Customer Relationship Management Analysis and Application in Tourism

This report provides a comprehensive analysis of Customer Relationship Management (CRM) within the tourism sector, with a specific focus on the application of CRM models to tourist destinations, particularly Buckingham Palace. The report begins with a definition of CRM, an overview of CRM models (including operational and analytical CRM), and highlights the importance of various CRM components such as marketing and service automation. It also emphasizes the need to move beyond fragmented CRM approaches, advocating for integrated strategies. The report then explores the importance of CRM as a business strategy, examines good practices within the tourism sector, and presents relevant facts and statistics. Furthermore, it evaluates the long-term value of CRM in tourism, discussing its impact on customer retention, profitability, and competitiveness. The report concludes with an application of the CRM model to a tourist destination, highlighting the value chain model's components. The report emphasizes the significance of CRM in enhancing customer experiences and driving business success in the tourism industry.

Customer relationship
management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Definition of CRM.......................................................................................................................4
Overview of CRM model.............................................................................................................4
Importance of various components of model for successful CRM..............................................4
Need to look beyond the approach of fragmented CRM.............................................................5
Importance of CRM as a business strategy..................................................................................6
Good Practices within Tourism sector.........................................................................................6
Facts and Statistics related to the analysis...................................................................................7
Evaluation of CRM and its long term value in Tourism sector...................................................7
TASK 2 ...........................................................................................................................................8
Application of CRM model to tourist destination........................................................................8
How unspecified new services and products.............................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Customer relationship management can be defined as an approach which is utilized by
organization for managing communication with their potential clients. Customer history and
other important information about the clients are used by enterprises for bringing improvement
in their business relationship with customers. Customer relationship management can also be
referred to as combination of strategies or activities which are performed by companies for
managing as well as analysing the customer interaction throughout the life cycle. An effective
customer relationship management is very much crucial for retaining the profitable clients for
long time. It is also very much crucial for increasing sales as well as profitability.
The study emphasizes on identification of various components of CRM models which
tourism destination that is Buckingham palace could comply for acquiring, nurturing and
developing relationship with travellers. Report will also demonstrate the application of CRM
model to tourist destination.
TASK 1
Definition of CRM
Customer relationship management can be defined as a approach which is required in
order to manage the interaction of customer with current as well as with potential customers. The
main function of CRM is to analyse data of customers history with company and to improve
relationship of company with the customers. The main purpose of customer relationship
management is to focus on customer retention and sales growth(Peterson and et.al., 2018).
Overview of CRM model
Buckingham Palace can use operational model for the customer relationship management.
Operational CRM model this model focuses on direct interaction of company with the customers.
The model aims at automation and improvement in the business process which is based of
customer supporting as well as customer facing. The CRM model was originated in the year
1970. If we consider the overall business sectors the CRM model was developed when there is a
buzz in the business units that business process should be on customer centric rather than
product centric(Nyadzay and Khajehzadeh, 2016).
When we consider travel and tourism industry the CRM model was developed due to
impact of globalisation, the companies in this sector is facing a huge competition in industry, the

increase of competition has forced companies to focus on managing better customer relationship
so that revenues of company can be maximised.
Therefore as a impact of this Buckingham Palace has also shifted its focus from product
centric approach to customer centric approach and as a result of which company has used
operational approach to maintain better customer relation.
Importance of various components of model for successful CRM
The various components of customer relationship management are
Marketing automation:
It basically focuses on automating marketing process. In marketing, campaign management of a
company fore their marketers to make use customer specific information in order to determine ,
develop and evaluate communication at different targeted customer level.
Importance:
Marketing information is important for as it helps in automation of the marketing process. It also
helps in identifying the needs of customers requirement.
This process help in identifying the profitable customers by Buckingham Palace(Soltani and
Navimipour, 2016).
Service automation:
It deals with management of organisation service. Data aggregation systems, web sites, blogs are
some of the example of operational CRM.
Importance:
The service automation is important for the CRM model the reason behind this is that any
department within the organisation can access to the information about customers which helps in
better understanding of customer needs. For example marketing department can use this
information for making or conducting the marketing campaigns and activities for the target
customer.
Service automation helps to make the company to increase its productivity as well as to improve
quality of service by better understanding of customers.
The operational CRM models helps in acquiring new customers(Customer relationship
management, 2019). It helps in maintaining and creating an efficient relationship with the
customers. Thus the component of operational model which has been stated above helps in
making the CRM model which is used by Buckingham Palace successful.

Need to look beyond the approach of fragmented CRM.
Under Fragmented approach different functional group in organization focuses on
implementing only a part of Customer Relationship Management. It means that, there is lack of
focus of employees on vision of the company. Tourist destinations such as Buckingham Palace
should look at other approaches of CRM such as analytical CRM that helps tourism companies
to focus on different touch points and helps to gain better insight of the customers. This will
helps to achieve the vision of tourism firm which is not possible in case of fragmented approach
of CRM. Therefore, tourist destinations must have broad vision in respect of CRM and
leadership so that, it can focus on needs and demands of visitors (Alawiyah and Humairoh,
2017).
Companies that are operating in Tourism industry should develop a framework to ensure
that the approach of Customer Relationship Management will be balanced and integrated.
otherwise it will remain fragmented. Tourist destination should look beyond Fragmented
approach so that, it will help to achieve the vision of the firm. Moreover, other approaches of
CRM like operational, analytical etc. should be followed by tourism will support in creating
valuable experience for visitors. Therefore, analytical process will help to develop knowledge of
the needs of tourists in respect of destination. Further, companies should adopt integrated
approach of CRM in which all the people will work in collaboration with each other rather than
focussing on particular function (Brockman, Park and Morgan, 2017).
Importance of CRM as a business strategy.
Customer relationship management is a strategy that involves set of procedure and
policies that helps tourism destinations to attract and retain large number of tourists. CRM can be
considered as a customer focused strategy of Tourism companies that aims to improve the level
of customer satisfaction and also helps to retain loyal customers (McMullan and Collins, 2019).
Customer relationship management is also described as an important competitive strategy
that helps firms that are operating in tourism sector to focus on the need of the tourists.
Therefore, it will help tourist destinations such as Buckingham Palace in London to create long
term relationship with visitors. Moreover, CRM can also be described as a comprehensive
strategy that helps the tourist destination to influence, attract, and retain visitors that come from
different countries to visit the destination. This will help to create value for the tourists as well as
for tourism firms.

Good Practices within Tourism sector.
While formulating strategies to develop and encourage tourism, there are many factors
which need to be kept in mind for sustainable growth like Sustainable economic development,
Cultural diversity, enhancement in peace etc (Aliperti, Rizzi,and Frey, 2018). there are many
examples in tourism sector which can be used as reference for developing sustainable tourism :-
ILUNION Hotels which are based in Spain has developed a policy where they only
appoint differently abled professionals giving them opportunity to work in tourism sector. This
has helped in giving employment to these people and integrating them with other professional
people.
Another example is of Mexico which is highly vulnerable to climate change and natural
hazards like droughts as well as hurricanes. In order to encourage and develop tourism industry,
an adaption program has been devised which involves risk maps, geographic information etc. so
that an early warning system can be developed (Rahimi, Nadda and Wang, 2018).
One such innovative technique has been used by Hostelling International located in
New York, USA where they have developed those methods which will help in integration of
tourists and travellers from different cultural backgrounds strengthening intercultural bonds and
it is a NPO (Ngo, Pavelková and Do, 2018).
Facts and Statistics related to the analysis.
Customer relationship management has impacted the UK's Industry in a positive manner
as there is an increased number of inbound customers in UK where 37.9 million visitors came to
UK in 2018 and generated an overall revenue of £22.9 billion. London alone garnered 54% of
the total visitors who visited UK in 2018. By the year 2025, it is predicted that the tourism
industry of Britain will grow with an annual rate of 3.8% which is the fastest rate when
compared with other sectors like retail, manufacturing etc. and is expected to generate 3.8
million jobs (Britain's visitor economy facts, 2019). By application of CRM model, the tourist
companies have been able to target more visitors by implementing targeted marketing
techniques.

Thus it is expected that the tourism industry of UK will become a £257 billion till the year 2025.
Evaluation of CRM and its long term value in Tourism sector.
Application of CRM model in Tourism sector has helped in creating a long term value for
the industry as well as customer. CRM helps the company in creating competitive strategy by
generating data related to all the customers and the more personalised experience a visitor gets,
more will be his satisfaction level and for this the companies have been creating a separate
budget. CRM helps in retaining the customers which creates a comprehensive customer base and
hence helps in developing those strategies which creates a loyal and satisfied customer base.
These help in increasing profitability, improving global representation of economy, increase in
revenue and in retaining the existing customers (Sigala, 2016). Thus by implementing CRM in
tourism industry, it increases the competitiveness of the industry as well as profitability and
helps in creating a satisfied customer base.
TASK 2
Application of CRM model to tourist destination
CRM Model (Value Chain Model)
In order to attract visitors at the destination Tourism company should required to imply
the Value Chain Model which is high level model developed by Michael Porter that indicates the
processes a business uses to develop an end product or service for their potential clients
(Ghawana and et.al., 2016). The main purpose of this model is to set the priority activities
Illustration 1: Tourism Industry of UK
Source :- Britain's visitor economy facts, 2019

towards accomplishing the aim and objectives which is highly effective to gain the competitive
advantage. Value chain model is one of the best model of customer relationship management that
overlook on the part of activities which is required most to create a valuable services for tourists.
It includes some components which helps to identify the essential activities such as given below:
Primary Activities:
Inbound Logistics : Inbound logistics defines the relationship between suppliers and
incliudes all the activities required to receive to receive, store and disseminate inputs. In order to
imply such activities and goals.
Operations : Are all the activities required to transform inputs into outputs. In such
activities or process required to make the system properly into order to give the best quality
services to their tourists. In order to that, tourism company can also provides some extra services
to their tourism business in order to explore the services for the clients.
Outbound Logistics : Outbound activities are next process to deliver the final product or
services which is prepared for the clients (Chahal and et.al., 2016). However, in tourism
destination is the final destination or a service which country avail to tourism business.
Marketing & Sales : This is the another activity which helps to promote the awareness
of tourist destination across the world in order to attract the tourism. However, this process can
be done by social marketing, Advertisement etc. through highest number of visitors get to know
about the Buckingham palace which is situated in UK.
Service : All activities that has been occurred after the process of sell next process is to
provides other some services to ensure the customer satisfaction.
Secondary Activities:
Infrastructure : Infrastructure defines the location from service or product is generated
is also very much necessary. However, this is the most important concern for all of the activities.
Technology Department : UK tourism also make sure that the country well used
effective technologies and proper system which gives the good impact on the overall tourism
process.
Human Resource Development : Tourism companies also make sure about the tourist
guide and the employees who helps travellers to visits the Buckingham (Troncoso and et.al.,
2015).

Benefit of Collaborative CRM to the Destination marketing organisation and other local
enterprises
Collaborative CRM can be defined as an approach to customer relationship management
in which employees working in different functional division in an organisation share information
they gather by facilitating the interaction with the customers in the market. It is the
collaborative customer relationship management which promotes team work as well as fosters
customer knowledge. The collaborative customer relationship management also helps in
improving overall business performance of an enterprise. It is an effective customer strategies as
well as policies which assist an organization in engaging the clients in business. In other words,
by using the collaborative customer relationship management system, local enterprise can
involves customers in business rhat is very much essential for fostering business growth.
Main objective of implementation of the customer relationship management is to assist
enterprises in bringing improvement of companies business relationship with its customers. It is
the system which assist destination marketing organization and other local enterprises in
attraction more number of tourists (Prebensen, Chen and Uysal, 2018.). The customer
relationship management is a software which is used for collection, organization and
administration of essential information provided by customers. It is the type of software which
provide number of immediate as well as latent benefit to both destination marketing
organization and other domestic travel companies (Buhalis and Sinarta, 2019.). One of the
important benefit which domestic travel and tourism companies can get by implementation of the
Customers relationship management is that they can provide the high level of satisfaction to their
clients (Talón-Ballestero, Muñoz-Romero and Rojo-Álvarez, 2018). As with the support of
Customer relationship management system the travel and tourism company in Buckingham
palace, UK can their goods as well as services in systematic manner. In addition to this, both
destination marketing organisation as well as
In addition to this, increase in revenue is the opportunity which can be considered to be
as immediate benefit which Destinations marketing organization and other local enterprises in
Buckingham palace, UK can get by employing the Customer relationship management software.
In context of Destination marketing organization in Buckingham palace, they can get a chance to
enhance their marketing efforts by installing the CRM software.

The other benefit which Destination marketing organisation and other local companies in
Buckingham palace can get by implementation of the Customer relationship management is that
by implementing the specific software they can increase their Up as well as cross selling. In
addition to this, the local enterprise can maintain their customer loyalty by up selling as well as
cross selling. Many of the travel and tourism companies need the support of their employees for
selling their goods or services to customers (Rather, Hollebeek and Islam, 2019). Up selling can
be defined as sales technique where additional goods or services that are added to the original
purchase (Cheng, Imrie and Mansori, 2019.). Whereas, cross culture selling is the sales technique
where sales person in travel and tourism firm suggest different goods or services on the basis of
history of customers or their preferences. Both destination marketing organisation and other local
enterprise in Buckingham palace, UK can get an opportunity to provide the valuable suggestions
to customers by utilizing the information in the customer relationship management software
(Malone, McKechnie and Tynan, 2018). So it can be said that implementation of the customer
relationship management system can be valuable as it will help an organisation in developing the
strong relationship with customers. As per the Harvard business review, the implementation of
the customer relation ship management by some travel and tourism companies has helped them
in reducing of the approx. five percent of defection rate and assisted those firms in increasing the
profitability by approx. twenty-five percent (Sigala, 2018). In context of both destination
marketing organization and other local enterprises in Buckingham palace, UK by utilize the
customer relationship management system can easily identify the risk which an individual
customer might face at specific destination such as Buckingham palace, UK and reach out to
customers for supporting them. As it is the tactics which will assist an enterprise in providing the
high level of satisfaction to customers and can easily influence them to make repeat purchase of
goods or services from organization (Albayrak, 2018). In context of destination marketing
organisation, implementation of the customer relationship management will help firm in
identification of target customers group and would provide an ease in segmenting the wide
market into small segments.
How unspecified new services and products
Creativity is the new and effective process to make the things understandable to organise
the best opportunity work. It makes and creates the better chances to get the good response from
the travellers. However, insight is something that resides deep inside the facts to better determine

s the objectives to promote the destination level or performance. However, the new goals and
process can better develops the ways to create a competitive edge of the product or services and
make the system more effective and creating. Searching for the product or services can better
develop the opportunities to get the visitor attraction and organise the insight gain of the services.
Unspecified product or services sometimes also creates the effective knowledge of development
and organise the best goals and opportunity. Insight is a consequences of a problem. So it you are
dealing with a problem insight knowledge is very required and also bring the leading business
change and new opportunity and task to be more effective and authenticated. Differentiated
launch strategy for tourism travellers relies on a solid understanding of the market which also
relies on the high performing outcomes which might also creating the effective outcomes.
Realignment of assets to meet consumer needs
Realignment of assets is very essential for attracting people towards destination place. as
it help to grab the attention of visitors and provide reason for visiting again and again. For
example, accommodation services is one of the main concern of people which help them to reach
at chosen destination place. Organization need to realigned their accommodation services and
provide customers cabs and buses for reaching to hotel easily. Transportation is one of the major
needs of consumer which need to considered by firms in order to engage people with them for
longer time. Tourist required accommodation facility within low budget which is useful and
beneficial for them. If company provide accommodation according to customers needs and
realign it to meet with people expectation they can earn profit and increase profitability. With the
help to realign assets they can gain clients loyalty and build good relationship with them. For
example, with the help of taking feedback and review about company performance and services
management can improve their services effectively and satisfy people. They must realign food
and beverage facilities and serve on time delivery to its customers.
CONCLUSION
As on the basis of above report it has been analysed the importance of customer
relationship management and also described how such factor affect the whole reputation of the
company as well. Present report defined the different component of a CRM model that a tourism
destination could follow to attract more visitors. Besides, report also concluded the relationship
with travellers as well. In the next segment of the study applied a CRM model which was a

Value chain model and also explained the justification with how DMO and local enterprises are
currently creating a value for its travellers.