Theme Paper CRM in Tourism Sector

THEME PAPER

CRM IN TOURISM SECTOR

Presented to
Dr. Subhash Sharma

Indian Business Academy

On
Feb 28th, 2008

In partial fulfillment of the requirement for the

Course in the
Post Graduate Diploma in Business Management

By
Harihara Subramanian K
II Year
FPB0608/018
International Business & Marketing

CONTENTS

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Theme Paper CRM in Tourism Sector

Sl No. Topic Page No.

1. CRM Literature 03
2. Customer Relationship Management – Benefits 04
3. CRM Application with the business function 05
4. CRM in Travel and Tourism 06
4.1 CRM in Travel and Tourism 06
4.2 E- CRM in Tourism Sector 08
4.3 Internet in Tourism (E-Tourism) 08
5. E-CRM –a –Break-Through for Indian Tourism 09
5.1 E-CRM Services in Tourism 10
5.2 Major Components of E- CRM 10
6. Further exploration- Qualified Prospects, More Revenue to Indian Tourism 11
7. Conclusion 12
8. Case 13
9. Reference 14

INTRODUCTION

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Theme Paper CRM in Tourism Sector

C
ustomer Relationship Management is all about calling out information from all the
dealing a company has with the customers in a useful, current from that will help
both company and the customers to do better business. CRM is the establishment,
development, Maintenance & optimization of long term mutually & organizations.
Successful CRM focuses on understanding the needs and desires of the consumer & its
achieved by planning these needs at the heart of the business by integrating them with the
organization Strategy, people, technology & business processes.
In this dynamic global market scenario companies need to have interaction with customers is
order to retain them and also to with new customers and keep them. New capabilities are
being introduced to meet customers needs better, access new customer segments and lower
the cost of service. At the same time, expert customers are demanding consistent service the
quality. The new Mantra to achieve this goal is customer Relationship Management.

CRM LITERATURE

A revolutionary new marketing paradigm, Customer Relationship Management

(CRM), is emerging in many large corporations. The CRM model first started before a
decade ago. Bits & pieces of it have been deployed in same organization and considerable
experimentation has occurred, mostly though, with mixed results. CRM is essentially a
customer data intensive effort. Origin at CRM can be traced back to the managements
concept of Relationship Marketing is an integrated effort to identify, build up and maintain a
network with individual customers for mutual benefits of both sides. Berry first coined the
term CRM in 1983. He mentions in this paper on relationship marketing that there is wide
literature available on attracting new customer, but hardly there is any work done on finding
the ways to retain customers. CRM strategies Mentioned by him are
1. Core service strategy
2. Relationship customization
3. Service augmentation
4. Relationship pricing and
5. Internal marketing.
These strategies can be used in combination to develop proper marketing strategy and they
are independent of one other. Customer retention and customer share are also very important
apart from attracting customers. Customer’s stratification is concerned with various factors

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Theme Paper CRM in Tourism Sector

like quality of products/ service, price of product/ service, which are the outcome of CRM
processes. When the entire process of CRM is property carried out, it leads to customer’s
satisfaction, if a customers in more satisfied he gets delighted & thin satisfaction & delight
leads to loyalty.

CRM solutions that enhance customer service, build a single- point interface to customers,
facilitate cross selling and maximize customer retention.

CUSTOMER RELATIONSHIP MANAGEMENT – BENEFITS

To realize the benefits of CRM it is important to have an integrated solution across all
customer information system, typing together the front and back offices for a complete view
of customers in order to service them better.

Here, Philip Kotler’s 4p’s can now be replaced by the A, B, C, D, and Es as follows:
• Any place because anytime-Any where shopping replace ‘place’ companies must
design integrate strategies for the market space, the Market place and Market
face. Customers want convenience.
• B– Web relation drive revenues. A brand reflects relationship capital. Thick of
customers as a part of your B – web and prospects as candidate for relationships,
not as market for your products. B- Web is synonym for Business web or
ERPWEB or e- business.
• Communication works, not ‘promotion’. A man in communication is a Man in
business. One – way media like broadcasting can be part of the marketing mix
but the customer decides whether- and with whom- to engage in a one, two, or
multi- way communications.
• Discovery of price replace fixed ‘price’ the days when firms controlled prices are
nearly over. Supply chain management, which manages supplies and make- to-
stock manufacturing. Every make- to –order product will have different price, so
it is discovered.
• Experience replaces ‘product’ customers pay for experience, not products.
Products must be bundled with enhanced, customized services. The automobile

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Theme Paper CRM in Tourism Sector

experiences replace the product, as the car becomes a platform for transportation,
interactive entertainment, safety, doing business a having fun.

CRM APPLICATION WITH THE BUSINESS FUNCTION

E- Commerce web storefronts website: Are covering into a customer – centric solution,
which allows organization to interact with, sells to and service customer through all channels.
Customers are major users of thin business function.

Channel management / Partner Relationship Management: Extends a CRM capability to

the needs of extended selling channel such as distribution and value added resellers. Business
partners are major users of this business function.

Sales Automation: Provides sales professionals with access to critical customer information
and tools that enhance their ability to effectively sell as well as manage their time. For
example: contact management calendaring function, forecasting tools, configuration models.
The sales department uses this business function.

Marketing Automation: Provides marketing department with campaign management, lead

generation, data mining tools, closed loop lead management is one of the most important
function of marketing automation and relies on integration with the CRM data repository
uses this function for cross promotion, advertising and direct marketing.

Customer service and support or Internal Helpdesk or web self-service: Enables the
enterprise to effectively and efficiently address customer question, problem or issues. While
customer satisfaction is the primary goal, many organization are seeking to increase revenues
while providing customer service through ‘ cross- selling’ supporting field service person
through application covering network management an d support, call logging and resolution,
and internal customer support. The customer service department uses this business function
to provide quality service to customers.

VALUES OF CRM

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Theme Paper CRM in Tourism Sector

A customer Relationship Management strategy designed to increase revenue and business,

increasing customer satisfaction and loyalty, enabling more efficient business processes and
utilizing lower cost technologies. CRM solutions improve sales and marketing efforts and
enables organizations to provide superior service to customers. New customers are gained,
and existing customers are retained and busy more in grater quantity.

CRM IN TRAVEL AND TOURISM

The world travel and tourism council estimate Rs.46450cr. of business travel from India
by 2013. The estimate tourism business is expected to be worth some Rs.24000- 25000cr.
in 2004 to India. While a lion's share of traffic is drawn by corporate, leisure travel
or holidaymakers are exerting themselves in a big way. The Indian travel scenario
is undergoing a metamorphosis. With more and more youngsters charting out their
careers at an early age and the increasing competition adding to the stress, they are
constantly on the lookout for places where they can either drive down if not fly
down, for a quick break from their daily routine. Again larger disposable income
available, coupled with greater dissemination of knowledge and information
through the electronic media, is translating into increased holiday travel
opportunities.

With almost every tourist spot in India as well as overseas registering a steady
increase in the number of visitors more and more players are sensing a great
business opportunity and are entering this segment. Most state governments in India
have entered the fray, competing among themselves as well as with private agencies,
and are promising the very best in terms of infrastructure as well as services, to woo
the holidays.

With competition hotting up, more and more hotels and travel agencies are
unleashing attention grabbing advertisements with unique packages - all with a
view to enticing the travel minded customer to use their facilities and services.
Today the main focus of organizations is acquiring new customers while retaining
the old ones. Consequently, Customer Relationship Management is emerging as
the core marketing activity for businesses operating in fiercely competitive

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Theme Paper CRM in Tourism Sector

environments. Organizations are now paying more attention to their relationships

with existing customers and stepping up efforts to increase their share of
customer's purchases. Modern CRM strategy is all about capturing the customer's
heart share more than his mind share by offering a differentiating value
proposition through various innovative ideas.

The nature of the travel and tourism industry being service-oriented, it has to
improvise on existing mechanisms and come up with innovative ideas to gain
customer loyalty and attract new clientele. Traditionally, travel and tourism
industry did not lay much emphasis on CRM. Travel was then believed to be a
one-time affair. Tourists were therefore considered to be ‘one -time’ customers and
they were taken to be a floating population. This made the industry treat its
customers in a casual manner, with the players not too keen on maintaining or
building a long lasting relationship with customers. However, with the changing
lifestyles, attitudes and people having access to faster and cheaper communication
mechanisms, information gathering and sharing (through e-mails etc.) have come
to playa key role in the travel and tourism industry. Customer's view has crucial
implications on the industry. The significance of treating even the' one-time
customers' cordially is being well recognized today. A debilitating customer
experience translating into negative publicity regarding a hotel or an agency may
result in the loss of a group or at times a whole generation of customers. To ensure
they do not get into this trap, the travel and tourism industry, be it a small hotel,
agency airline or a large hotel chain, are investing heavily on CRM.

In a competitive environment, the ability to capture, interpret, and leverage

detailed customer information has become mission-critical, especially in the
service industry. Customer relationship management (CRM) applications enable
travel and tourism providers to maintain brand value and perform more
competitively in their dynamic marketplaces. CRM supports the most demanding
sales, marketing, and customer service requirements of this industry. Built on the
market-leading functionality, CRM empowers customer-facing professionals with
unmatched levels of reliability, scalability, and user acceptance. CRM applications
help service organizations manage each interaction - whatever the channel - for

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Theme Paper CRM in Tourism Sector

maximum customer satisfaction and revenue potential.

E- CRM in Tourism Sector

CRM has emerged as a significant strategy for customer retention and for long- term
customer profitability. Faced with an increasing pressure to retain the old customers, the
response of many firms has been to attempt to build up strategies for customers satisfaction
and hence customer retention. Customer is ‘ the king’ in today’s business world old
business practices built around traditional product marketing and sales modified or replaced
by customer- centric marketing. In such a scenario, customer relationship management
CRM/ E-CRM enable to retain a one-one relationship with the customers – a step towards
customer loyalty.
Tourism is a global mega industry. India is one of the oldest civilizations with a
kaleidoscopic variety and beauty. Through, tourism is the third largest foreign exchange
earner of India; it is not given the right kind of importance it deserves. Indian tourism can
gain momentum when translated into a marketable product through well-planned integrated
problems.

“Customers loyalty, has always been valuable

But today it has become vital for success”
- Sumeet Kanpur, CEO, Global Groupware solution.

CRM is a one to one relationship, which rest ion ideas about reducing costs and increasing
long- term profitability.

Internet in Tourism (E-TOURISM)

Internet has become one of the most important information sources for Tourism worldwide.
Global exposure through Internet has triggered off a desire to travel overseas, e Tourism
sector remains the first Internet sector in term of value. There is an increase in the number of
Internet users using services to get driving directions, maps, for place to stay, for things to
do, airline schedules, travel packages, A new type of user slowly but surely is appearing.

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Theme Paper CRM in Tourism Sector

According to the survey carried out by the Forrester Research Firm, the Internet has become
one of the most important sources for European travel worldwide. The predominance of the
Internet as a favored information source is such that among European Internet users, it is as
much as 30 to 60% of item who use the Internet to gel travel information. Online Consumer
Sales at Travel U.S. Sites, indicate the rapid usage of Internet for travel.

INDIAN TOURISM SECTOR

India, a land of variety and beauty, occupies a strategic position in Asia. A beautiful country
side, a land of temples, vast desert land with oasis, golden beaches, lakes and waterfalls,
varied rich wild life, mountain ranges constitute a great potential for tourism.

The need of the hour is a business like approach in promoting tourism. In business terms,
every tourist is a prospective sales agents. He markets tourism more than any brochure,
booklet or advertisement does. Hence, business strategy in tourism should involve attracting
people of all classes, which in turn accelerates the means of bringing all the potential tourists
for a quantum leap in Indian tourism. Not only attracting the tourists is vital, but also
developing goodwill is imperative. It is essential to offer services of money worth to develop
goodwill.

E-CRM –A –BREAK-THROUGH FOR INDIAN TOURISM

In order to reap out the true potential of Indian tourism, it is essential that every participant of
the sector (hotels, restaurants, travel agents, amusement providers, tour operators, etc.,) offer
services money worth. Department of tourism, government of India by implementing E-
CRM can build up a platform that unites these different components giving the tourists the
most requires and valuable information.

In the digital economy and in the era of e-tourism, E-CRM will be a major source to share
data and process transactions in real time. E-CRM in tourism sector helps to strengthen
relationships with tourists and thus goodwill to Indian tourism.

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 Theme Paper CRM in Tourism Sector

E-CRM SERVICES IN TOURISM

The substantial increases in the volume of tourist information available as a consequence of

rapid technological change, globalization and the blurring boundaries of competition are the
main reasons that there is a paradigm shift occurring in the tourism industry the world over.
The modern customers are more educated, experienced, independent and demanding.
Information technology is opening up an astonishing array of travel and vacation options for
this new type of tourist. To remain competitive in today’s global economy, tourism
destinations and industry players alike must adapt.

These days, there is an urgent need to strengthen customer relations for ways to extend
market reach, improve quality and customer service so as to increase profitability. In general
the main challenge is to track potential and present travelers, to stimulate them and reward
them for coming again!

Information and knowledge have become the most important strategic factors for success in
tourism. E- CRM services provide tourism destinations with the tools they need to collect,
store, and retrieve all tourism-related data. Using this technology, destinations can improve
analysis of consumer behaviour and preferences, and are in a better position to respond to
informed, more demanding, and less predictable tourists. Destinations hence can convert this
business insight into more targeted marketing and to keep up with fast-changing market
trends and increasing competition.

MAJOR COMPONENTS OF E – CRM

1. CALL CENTER AUTOMATION(e-CALL CENTER)

Motivations of tourists are heterogeneous and composed of diverse elements. The infusion
of Web data gives live call center agents a clear picture of tourists interests based on how
they browsed the site. Screen views show how many different pages a specific visitor may
have viewed, when the customer arrived, on which information he clicked, or what parts of
knowledge database he visited and how many minutes he spent there. Screen views aid in
reaching the tourist effectively by providing him the require information.

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 Theme Paper CRM in Tourism Sector

The tourist’s data is stored in E-CRM repository. E-Call Centre can provide details
about particular destinations discuss flight and resort availability, etc., assist in planning for
the entire trip.

2. SALES AUTOMATION (E-SALES)

The multi-media catalogs, a feature of E-Sales provide a clear view of various tourist
attractions, hotels, etc., which aid in attracting the tourist. E-Sales can provide a way to find
tourism products based of customer’s questions. E-Sales help to sell collaboratively across
geographic, time zones, currencies, and scales to meet the needs of even the largest global
deployments. Sharing of information across different units is made easy thus providing
superior service and support.

3. SERVICE AUTOMATION (E-SERVICE)

E-Service enables the tourist to create and track down their own service requests and to
search fro answers for FAQ. User profiles allow to anticipate customer support needs and
prepare answers automatically. Customers do not have to wait to talk to service
representatives. The result is increased the customer satisfaction.

4. MARKETING AUTOMATION (E-Marketing)

E-Marketing is an intuitive and easy-to-use format enabling to quickly view, analyze and
present information vital to tourism business needs. E-Marketing monitors tourists
interactions, improves the service performance, enhances the productivity of tourism
programs. By integrating the customer information from multiple sources, the tourism
department can identify and capitalize in greater revenue.

BETTER-QUALIFIED PROSPECTS, MORE REVENUE TO INDIAN TOURISM:

E-CRM manages the entire lifecycle of tourism opportunity, from the time it first appears as
an inquiry to its conclusion as a tourist to India. It is easy to capture critical prospect,
customer information. E-CRM helps to focus on right opportunities with the most current
information available at fingertips. The Department of Tourism can determine where and
how best to search for more business. E-CRM makes it easy to be responsive and proactive

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in communicating with prospects and customers through e-mail, fax messages, literature to
customers directly.

Implementing E-CRM on a national and regional basis is a matter of the economic policy and
will support the local economy regarding employment and national/ local contribution and
monetary impact to the GDP.

In addition, E-CRM is fundamental in the development of a destination’s image or brand,

which is important for differentiating the destination from others and key to consumer
decisions on choosing their tourist destination. Establishment of E-CRM tool support the
building of a brand for the region and are able to generate additional values for travellers and
the local tourism industry. Last but not least these comprehensive efforts will create
synergies at the operational side.

CONCLUSION

The more educated customer in today's Internet world is bringing about a change within the
industry structure demanding for high service and support; Tourism sector is currently facing
the same challenge. At this juncture, customer relationship management is emerging as a
new area of focus for firms worldwide. Accessibility to proper sources of information is a
valuable asset for any tourist. Among the varied sources of procuring such information,
Internet plays a major role in today's world. Department of Tourism, Government of India,
by implementing E-CRM would accelerate means off mechanism for bringing all the
potential tourists to make a rapid stride in a big way E-CRM would bring in all the benefits
associated to the Indian tourism sector. Implementing E-CRM by the department can have a
additional advantage for a simple reason that the information offered by the Government
Departments of any nation is more authenticated. Also, the department's interest is the
benefit of the tourism of the nation as a whole. Implementation of E-CRM by the
Government of India is a holistic approach. Such, in initiative will bring about goodwill to
the nation, turning the tourist into a prospective sales agent and a quantum leap in tourism
sector thus earning a huge foreign exchange. Further, the call centers, marketing, sales
department can provide gainful employment to many.

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CASE

The first case in this section is on the CRM practices adopted by Walt Disney, one
of the largest media and entertainment corporations in the world. The case traces
the evolution and growth of the company from the humble beginnings it made as a
cartoon studio. The success of the company is attributed to its strength in its
resources, experience in the business and its low-cost strategies. However, of late
the company faced hiccups in terms of falling attendance and sagging profits. With
an objective to overcome such problems, Disney formulated several CRM
strategies. For instance, "Destination Disney" was the new strategy adopted by the
company in an attempt to drive growth at the parks and thrill the customers/visitors
with a unique experience. Disney also created a website, Magical Gatherings to
facilitate group bookings by those who stay far away from each other. The company
ensured that the customers carried their mobile phones so that they can be informed
about the arrival of certain characters, beginning of fireworks etc. The creation of a
Mickey Mouse look-alike, Pal Mickey, which is a 10.5-inch tall stuffed toy,
equipped with a powerful infrared sensor placed in its nose was another innovative
CRM idea. The doll acts as a tour guide and provides information on various
events. The author concludes by saying that Disney has forever altered the concept
of entertainment with a plethora of customer-centric initiatives.

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Theme Paper CRM in Tourism Sector

REFERENCE

Books:
• The CRM Hand Book – Jill Dyche
• Customer Relationship Management – Kristin Anderson &
Carol Kert
CRM – An Indian Perspective – Mukesh Chaturvedi & Abhinav Chaturvedi
CRM – A Step – by – Step Approach – H Peeru Mohamed & A. Sagadevan

Websites:
http://www.wikipedia.com
http://www.crm-application.blogspot.com
http://www.crmcommunity.com
http://www.ecrmguide.com

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