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

Running head: RESEARCH PROPOSAL
Research Proposal on ‘Impact of innovative technology on the Effectiveness of CRM’
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1RESEARCH PROPOSAL
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

3RESEARCH PROPOSAL
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