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Challenges Faced
Due to a very specific business handling in the hotel industry, which is usually built around and focused on the PMS system in place, the hospitality industry lags behind when it comes to implementing CRM solutions. There are two main challenges for implementing CRM in the lodging industry: A lack of Group 3 Page 3
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E-CRM Components in Hotel Industry Sales functionality: Contact management profiles and history, account management including activities, order entry, proposal generation Sales management functionality: pipeline analysis (forecasting, sales cycle analysis, temporary alignment and assignment, roll up and drill down reporting). Telemarketing/Telesales functionality: call list assembly, autodialing, scripting, and order taking. Time management functionality: single user and group calendar/scheduling, e-mail Customer service and support functionality: incident assignment, escalation, tracking/ reporting, problem management/ resolution, order management/ promising, warranty/ contract management Marketing functionality: campaign management, opportunity management, web-based encyclopedia, configuration, market segmentation, lead generations/ enhancement/ tracking. Executive information functionality: extensive and easy-to-use reporting ERP integration functionality: legacy systems, the web, third party external information Data synchronization functionality: mobile synchronization with multiple field devices, enterprise synchronization with multiple databases/application servers E-commerce functionality: manages procurement through EDI link and web-server and Page 5
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Ritz-Carlton Introduction
The Ritz-Carlton Hotel Company, L.L.C. is the parent company to the luxury hotel chain, The RitzCarlton Hotels. Ritz-Carlton operates 81 luxury hotels and resorts in major cities and resorts in 26 countries worldwide. The current company was founded in 1983, when the brand was bought from the previous owners to start The Ritz-Carlton Hotel Company, L.L.C., based in Atlanta, Georgia, which began expansion of the brand to other locations. The hotel company is today a subsidiary of Marriott International. The company grew to become the hospitality leader in the US under the leadership of President and COO Horst Schulze. Schulze instituted a company-wide concentration on both the personal and the data-driven sides of service: He coined the company's well-known customer/employee-centered credo, "We are Ladies and Gentlemen Serving Ladies and Gentlemen" and the set of specific service standards on which The Ritz-Carlton employees base service through the present day. The Ritz-Carlton Hotel Company is now headquartered in Chevy Chase, Maryland, located in the Washington, D.C. MSA.
Gold Standards The Gold Standards are the foundation of The Ritz-Carlton Hotel Company, L.L.C. They encompass the values and philosophy by which they operate and include: The Credo Group 3 Page 6 The Credo The Motto The Three Steps of Service Service Values The 6th Diamond The Employee Promise
The Employee Promise At The Ritz-Carlton, Ladies and Gentlemen is the most important resource in our service commitment to our guests. By applying the principles of trust, honesty, respect, integrity and commitment, nurture and maximize talent to the benefit of each individual and the company. The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened. Group 3 Page 7
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Why CRM? Ritz-Carlton believes in providing luxury services to all its customers. It stresses on the customer value as its competitive advantage. Creating a positive customer-perceived value leads to customer satisfaction and enhance customer loyalty. In order to implement its credo and corporate philosophy that focus on service quality, it utilizes a well laid out CRM framework. Different types of bonding initiated by Ritz Carlton Ritz-Carlton tries to bond with its customers at different levels: Financial bonding - In September 2010, Ritz-Carlton introduced a loyalty-and-reward program called Ritz-Carlton Rewards to have financial bonding with customers. It is linked-up with the likes of Abercrombie & Kent, Neiman Marcus, National Geographic Expeditions and Vera Wang, and customers can get air miles instead of reward points, if they prefer. Customers earn ten points (or two miles) for every dollar spent on room rates. It's also linked with Marriott's loyalty programme, Marriott Rewards. Customers can't be a member of both programmes, but members of Ritz-Carlton Rewards can earn Group 3 Page 8
CRM is an iterative process that turns customer data into customer loyalty through four activities: Group 3 Page 9
The process begins with the collection and analysis of data about a retailers customers and the identification of target customers. The analysis translates the customer information into activities that offer value to the targeted customers. Then these activities are executed through communication programs undertaken by the marketing department and customer service programs implemented by customer contact employees, typically sales associates. Ritz-Carltons CRM System: Types of CRM and Ritz - The Ritz-Carlton have a Customer Loyalty Anticipation Satisfaction System (CLASS). Operational CRM - The front line employees record lots of data about customers including their preferences and specific needs. A "guest preference pad" is part of each employee's uniform. Any guest preferences are noted on the pad and routed to the guest recognition office. Analytical CRM - The data information fed into the CLASS system is analyzed to identify various trends and patterns that help employees service the customers in the best possible way. IT system CLASS To extend competitive advantage by automating the customer service process, Ritz-Carlton in 1998 implemented a customer relationship management program called CLASS--"Customer Loyalty Anticipation and Satisfaction System". CLASS was designed by integrator Cambridge Technology Partners with considerable input from all the people who would be using it, so the system was seen from the start as something that would make everyone's jobs easier. The company recognizes that the most important component of the CRM system is Ritz Carlton's employees and the process built around them. They supply the initial information that is added to the system as well as carry out the services detailed within the system. If the employees didn't put the information to real and concrete use, the system would be worthless. CLASS: The Methodology When a booking is made, the relevant profile information (smoking and bed-type preferences, for example) is available to assist in the reservation process. At that point, the guest's current reservation is linked to his or her existing profile. The information is accessed again when the guest recognition office prepares for upcoming arrivals, up to ten days prior to actual check-in. The guest recognition team reviews the profiles of incoming guests and prepares an arrival report in CLASS to distribute throughout the hotel. This report specifies each department's responsibilities regarding each repeat guest. At each of Ritz-Carlton's 32 hotels, a guest recognition manager is the repeat guest "expert," and all other hotel staff is responsible for noting guest preferences and sharing them with the guest recognition office. Group 3 Page 10
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Engaged employees understand the cultural core of Ritz Carlton- delighting the customers. Technology is just an aid. The employees are trained and nurtured to believe in the companys credo and do their best to satisfy the customers. Customer engagements are aided and facilitated by the CRM systems. Employees are trained to ask the right questions and seek the relevant information for recording customers preferences and specific needs. A culture oriented towards serving customers in the best way possible only makes the use of CRM tools easier. Without employee motivation, he best of software and technologies will fail.
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Future of CRM
To move forward, CRM must return to where it once was. Technology will of course provide new methods, but the present and future products with which to do so will still need to facilitate real, and personal, relationships. Successful business is and always will be the result of successful relationships. Corporations will gain the benefits they attempt to achieve by allowing their employees to use CRM as an individual and building relationship value, rather than continuing to gather information for the sake of gathering information. It may seem counterintuitive, but by ignoring the cumbersome corporate intrusions and focusing on building the relationship value, everyones goals will be met. Many Stalwarts in CRM Industry believe that there will be increasing number of functionalities included in CRM suites. The functions of CRM are cropping up at many other places. There is always the conflict between efficient and effective. In future lot of focus would move to efficiency rather than just the number of calls, like giving the sales rep more time to make average sales calls. There will be a need of average sales person to make great service calls which would in turn result into helping the customer climb the ladders of Customer engagement like client, supporter, advocate or even partner. CRM customers are also demanding more and more knowledge management functionality. Essentially, in the e-Business economy, there is a need to deliver customer organizational knowledge on demand, anytime and anywhere. In future we would need a push to a lot more functionality being put into the CRM tools themselves. Lead tracking systems are great, but what I really want now is knowledge management systems, sales coaching systems, and service intelligence systems to help take the next step. Vertical solutions are another hot trend. We are approaching the end of the one size fits all CRM Group 3 Page 15
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to $6B in 2017, attaining a CAGR in the forecast period 2012 2017 of 10.3%. The future of CRM for sales and marketing ought to be. 1) Out-of-the-box Lead Recommendations: Todays CRMs are empty; they require data to be added to make them useful. CRMs of the future should be purchased and upon first use recommend and identify customers for your business. The solution should completely eliminate the need to buy leads separately or hire a lead management team to find good leads. For example, if Im selling janitorial services to office buildings, my CRM should every morning recommend new office building management companies to me based off of my existing customer base, quality controls, and marketing response. 2) True Canonical Leads: For every lead, every sales and market team should have that same lead. Across competitive and non-competitive industries, leads are duplicated. A specific lead should be canonicalized as a singular lead across all marketing and sales teams. Software should learn which leads are active, inactive, or who need specific products or services. CRM users should all be contributing data to the same canonical lead record so long as that data contribution is noncompetitive. This will significantly cut down on bad data, wasted time, and more importantly spam to potential customers. If someone doesnt need your product or service, the data should tell you, and we can only realize this if we all contribute to the same lead records. 3) Pipeline Data Views: Sales has evolved: inside sales is overtaking field sales. Therefore, division of labor has become more important. Within an organization, there are reps who qualify leads and set appointments, and those who close leads. These jobs are very different and the future products to enable these jobs will provide different views for each type of rep. Lead Development Representatives should see recommendations of leads they need to qualify and Account Executives should see more detailed information about a qualified customer are they on Facebook FB? Do they Tweet? How good are their reviews on Yelp YELP? We cant have a single view for all types of reps; software should present the right data to the right rep at the right time. Coupling great data and the right data within each view drastically improves rep productivity. CRM is one of the most dramatic, fundamental changes in the history of business and is fundamentally the expression of the customer-centric business philosophy. It is how you respond to the fact that customers are now the drivers in our economy. Vertical solutions are another hot trend. There are different types of customers, different types of Group 3 Page 17
Conclusion
Implementing an effective CRM solution is not complex. Adequate planning, effective communication, stakeholder involvement and mistake avoidance will ensure that your initiative gets off the ground easily. Most premier hotels across India have implemented CRMs. They have realized that a happy and satisfied customer is a retained customer and thats the key in creating superior brand equity and better returns.
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