Customer Relationship Management for Tourism and Hospitality in London

This report delves into the application of Customer Relationship Management (CRM) within the tourism and hospitality sector, specifically focusing on London, UK. It begins by defining CRM and its components, emphasizing its role in building strong customer relationships. The report then introduces the CRM Value Chain Model, highlighting its relevance for acquiring, nurturing, and retaining customers in the tourism industry. Task 1 explores various CRM components, including sales force automation, human resource management, lead management, customer services, marketing, workflow automation, business reporting, and analytics. Task 2 evaluates the theory and practices of effective CRM, discussing the importance of CRM in enhancing customer satisfaction, loyalty, and business profitability. The report also provides examples of good CRM practices in the tourism sector, such as social media engagement, employee satisfaction, and training. The report concludes by emphasizing the significance of CRM strategies for destination management organizations in London, offering insights into how to attract and retain travelers. This document is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

Customer Service
Management for Tourism
and Hospitality

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Different components of CRM Model to build relationship with customers..............................1
TASK 2............................................................................................................................................5
Evaluation of theory and practices of effective CRM.................................................................5
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Customers play a crucial role in any organisation and they are consider as a king of
market area (Mok, Spark sand Kadampully, 2013). Company is developing products and services
with motive of satisfying needs and wants of customers. So it is very essentials to develop and
maintain effective relationship with customers. CRM is a technology or strategies which can be
used by organisation to interact with customers as well as build strong relations. This report is
based on tourism destinations of London, UK. This place is a capital of England and it is also the
largest city. There are many attractive places that travellers and tourists must visits. Some major
attraction of London are Buckingham Palace, Hop on hop off bus tour, London Eye, Sea Life
London, Tower of London and so on. This assignment includes various components of customer
relationship management which helps in attracting customers and developing positive
relationship with customers. Model of CRM that creates values to hospitality and tourism
business and their customers.
TASK 1
Different components of CRM Model to build relationship with customers
Customer relationship management can be define as a various practices or technology
which help in managing strong relationship with customers. It includes all strategies developed
by company in order to improve communication and interaction between customers and
organisation. CRM refer as a technology or techniques used by company for managing its
relationship with potential customers (Gibson and Parkman, 2018). All these tools and
techniques will help in providing support to organisation in order to build effective relationship
with customers. CRM focus on organisation's relationship with customers, staff, colleagues,
services users and suppliers. It helps business to analyse data and interest with customers in order
to improve products and services of company so that they can offer better services to customers.
Purpose of CRM is to increase profitability of company by providing valuable products to
customers. Its aim is to optimize relationship of company with customers.
There are various models of CRM which help hospitality and tourism businesses in
developing effective strategies. These strategies will help company to build strong relationship
with customers. Customer will only visit place or hotel when they have good relationship with
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them. CRM models have different components which can be used by tourism destination.
Different company and operators of London, UK can use CRM Value Chain Model. They can
use this model in order to acquire, nature and build relationship with travellers of this tourism
place.
Customer value chain is the chosen model of CRM for creating and developed effective
relationship with customers (Uysal and Williams, 2013). This model includes set of various
activities or process of businesses. This CRM model was developed in 1985 by Michael Porter
with motive of developing strategies that will help in increasing relationship of business with
customers. This model was developed with idea of value chain which is directly based on
process view of organisation. Value chain is based on the concept of all decision which provide
support tools. This model is based on two components or activities which is primary and
supporting activities.
Components of customer relationship management
There are various components of customer relationship management which are essential
for its success. These components of customer relationship management are very essential for
success of travel organisation. Some of these components with there importance is mention
below.
Sales force automation
This is very important components as it deal with forecasting, recording sales as well as
keeping track on interaction with potential customers. Sales force automation is very helpful in
analysing opportunities for business as it results into increasing sales productivity (Nickson,
2013). This is the component which is for generating revenues opportunities as it is undertaking
by maximizing business.
Human resource management
This component of CRM will leads to increase effectiveness of management within
organisation. It deals with usage of human resource and their skills or ability which will help in
building effective relationship with customers. This component is useful for utilizing correct
human resources and their skills or capabilities for better functioning of organisation and
developing strong customer relationship.
Lead management
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Lead management can be refers as a process of keeping track on sales lead and their
distribution. Company can be very benefits by this component as it involves effective
management of campaigns, designing customized forms etc. Businesses will be benefited by this
component of customer relationship management as it will help in effective management.
Customer services
This component is related to collection of information and data about customers. These
information includes habits of travellers and other information about customer which leads to
develop effective relationship with customers.
Marketing
Marketing is a promotional tool which is very important for an organisation. It is very
important for companies dealing in travel and tourism sector to market its product and services
so that they can attract more customers (Chathoth and et.al., 2016). Marketing is a essentials
components for developing effective relationship with customers. It will help company to
identify and target potential customers in order to increase sales and potability of company.
Workflow Automation
This refers to number of process of management which run simultaneously. This
component is very helpful in process of cost cutting as well as streaming of all process. This
process of work automation will leads to reducing extra expanses of work process business and it
also reduce work forces that is getting wasted.
Business reporting
Customer relationship management will help in creating effective reports of business.
Business reporting will leads to providing reports on business take are very curial for business
(Marković and Raspor, 2013). These reports are very significant for forecasting future
possibilities and well as exporting these reports to other systems. These report provide in depth
and accurate information about business process and its functions.
Analytics
Analytic is a process which help in studying and representing collect data in a better way.
This is very important for analysing needs and wants of customers so that new trends in market
can be identified. This process includes creating graphical representation in the from of charts,
figures, diagrams with use of data collected. For this both current data as well as information
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collected previously can be used. Analytics of data is significant to understand in depth
knowledge about customers and creating strong customer relationship management.
It is very important for business dealing in travel and tourism sector to consider customer
relationship management as a important strategies (Fitz and et.al., 2013). This play a very crucial
role in dealing with customer as well as developing effective relationship with them.
Significance of considering CRM as a most important strategies of business is mention below.
 CRM always consider customers as its first priority and it provide various tools and
techniques to company which help in collecting and maintaining data about about
potentials customers.
 This strategies help company by increasing its sales and profitability. CRM leads to
provide better product as services to customers.
 CRM is very essential in analysing potential customers of organisation and which
customers will be more profitable for business.
 It will also helps in effectively targeting customers as well as communicating and
interacting with team.
 This strategy will leads to creating strong bond with customers and identifying more
accurate information about customers.
 This will also help in acquiring new customers towards organisation.
Some examples of good practices that can be used within tourism sectors that will help in
building strong and effective relationship with customers. There are many practises which can be
used by companies of hospitality and tourism sector (Patrick, Maggon and Chaudhry, 2015).
They should use new and innovative techniques to attract more travellers towards travel
destination. New examples of good practices are mention below.
Social media: Social media is the most effective platform which can be used by travel
companies. Through use of social media company can post attract images and videos of London
to influences customers. This will leads to creating awareness about places to visits in London
and as well as other things which will attract customers. By social media company communicate
with customers or travels. This is best platform to understand needs and wants of customers as
well as informing about several packages which company is offering. Social media is a two way
communication and this will be beneficial for company also as they can get proper and direct
feedback form customers.
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Happy staff: Staff of company is responsible for carrying out all activities and functions.
They are the person who will communicate with customers and provide them effective services
in order to build strong relationship with them. If human resource or staff of company is not
satisfied they can not perform effective (Wong, 2013). Happy staff of organisation will leads to
increase sales and profitability by providing quality services to customers. So company should
conduct activities which leads to satisfy needs and wants of employees. By fulfilling requirement
of staff members company can motivate them to perform better and provide effective customer
services.
Training of employees: Training is a very essential part of organisation. Company
dealing in travel and tourism sector needs to train its employees about new and updated
techniques or technology in market. By training employees, company can improve their skills
and abilities. Organisation should focus on improving capabilities and skills of employees so that
they can effectively communicate with customers and develop strong relationship with them.
Training will help in building new skills or updating current skills such as communication skills,
problem solving skills, critical th8inking skills and so on.
It is very important for travel and tourism companies to conduct new and innovative
practices which are not used by any other rival company. These new good practise of CRM will
help in gaining competitive advantage in market area (Rahimi and Kozak, 2017). There is huge
competition in hospitality and travel sector due to low substitution cost. Companies which are
using old and traditional methods will not be able to attract and influences customers where as
business which use new and modern techniques will be able to gain larger market share.
TASK 2
Evaluation of theory and practices of effective CRM
Effective customer relationship relationship will leads to better efficiency in marketing
area as well as effective communication with customer. Better customer relationship will help
company and operator of travel and tourism company to take better decisions that will leads to
increasing sales and profits. Effective CRM is very essential for improving accuracy of
forecasting demand and customers requirement. This is most important for increasing customers
loyalty.
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Developing strong and effective management of customer relationship is very important
for destination management organisations. This will be a aid for these companies for attracting
travellers towards London. CRM is a ability to access or improve customer satisfaction by
fulfilling their needs and wants (Prentice, 2013). If these destination management organisation
are not able to developed strong relationship with targeted customers then they will not be able
top retain new customers. Due to ineffective CRM practices, company will lose competitive edge
over other rival organisation. For developing effective CRM strategies, company needs to define
and build a vision. After developing a strategic vision and long term goals, organisation needs to
align various CRM strategies to achieve set goals and objectives. These strategies need to be
implemented on the based of effective plan. These plans can be consider as a framework on
which all strategies will be implemented to attain vision and desired goals of business.
Effective CRM can be attained by implementing model. There are various CRM models
such as IDIC Model, QCI model and CRM value chain model. Destination management
organisation for London, UK can use CRM value chain model for influencing customer or
travellers to this location.
CRM Value Chain model
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Illustration 1: CRM Value Chain Model.
Source: Better Targeting your Customers with CRM Value Chain Model.

This models was developed by Michael Porters and it is a high level model which help in
developing strategies to attract travellers and customers towards tourism destination. This model
is based on processes which is used by company to develop an end product and services to
customers. This models applies this principles to developed effective customer relationship.
CRM value chain models helps in identifying and prioritizing most valuable activities of
company or tourism destination (Dhar, 2015). This models helps in improving process of
company and operates in order to gain competitive advantages. CRM models is divided into two
parts such as primary stages and supporting stages.
Primary Stage- This stage of CRM basically includes five main processes that helps in
developing strategies.
 Customers portfolio: This is the first step which helps in analyse customers types and
interest. In order to develop strong relationship with customers, travel operates or
companies needs to identify customers who creates most values to company.
 Customers intimacy: After analysing customers portfolio, next step in this process is to
engage with potential customers. This step leads to collecting data about customers and
build original database of customers information. This will help company in offering
better quality products as services according to requirement of customer's.
 Network development: Team network development includes effective communication
and interaction with customers, partners, suppliers and people who are using these
services. This stage focuses on using database of company in business process so that
entire system works together in order to increase customer's experience.
 Values proposition development: After collecting and analysing information of
customers, company needs to make decisions about who are their targeted customers and
which type of customers they prefer to serve (Wuand, 2013). In this stage, there is a shift
of business policies from traditional strategies in order to provide better services to
customers.
 Relationship management: In last stage of CRM value chain models, it includes
customers life cycle. This can be consider as a process of managing life cycle of
customers in order to satisfy them with relationship and experience with business and its
services.
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Supporting stage- This include various conditions which are necessary to implement
effective strategic process of primary stages. There are five supporting conditions which are
mention below.
 Leadership and culture: It refers to culture and leadership of company which is
operating in travel and tourism company (Bilgihan and Nejad, 2015). Organisational
culture and leadership play a major role in analysing whether company will be able to
meet long term relationship with customers or not.
 Procurement processes: Process of organisation will help in effective functioning of
organisation. It includes various activities for achieve set goals and objective of company.
 HR management process: This will provide support to company by developing various
policies and management process. HR management process will suggest how company
should carry its functions and activities.
 IT/ data management processes: This is very important for organisation as without
support from IT or data management process CRM can not work. All data and
information of customers are saved in technology.
This model is very important for companies dealing in hospitality and tourism
companies. Significance of CRM value chain model in mention below.
Importance
Acquiring new customers: Customer relationship management value chain models is
help in influencing and attracting customers towards organisation. This models will work for
benefit of companies and provide aid in acquiring new customers (Okumus, 2013). For
influencing travellers or tourist to visit London this model of customer relationship management
will be very beneficial as this model stages will work for providing support to business and its
functions. All stage of CRM value chain models will be work to find and attract new customers
by conducing different activities.
Developing strategies: CRM value chain model will help in developing effective and
efficient strategies for destination management organisation. It will help company in building
strong relationship with customers with use of strong strategies. Company needs to develop
winning strategies so that they can gain competitive advantage for other companies dealing in
this industry. There are many company which are working in this sector and their motive is to
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increase sales and profitability. So for attaining these goal, it is very important for business to
develop strong and effective strategies.
Enhancing cross sell and up sell opportunities: This model work on maintaining
relationship with customers and travellers. Last stage of CRM value chain model is based on
relationship management. By building and managing relationship with customers and travellers
company can increase it sales (Radojevic and et.al., 2015). This model is very essential for
enhancing opportunities for cross sell as well as up sell possibilities. Destination management
organisation can use this model as it will help these companies in enhancing cross sell and up
sells by stimulating travellers from various part of the world.
Retaining customers: Attracting customer is important for company but it is very
essentials for these organisation to retain customers. Retaining customers will be very helpful in
developing strong relationship with their customers as well as enhancing loyalty of customers
towards organisation. This sector has many companies and in order to deal with this high
competition firm needs to provide such products and offering that will leads to retaining of
customers. This model includes network development stage which is very helpful in building
such relationship with customer that will leads to retain customers and enhance loyalty of
customer towards organisation.
Providing customer support: Stages of this model such as customer portfolio, intimacy
and value propitiation development is help company in analysing need and wants of customers.
By identifying requirement of customers company can offer better products and services to
customers. CRM value chain model is very essential in providing effective customer support so
that they chose their services (Law and et.al., 2013). This model is beneficial in analysing
preference of customer and providing right data and information about customers. By
considering like and dislikes of customers, organisation operating in hospitality and tourism
sector can enhance their relationship with customers.
Staff retention: Customer relationship management value chain model includes various
supporting functions. These function provide assistance to company in establishing strong
customer relation. This model has giving importance to human resources of company.
Destination management organisation focus on increasing skills and ability of their staff
members so that they can perform better. By enhancing capabilities of their staff, it will not only
leads to building effective relationship with customers but also helps in retaining staff members.
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Good practices
There are various good practices that can be used by destination management
organisation to attract new customers as well as retain their current customers. Some good
practices are mention below.
 Developing attractive and informative website: Organisations operating in destination
management need to develop an attractive websites. Websites are very useful and
important in providing correct information about product and services offered by
company (Rauch and et.al., 2016). Business needs to refresh and update their websites so
that if an individual visit their website can have completed information about company as
well as its products and services.
 Collaboration with local network suppliers: Destination management organisation can
collaborate with local companies so that they can offer better services to travellers. Local
companies have huge effective networks which leads to effective and efficient working of
businesses. If these companies tie up with local network they can conduct their business
operators in more cost effective manner. Local networks have better idea resources and
ideas about market area. Collaboration with local suppliers can help company in gaining
competitive advantage as well as increasing its profitability.
CONCLUSION
From the above report it can be easily concluded that management of customer
relationship with company is very essential for enhancing business and its operations. Customer
are consider as a king of market area so managing effective relationship with them will be very
profitable for firm. Companies dealing in hospitality and tourism sector can use CRM model so
that they can achieve their desired goals and objectives. These models provides a frameworks for
effectively and efficient working and gaining competitive advantage from other rival companies.
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