Impact of Innovative Technology on the Effectiveness of CRM in the Hotel and Hospitality Industry

This research proposal focuses on the impact of innovative technology on the effectiveness of CRM in the hotel and hospitality industry. It explores the components of CRM, assesses the measurement techniques of CRM effectiveness, evaluates the impact of innovative technologies on the effectiveness of CRM, and suggests ways to implement the technologies in a fruitful manner to increase the efficiency of CRM in the hotel industry.

Running head: RESEARCH PROPOSAL
Research Proposal on ‘Impact of innovative technology on the Effectiveness of CRM’
Name of the Student:
Name of the University:
Author note:

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Section 1: Research topic, the problem and its setting
1. Introduction (The problem and its setting)
Customer relationship management (CRM) is a very important concept for the industries.
This term refers to the practices, technologies and strategies that the organizations use for
managing the relationship and interactions with their existing and potential customers (Wang &
Feng, 2012). CRM enables an organization to collect data about the interactions with its
customers throughout the customer lifecycle, manage and analyze the data with an aim to
improve their customer service and deliver greater value to them. This system helps in retaining
the existing customers and driving the sales growth for the organization. As stated by Kumar &
Reinartz (2018), the CRM systems compile the data of the customers and interactions across
various channels, or points of contacts between the organization and the customers and manage
and analyze those. Effectiveness of CRM is heavily dependent on the CRM database and
technologies. With the advancement of technology, the CRM systems or databases are getting
improved and becoming more efficient for capturing and analyzing a large amount of data.
CRM is mostly used by sectors like hospitality, retail, banking, financial services,
insurance, consulting and agriculture. All these sectors provide services to individual customers
as well as to the corporate. However, CRM is highly effective in those industries, in which
customer choice and behavior are extremely important for determining the sales growth (Rai,
2012). Since, the growth of the hotel and hospitality industry is completely based on the
customer satisfaction, hence, it is essential to have an effective CRM system so that immense
volume of customer interaction data can be stored, managed and analyzed efficiently to create
more values for the customers. CRM systems are based on technology and innovative

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technologies are being used by almost all the sectors for increasing the value proposition
(Nguyen & Mutum, 2012). Thus, the innovative technologies that are used by the CRM systems
in various industries have an impact on its effectiveness. This research study will focus on the
CRM in the hotel and hospitality industry and the impact of innovative technology on the
effectiveness of CRM in that industry.
1.1 Background of the study
The growth of the hotel and hospitality industry is heavily influenced by customer
satisfaction. As highlighted by Abdul, Basri & Shaharuddin (2013), the feedback from the
customers helps an organization to assess the success of its products or services in the market
and help them to make strategies and decisions. In the hospitality industry, customer feedback
and satisfaction are extremely important and hence, it is essential to identify, build and maintain
a dedicated customer pool to maintain a position in the market. Customer relationship
management (CRM) plays a significant role in building a comprehensive database with all type
of customer information and facilitating the organization’s long term growth by strengthening
the ties with the customers. CRM is very much essential in the hotel industry. This industry not
only deals with core customer services, such as, price, quality and delivery, but also deals with
the friendly approach, prompt problem solving attitude and capability, and flexibility in services.
These aspects add an extra edge in the business and also increase the customer’s perceived value
(Wu & Lu, 2012). Hence, an effective CRM system helps a hotel business to exceed the
customers’ expectations the aesthetic value to the services and thereby creates opportunities to
build interpersonal relationships.
On the other hand, effectiveness of CRM is influenced by the technology as well as
knowledge of the people using the system. Effectiveness of the CRM improves the accuracy and

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quality of the decisions. To enhance the business performance, the hotels must expand their
customer base and the growth can only happen when the hotels can establish a strong
interpersonal relationship with the customers. This reflects the effectiveness of CRM system.
The effectiveness can be measured by increase in the customer retention, increase in the number
of customers staying overnights, increase in average spending per visit and increase in referrals
of the new visitors by the existing visitors. Technology helps to increase the accuracy and
efficiency of the CRM systems (Rai, 2012). However, the industry has started to use new and
innovative technologies to deliver more value to the customers by managing and assessing the
data to an in-depth level and hence, building a stronger relationship with the customers. Thus, it
can be said that CRM is useful in the hotel industry but the impact of the innovative technologies
must be assesses through this study.
1.2 Research aim and objectives
The aim of the research study is to explore the factors or components of CRM and
examine the impact of the innovative technologies on the effectiveness of the CRM system, with
a focus on the hotel and hospitality industry.
The objectives of the study are:
 To explore the components of the CRM system and their relevance in the hotel industry
 To assess the measurement techniques of CRM effectiveness
 To evaluate the impact of innovative technologies on the effectiveness of CRM with a
focus on the hotel industry
 To suggest ways to implement the technologies in a fruitful manner to increase the
efficiency of CRM in the hotel industry

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1.3 Research hypothesis and research questions
Research hypothesis
H0 (null hypothesis): Innovative technologies do not have significant impact on the effectiveness
of CRM in the hospitality industry
H1 (alternative hypothesis): Innovative technologies have significant impact on the effectiveness
of CRM in the hospitality industry
Research questions
1) What are the components of CRM, used in the hospitality industry?
2) How is the CRM effectiveness measured?
3) How the innovative technologies are influencing the effectiveness of CRM in the hotel
industry?
4) How the effectiveness of CRM can be improved by using innovative technologies?
1.4 Delimitations of the research
The research study has some delimitation. The study will not address the effectiveness of
CRM for multiple industries or sectors. That would make the study huge and robust. It is also not
possible to study multiple sectors at a time within a limited time and budget. Thus, it has focused
only on the hospitality sector to evaluate the effectiveness of CRM due to implementation of the
innovative technology. Moreover, there are any components of CRM and technology is one of
them. Since, it is not possible to study all the factors and their impact on the efficiency of the
CRM, hence, only the factor of innovative technology has been picked out for the study. Thirdly,
the study will be based on only secondary research, as collecting primary data is time consuming
and there could be authenticity issue. Lastly, only qualitative method will be applied for analysis

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of the secondary data. The secondary data will be interpreted using qualitative methods, such as,
thematic analysis, to get the findings.
1.5 Definition of terms
CRM: Customer relationship management refers to the system of gathering the customer data
points through various points of contact with the business, managing those and analyzing those
using appropriate methods to improve the values delivered to the customers (Mohammed &
Rashid, 2012).
Innovative technology: This refers to new, advanced and creative technology that increases the
efficiency of the existing technology and generates more value to the customers and for the
business (Schiederig, Tietze & Herstatt, 2012).
Primary data: The data, which is collected directly from the field of study, is known as primary
data. This data is collected using methods like survey, interviews, focus groups, observations etc.
in which people are involved (McDaniel & Gates, 2013).
Secondary data: The data that is gathered from already published and authentic, academic and
non-academic sources is known as secondary data. Literatures, datasets, facts and figures fall
under the category of secondary data. The sources of data collection consist of books, journals,
news paper articles, company websites, annual reports, government websites, government
publications and magazines etc. (McDaniel & Gates, 2013).
Qualitative analysis: This type of analysis puts more focus on the words than on the numbers
and interpretation skills and judgment of the researcher play a significant role in the explanation
of the findings (Ezzy, 2013).

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Thematic analysis: It is a type of qualitative analysis. Various themes are chosen based on the
research topic and objectives and the interpretations are done and presented based on the chosen
themes. It is a process for identifying, analyzing and interpreting the patterned meanings or
themes in the qualitative data (Braun, Clarke & Terry, 2014).
1.6 Importance of the study (background and motivation)
The importance of the study lies in the contribution in the world of literature as well as in
the hospitality industry regarding the innovative technology and its impact on the effectiveness
of CRM. As the hotel and hospitality industry is dependent on the CRM, which in turn is based
on technology, thus, it is important to know the technological aspects of the CRM systems, an
how that could be improved by applying new technology. At the same time, technology has been
going through rapid transformation, innovation and enhancement. These new technologies are
often beneficial if applied in the correct manner. Through this study, the innovative technologies
of CRM will be explored and their impact on increasing the efficiency of the CRM systems in
the hotel industry will be assessed. This will not only contribute in the literature regarding the
topic, but will also help the hotel industry to understand the effectiveness of CRM and the related
factors, so that they can plan and implement appropriate measures.
Section 2: Literature review
This section will illustrate the findings from relevant literature articles. The knowledge
gained from the literature review will be used to develop the concept and foundation of the
research study. Literature by various scholars, newspaper articles, reports and online publications
will be explored and presented in this section.

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2.1 Customer relationship management (CRM)
Kumar & Reinartz (2018) write in their book on customer relationship management
(CRM) that, CRM acts both as a technology as well as a strategy. Initially it was a concept and
over time, coupled with integration of technology, it has transformed into an application based
technology and strategy. In the age of digital transformation, CRM has become an indispensible
part of the modern economy and business world. According to the authors, CRM represents the
strategic method of selecting the customers that a company can serve most profitably and
shaping the interactions between the company and its customers. The principal agenda of CRM
systems is to optimize the existing and potential value of the customers for the organization.
Strategic CRM is mostly based on marketing principles, identifying the need for balancing the
interests of the organizations and their customers. Hence, CRM is not only a technological
solution, but also a strategic application. The authors also stated that CRM helps the companies
to build an environment and a flexible support system to deal with issues regarding production,
product innovation, globalization, customer expectations, acquisitions, deregulation, privacy
issues, emergence of new markets, new competitors, and new technologies, convergence of
traditional markets, and new points of contacts with customers. Hence, it can be inferred that
CRM is a customer centric technological and strategic application to deliver greaer value to the
customers by addressing their specific needs.
Heller Baird & Parasnis (2011) wrote about the impact of social media on the social
CRM. In the modern world, social media is not only one of the most important parts of life of the
individuals, but it is also an integral part of the business and marketing strategies of the
organizations. Social media is an important medium to connect with the customers. The
organizations now have a dedicated department for social media marketing, in which the

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executives focus on the data collected from social media and appropriate marketing techniques
and strategies meant for social media only. Thus, it is a crucial point of contact for any type of
industries. CRM also uses social media to gather customer feedback regarding any product,
service or campaigns on marketing or any social issue, which are analyzed prior to any decision
making. Since, social media helps the companies to reduce cost, increase revenue and efficiency
through integration of CRM, it is also known as social CRM. However, through the study, the
authors found that social CRM will be ineffective if the traditional CRM strategies and
techniques are not modified through innovation. Hence, it can be inferred that the modern
approaches of CRM has to integrate the aspect of social media for achieving further efficiency
and accuracy in understanding the demands and expectations of the customers and delivering the
value accordingly (Rodriguez, Peterson & Ajjan, 2015). It has been found that there is a
perception gap between the customers’ expectations expressed via social media and the actual
offerings of the companies. Hence, it can be further said that effectiveness of CRM does not only
depend on the integration of social media in its strategies, but also on the ability of the
organization to think like the customers to understand their expectations.
Another study by Choudhury & Harrigan (2014) showed that there were two perspectives
regarding the social CRM. Theoretically the study enhanced the knowledge about the change in
the communication pattern and quality between the organizations and the customers due to the
usage of social media. The managerial perspective emphasized that the organizations should
utilize the good quality customer information gathered from the social media for the more
effective marketing.

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2.2 Technology in CRM
The main components of a CRM system are salesforce automation, human resource
management, lead management, customer service, marketing, workflow automation, business
reporting and analytics (Taylor, 2014). All these components look after various dimensions of
the CRM system in the organizations. However, technology is the most important factor or the
foundation of all these components of CRM. Every activity is planned and implemented by
applying appropriate technology. Starting from sales forecasting and automation, skill
development of the human resources, monitoring of lead management, efficient customer
service, marketing and PR, to the business reporting, workflow automation and analyzing the
data for decision making, technology is the integral part of the CRM in any organization. Hence,
effectiveness of CRM is highly dependent on the effectiveness of technology.
Regarding the impact of technology, it is said that the CRM system has evolved
drastically over the past century. Due to very rapid technological advancement, the CRM has
now systems for providing sophisticated and more precise analytical solutions by incorporating
customer insights aligning those with the existing resource capabilities. Abdul-Muhmin (2012)
showed in his study that in the emerging markets, like in Saudi Arabia, the organizations that
were adopting the CRM technologies mainly used the analytical scope of the technology to
gather the insights about the customers, value assessment and information tracking. There was
high level of awareness of CRM and high usage of CRM technology among the large
organizations, however, the service providing organizations were not using the CRM much than
the non-service organizations.
On the other hand, Mohammed & Rashid (2012) studied the effectiveness of CRM in the
hotel industry, which is predominantly a service sector. The authors found that there is

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relationship between the dimensions of CRM and the performances of the hotels, and marketing
plays a mediating role in determining the effectiveness of this relationship. However, this study
did not focus on any particular technology or innovative technology that is used by the
hospitality or hotel industry for effective implementation of CRM.
2.3 Innovative practices and technologies in the hotel industry
Vila, Enz & Costa (2012) conducted a study on the Spanish Hotel Industry to illuminate
the innovative practices. It was found that majority of the large Spanish hotel chains wanted to
opt for innovative practices and technologies, mostly for process innovations, product
innovations, management innovations and enhanced knowledge of market. However, the hotels
put more effort on improving the management, although the actions taken mostly served the
purpose of enhancing the knowledge of the market, which included identifying the new channels
of sales and communication and improving those. It was also found that the hotels tend to plan
and implement a new practice, which is innovative as well as exclusive, for delivering greater
value to the customers. However, this study did not mention any particular innovative
technology that the hotels use in their CRM system, except that CRM is used by the hotels to
segment the customers and create different discount packages, offers and other type of targeted
communication.
To improve the products and services of the hotel industry, various innovative
technologies are now being used. Rapid advancement of technology has enhanced the quality of
products and services of this industry, especially the customer support system and customized
products. Some of the innovative technologies that are being used in this industry are the Cloud
or Saas (Software as a Service), smartphone check in, remote control of the amenities in room,
workflow management tools, mobile apps, technologically improved in-room hardware, apps for

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comparing hotel prices, free wifi, sharing economy etc. (Global Hospitality Portal, 2017). All
these functions or activities involve hi-tech services. The Cloud or Saas enables the hotels to
store infinite amount of customer data and manage those without investing in the in-house
technical help. The smartphone apps are not only helping the customers to have easy check-in,
compare hotel prices, but also helping the hotels to collect data and provide support services
faster and efficiently. The sharing economy, that is, growing popularity for Airbnb is
revolutionizing the hotel business, and the hotels are bringing innovations in its services to retain
their market position.
2.4 CRM in hotel industry and its advantages
The hotel industry is highly influenced by customer satisfaction and hence, it must pay
attention to the little details to increase customer satisfaction. In order to do that, the industry
requires customer data collected from various channels and analyze those to find out the exact
requirement. Hence, CRM is used in a more extensive manner in this industry. Maurya (2017)
points out the advantages of CRM in the hotel industry. CRM is the one-stop database, that is, it
contains all types of relevant data pertaining to the customers and those are updated frequently
for accommodating any changes. This makes the problem solving aspect easier.
CRM also helps in enhancing the sales productivity as it automates the process of sending
bulk emails and generating reports. The hotels can analyze the client information easily and can
create lucrative offers for different segments of their customers and notify them in a short span of
time. The hotel industry can also customize the products and services for target customers based
on the CRM data analysis. For example, some customers are price-insensitive and prefer luxury
and experience over money, while the others are price sensitive and they want value for money.
CRM allows the hotels to segment these customers and offer customized products or services to

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deliver value to all the segments. The segmentation also helps the hotels to design their packages
containing extra services, like sightseeing of the local region, or two days all inclusive packages
for the loyal members. CRM is beneficial for customer retention. Customers leave one particular
company primarily due to lack of personal bonds, followed by dissatisfaction from products or
services and market competition (Maurya, 2017). It provides a base for referrals for the satisfied
customers and lastly and most importantly, CRM is beneficial for building an efficient customer
support system, which is used for providing fast and efficient assistance to the customers through
calls, emails, chats and in-person.
2.5 Summary
From the above discussion it can be said that, CRM is an essential component in the
service industries, like in the hotel industry. It helps in gathering the customer data from various
connecting channels and managing them in an efficient manner. This is beneficial for addressing
the customers’ needs and expectations in a shorter time span and in an accurate manner. Various
new technologies are being used in this industry to improve its services. On the other hand, CRM
is also used extensively in this industry for its advantages in improving the sales, market
segmentation, paying attention to the special needs and expectations of the customers and
retaining them.
2.6 Literature gap
Going by the literature review, it was found that various literatures have been written on
CRM and its advantages, technologies in CRM, usage of CRM in the hospitality industry,
innovative technologies and practices in the hotel industry, etc. however, the effect of innovative
technologies used in hospitality industry on the efficiency or effectiveness of CRM was not

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addressed earlier. This research study aims to explore the impact of the new and advanced
technologies on improving the effectiveness of the CRM in the hotel industry.
Section 3: Conclusions/suggestions
3.1 Summary of main points
From the above discussion it can be concluded that effectiveness of CRM depends not
only on the technology but also on the ability of the businesses to understand the needs and
expectations of the clients. By applying the CRM systems, the originations can collect, store and
manage the customer information and analyze those to understand the preferences of the
customers. This is beneficial for reducing the time and effort taken for serving the customers in
an efficient manner and also helps the organizations to improve their products as per the needs of
the customers. Various new and advanced technologies are being used in the hotel industry and
the CRM systems are also being improved to increase the efficiency. Thus, this study aims to
evaluate how the innovative technology can influence the performance of the CRM, with a focus
on the hotel industry.
3.2 Importance of the topic to the organization with examples of strengths and weaknesses
of the topic
The topic is particularly important for the hotel industry as they are continuously
evolving their products and services to stay ahead of the competition. In the modern world,
innovation is the key to success. Thus, not only technological innovation, but also the product
and service innovations are also required. This research study will help the hotel industry to
understand the advantages and disadvantages of the innovative technology used in the industry
and how those new technologies can influence the performance of the CRM systems. Both the

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positive and negative impacts of the innovative technologies and factors of effectiveness of the
CRM will be explored.
The outcome of this study will help the hotels in better decision making. In other words,
based on the knowledge created by this study, the hotels will be able to understand the benefits
as well as loopholes of the CRM systems and how those loopholes can be fixed to generate a
more precise outcome in terms of customer service. For example, the hotels can identify the
specific needs of a particular segment of the customers by applying CRM and it should also be
able to identify which technology must be applied to meet the needs of that segment. If customer
satisfaction is improved, then it can be said that application of innovative technology has
improved the CRM performance or effectiveness. On the other hand, there are other components
of CRM also than only technology, which will not be explored in this study. Hence, the
performance of CRM depends not only on the technology, but also on the performance of the
other components. This aspect will not be addressed in this study, which is a weakness of this
research.
3.3 Future avenues for research
The future researchers can further explore the other components of CRM to evaluate its
performance or effectiveness. Effectiveness of CRM depends on the combined performance of
all the components. Since, this study only focused on the technological aspect of the CRM
system, the other factors shall also be evaluated to measure their impact on the effectiveness of
CRM in the hotel industry. Moreover, the researchers in the future can also find the impact of
innovative technology on CRM in some other industry, such as, retail, banking, insurance,
financial sector, agriculture etc. This will benefit those industries regarding the usage of CRM
and generating more values for the customers by providing better services.

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Section 4: References
Abdul, A. M., Basri, R., & Shaharuddin, T. (2013). Assessing the influence of customer
relationship management (CRM) dimensions on organization performance: An empirical
study in the hotel industry. Journal of Hospitality and Tourism Technology, 4(3), 228-
247. DOI: 10.1108/JHTT-01-2013-0002
Abdul-Muhmin, A. G. (2012). CRM technology use and implementation benefits in an emerging
market. Journal of Database Marketing & Customer Strategy Management, 19(2), 82-97.
DOI: https://doi.org/10.1057/dbm.2012.13
Braun, V., Clarke, V., & Terry, G. (2014). Thematic analysis. Qual Res Clin Health Psychol, 24,
95-114.
Choudhury, M. M., & Harrigan, P. (2014). CRM to social CRM: the integration of new
technologies into customer relationship management. Journal of Strategic
Marketing, 22(2), 149-176. DOI: https://doi.org/10.1080/0965254X.2013.876069
Ezzy, D. (2013). Qualitative analysis. Routledge.
Global Hospitality Portal. (2017). Top 10 Innovation in the Hospitality Industry. Retrieved from
https://www.soegjobs.com/2017/11/13/top-10-innovation-hospitality-industry/
Heller Baird, C., & Parasnis, G. (2011). From social media to social customer relationship
management. Strategy & leadership, 39(5), 30-37. DOI:
https://doi.org/10.1108/10878571111161507

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Kumar, V., & Reinartz, W. (2018). Customer relationship management: Concept, strategy, and
tools. Springer.
Maurya, N. (2017). The Need of CRM in Hotel Industry. Retrieved from
https://cynoteck.com/blog-post/the-need-of-crm-in-hotel-industry/
McDaniel, C., & Gates, R. (2013). Marketing research. Singapore.
Mohammed, A. A., & Rashid, B. (2012). Customer Relationship Management (CRM) in Hotel
Industry: A framework proposal on the relationship among CRM dimensions, Marketing
Capabilities, and Hotel performance. International Review of Management and
Marketing, 2(4), 220-230.
Nguyen, B., & Mutum, D. S. (2012). A review of customer relationship management: successes,
advances, pitfalls and futures. Business Process Management Journal, 18(3), 400-419.
DOI: https://doi.org/10.1108/14637151211232614
Rai, A. K. (2012). Customer relationship management: Concepts and cases. PHI Learning Pvt.
Ltd..
Rodriguez, M., Peterson, R. M., & Ajjan, H. (2015). CRM/social media technology: impact on
customer orientation process and organizational sales performance. In Ideas in
Marketing: Finding the New and Polishing the Old (pp. 636-638). Springer, Cham. DOI:
https://doi.org/10.1007/978-3-319-10951-0_233
Schiederig, T., Tietze, F., & Herstatt, C. (2012). Green innovation in technology and innovation
management–an exploratory literature review. R&d Management, 42(2), 180-192. DOI:
https://doi.org/10.1111/j.1467-9310.2011.00672.x

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Taylor, M. (2014). Components of Customer Relationship Management. Retrieved from
https://crm.walkme.com/components-customer-relationship-management/
Vila, M., Enz, C., & Costa, G. (2012). Innovative practices in the Spanish hotel industry. Cornell
Hospitality Quarterly, 53(1), 75-85. DOI: https://doi.org/10.1177/1938965511426562
Wang, Y., & Feng, H. (2012). Customer relationship management capabilities: Measurement,
antecedents and consequences. Management Decision, 50(1), 115-129. DOI:
https://doi.org/10.1108/00251741211194903
Wu, S. I., & Lu, C. L. (2012). The relationship between CRM, RM, and business performance: A
study of the hotel industry in Taiwan. International Journal of Hospitality
Management, 31(1), 276-285. DOI: https://doi.org/10.1016/j.ijhm.2011.06.012

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Section 5: Appendix
1. Reference of the paper chosen
The research study is an extension of the study by Mohammed & Rashid (2012). The
authors conducted their study on the relationship among CRM dimensions, Marketing
Capabilities, and Hotel performance and found that there is a relationship between CRM and
hotel performance and marketing capabilities play the role of mediator. It was published in the
journal of International Review of Management and Marketing in 2012. In this study, the
performance or effectiveness of CRM in the hotel industry will be evaluated when innovative
technology is implemented.
2. Brief description of search strategies and whether they were successful or not
Keywords
Customer relationship management, components of CRM, innovative technology in hotel
industry, innovative practices in hotel industry, CRM in hotel industry, advantages of CRM in
hotel industry.
These above mentioned keywords were used in Google search and in Google Scholar.
The second source is particularly useful in accessing the scholarly articles published in peer-
reviewed journals, books and various online libraries. Google search results were beneficial to
access various online documents and newspaper articles. Initially Google Scholar presented
many outdated articles, and then the year was set to 2011 to access the updated and most recent
scholarly articles on the relevant research works and journal papers. This strategy was
successful, as numerous relevant papers became available for reviewing.