforts to increase their share of

customer's purchases. Modern CRM strategy is all about capturing the customer's

heart share more than his mind share by offering a differentiating value proposition

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through various innovative ideas.

The nature of the travel and tourism industry being service-oriented, it has to

improvise on existing mechanisms and come up with innovative ideas to gain

customer loyalty and attract new clientele. Traditionally, travel and tourism

industry did not lay much emphasis on CRM. Travel was then believed to be a

one-time affair. Tourists were therefore considered to be ‘one-time’ customers and

they were taken to be a floating population. This made the industry treat its

customers in a casual manner, with the players not too keen on maintaining or

building a long lasting relationship with customers. However, with the changing

lifestyles, attitudes and people having access to faster and cheaper communication

mechanisms, information gathering and sharing (through e-mails etc.) have come

to playa key role in the travel and tourism industry. Customer's view has crucial

implications on the industry. The significance of treating even the' one-time

customers' cordially is being well recognized today. A debilitating customer

experience translating into negative publicity regarding a hotel or an agency may

result in the loss of a group or at times a whole generation of customers. To ensure

they do not get into this trap, the travel and tourism industry, be it a small hotel,

agency airline or a large hotel chain, are investing heavily on CRM.

In a competitive environment, the ability to capture, interpret, and leverage

detailed customer information has become mission-critical, especially in the

service industry. Customer relationship management (CRM) applications enable

travel and tourism providers to maintain brand value and perform more

competitively in their dynamic marketplaces. CRM supports the most demanding

sales, marketing, and customer service requirements of this industry. Built on the

market-leading functionality, CRM empowers customer-facing professionals with

unmatched levels of reliability, scalability, and user acceptance. CRM applications

help service organizations manage each interaction - whatever the channel - for

maximum customer satisfaction and revenue potential.

E- CRM in Tourism Sector

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CRM has emerged as a significant strategy for customer retention and for long- term

customer profitability. Faced with an increasing pressure to retain the old customers, the

response of many firms has been to attempt to build up strategies for customers satisfaction

and hence customer retention. Customer is ‘ the king’ in today’s business world old

business practices built around traditional product marketing and sales modified or replaced

by customer- centric marketing. In such a scenario, customer relationship management

CRM/ E-CRM enable to retain a one-one relationship with the customers – a step towards

customer loyalty.

Tourism is a global mega industry. India is one of the oldest civilizations with a

kaleidoscopic variety and beauty. Through, tourism is the third largest foreign exchange

earner of India; it is not given the right kind of importance it deserves. Indian tourism can

gain momentum when translated into a marketable product through well-planned integrated

problems.

“Customers loyalty, has always been valuable

But today it has become vital for success”

- Sumeet Kanpur, CEO, Global Groupware solution.

CRM is a one to one relationship, which rest ion ideas about reducing costs and increasing

long- term profitability.

Internet in Tourism (E-TOURISM)

Internet has become one of the most important information sources for Tourism worldwide.

Global exposure through Internet has triggered off a desire to travel overseas, e Tourism

sector remains the first Internet sector in term of value. There is an increase in the number of

Internet users using services to get driving directions, maps, for place to stay, for things to do,

airline schedules, travel packages, A new type of user slowly but surely is appearing.

According to the survey carried out by the Forrester Research Firm, the Internet has become

one of the most important sources for European travel worldwide. The predominance of the

Internet as a favored information source is such that among European Internet users, it is as

much as 30 to 60% of item who use the Internet to gel travel information. Online Consumer

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Sales at Travel U.S. Sites, indicate the rapid usage of Internet for travel.

INDIAN TOURISM SECTOR

India, a land of variety and beauty, occupies a strategic position in Asia. A beautiful country

side, a land of temples, vast desert land with oasis, golden beaches, lakes and waterfalls,

varied rich wild life, mountain ranges constitute a great potential for tourism.

The need of the hour is a business like approach in promoting tourism. In business terms,

every tourist is a prospective sales agents. He markets tourism more than any brochure,

booklet or advertisement does. Hence, business strategy in tourism should involve attracting

people of all classes, which in turn accelerates the means of bringing all the potential tourists

for a quantum leap in Indian tourism. Not only attracting the tourists is vital, but also

developing goodwill is imperative. It is essential to offer services of money worth to develop

goodwill.

E-CRM –A –BREAK-THROUGH FOR INDIAN TOURISM

In order to reap out the true potential of Indian tourism, it is essential that every participant of

the sector (hotels, restaurants, travel agents, amusement providers, tour operators, etc.,) offer

services money worth. Department of tourism, government of India by implementing E-CRM

can build up a platform that unites these different components giving the tourists the most

requires and valuable information.

In the digital economy and in the era of e-tourism, E-CRM will be a major source to share

data and process transactions in real time. E-CRM in tourism sector helps to strengthen

relationships with tourists and thus goodwill to Indian tourism.

E-CRM SERVICES IN TOURISM

The substantial increases in the volume of tourist information available as a consequence of

rapid technological change, globalization and the blurring boundaries of competition are the

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main reasons that there is a paradigm shift occurring in the tourism industry the world over.

The modern customers are more educated, experienced, independent and demanding.

Information technology is opening up an astonishing array of travel and vacation options for

this new type of tourist. To remain competitive in today’s global economy, tourism

destinations and industry players alike must adapt.

These days, there is an urgent need to strengthen customer relations for ways to extend

market reach, improve quality and customer service so as to increase profitability. In general

the main challenge is to track potential and present travelers, to stimulate them and reward

them for coming again!

Information and knowledge have become the most important strategic factors for success in

tourism. E- CRM services provide tourism destinations with the tools they need to collect,

store, and retrieve all tourism-related data. Using this technology, destinations can improve

analysis of consumer behaviour and preferences, and are in a better position to respond to

informed, more demanding, and less predictable tourists. Destinations hence can convert this

business insight into more targeted marketing and to keep up with fast-changing market

trends and increasing competition.

MAJOR COMPONENTS OF E – CRM

1. CALL CENTER AUTOMATION(e-CALL CENTER)

Motivations of tourists are heterogeneous and composed of diverse elements. The infusion of

Web data gives live call center agents a clear picture of tourists interests based on how they

browsed the site. Screen views show how many different pages a specific visitor may have

viewed, when the customer arrived, on which information he clicked, or what parts of

knowledge database he visited and how many minutes he spent there. Screen views aid in

reaching the tourist effectively by providing him the require information.

The tourist’s data is stored in E-CRM repository. E-Call Centre can provide details

about particular destinations discuss flight and resort availability, etc., assist in planning for

the entire trip.

2. SALES AUTOMATION (E-SALES)

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The multi-media catalogs, a feature of E-Sales provide a clear view of various tourist

attractions, hotels, etc., which aid in attracting the tourist. E-Sales can provide a way to find

tourism products based of customer’s questions. E-Sales help to sell collaboratively across

geographic, time zones, currencies, and scales to meet the needs of even the largest global

deployments. Sharing of information across different units is made easy thus providing

superior service and support.

3. SERVICE AUTOMATION (E-SERVICE)

E-Service enables the tourist to create and track down their own service requests and to

search fro answers for FAQ. User profiles allow to anticipate customer support needs and

prepare answers automatically. Customers do not have to wait to talk to service

representatives. The result is increased the customer satisfaction.

4. MARKETING AUTOMATION (E-Marketing)

E-Marketing is an intuitive and easy-to-use format enabling to quickly view, analyze and

present information vital to tourism business needs. E-Marketing monitors tourists

interactions, improves the service performance, enhances the productivity of tourism

programs. By integrating the customer information from multiple sources, the tourism

department can identify and capitalize in greater revenue.

BETTER-QUALIFIED PROSPECTS, MORE REVENUE TO INDIAN TOURISM:

E-CRM manages the entire lifecycle of tourism opportunity, from the time it first appears as

an inquiry to its conclusion as a tourist to India. It is easy to capture critical prospect,

customer information. E-CRM helps to focus on right opportunities with the most current

information available at fingertips. The Department of Tourism can determine where and

how best to search for more business. E-CRM makes it easy to be responsive and proactive

in communicating with prospects and customers through e-mail, fax messages, literature to

customers directly.

Implementing E-CRM on a national and regional basis is a matter of the economic policy and

will support the local economy regarding employment and national/ local contribution and

monetary impact to the GDP.

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In addition, E-CRM is fundamental in the development of a destination’s image or brand,

which is important for differentiating the destination from others and key to consumer

decisions on choosing their tourist destination. Establishment of E-CRM tool support the

building of a brand for the region and are able to generate additional values for travellers and

the local tourism industry. Last but not least these comprehensive efforts will create synergies

at the operational side.

CONCLUSION

The more educated customer in today's Internet world is bringing about a change within the

industry structure demanding for high service and support; Tourism sector is currently facing

the same challenge. At this juncture, customer relationship management is emerging as a new

area of focus for firms worldwide. Accessibility to proper sources of information is a

valuable asset for any tourist. Among the varied sources of procuring such information,

Internet plays a major role in today's world. Department of Tourism, Government of India,

by implementing E-CRM would accelerate means off mechanism for bringing all the

potential tourists to make a rapid stride in a big way E-CRM would bring in all the benefits

associated to the Indian tourism sector. Implementing E-CRM by the department can have a

additional advantage for a simple reason that the information offered by the Government

Departments of any nation is more authenticated. Also, the department's interest is the benefit

of the tourism of the nation as a whole. Implementation of E-CRM by the Government of

India is a holistic approach. Such, in initiative will bring about goodwill to the nation, turning

the tourist into a prospective sales agent and a quantum leap in tourism sector thus earning a

huge foreign exchange. Further, the call centers, marketing, sales department can provide

gainful employment to many.

CASE

The first case in this section is on the CRM practices adopted by Walt Disney, one

of the largest media and entertainment corporations in the world. The case traces the

evolution and growth of the company from the humble beginnings it made as a

cartoon studio. The success of the company is attributed to its strength in its

resources, experience in the business and its low-cost strategies. However, of late

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the company faced hiccups in terms of falling attendance and sagging profits. With

an objective to overcome such problems, Disney formulated several CRM

strategies. For instance, "Destination Disney" was the new strategy adopted by the

company in an attempt to drive growth at the parks and thrill the customers/visitors

with a unique experience. Disney also created a website, Magical Gatherings to

facilitate group bookings by those who stay far away from each other. The company

ensured that the customers carried their mobile phones so that they can be informed

about the arrival of certain characters, beginning of fireworks etc. The creation of a

Mickey Mouse look-alike, Pal Mickey, which is a 10.5-inch tall stuffed toy,

equipped with a powerful infrared sensor placed in its nose was another innovative

CRM idea. The doll acts as a tour guide and provides information on various events.

The author concludes by saying that Disney has forever altered the concept of

entertainment with a plethora of customer-centric initiatives.

REFERENCE

Books:

The CRM Hand Book – Jill Dyche

Customer Relationship Management – Kristin Anderson & Carol Kert

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CRM – An Indian Perspective – Mukesh Chaturvedi & Abhinav Chaturvedi

CRM – A Step – by – Step Approach – H Peeru Mohamed & A. Sagadevan

Websites:

http://www.wikipedia.com

http://www.crm-application.blogspot.com

http://www.crmcommunity.com

http://www.ecrmguide.com

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