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MODELS OF CRM IN TOURISM

The concept of Customer Relationship Management (CRM) has generated much interest among
academics and practitioners. CRM is conceptualized as a process, a strategy, a philosophy, or a
technological tool.

CRM demands an integration of marketing, sales and service activities to establish a consistent and
versatile interface to the customer (Meyer and Kolbe, 2005).CRM entails building in-depth knowledge on
customer needs, motivations and behavior and applying customer knowledge to improve process
performance (Shaw and Reed, 1999).

Market conditions deemed most apposite (considered most well chosen) for the adoption of CRM
strategies include situations where the customer controls the selection of service providers and where
alternative choices exist, where brand switching is a common phenomenon and where word-of-mouth is a
particular powerful means of communication (Gilbert et al., 1999).From the customers perspective a
long-term relationship with tourism destination may be beneficial to reduce the financial and emotional
risk (Gassner et al., 2004). These conditions hold true for tourism destinations. But there is a lack of a
holistic view of the processes connected to the strategic vision of CRM.

However there are three important methods for building customer loyalty and increasing revenues per
customer, whether they contact via the telephone, Internet or through personal visit. These
three methods are:

1. Creating a Single View of the Customer, All Their Transactions and Lifetime Value
2. Delivering Consistent Business Processes Across All Media, and
3. Integrating Multi-channel Customer Interactions to Build a Learning Relationship

The importance of owning the customer relationship becomes apparent when one considers the
competitive pressures being applied to all portions of the travel industry and despite the growth of the
total market, the increasing pressures on profitability being created by new players in the market.
One of the U.S.airline, last year lost 15% of its most profitable business travellers, found that 72% of
those travellers switched to other carriers because of poor customer service. And the trend is growing.
The most recent US Department of Transportation survey of travellers shows that the number of
complaints filed by passengers against airlines increased 75% over last year.

In the travel industry more than anywhere else, if you keep your customers waiting, you won’t keep your
customers.
Creating a Single View of the Customer

A company needs to develop the concept of a “single view of the customer”. What does this mean? It
means that regardless of the time or method of communication, agents, no matter where they are located,
should be able to instantly recognize and serve any customer who may need assistance. It means they can
quickly comprehend the value of the customer and they can see the complete history of this customer’s
interactions and the status of any pending actions.
It also means that no matter how the customer chooses to communicate, whether over the phone, via the
Internet, e-mail, and fax or in person, agents need to be able to see the same view of the customer and the
total lifetime relationship you have with him/her. (meaning to say all the necessary information should be
accessible to the agent to serve the customer in a better way.)
How can this happen? It requires three essential elements:
1. Data needs to be accessible across the organisation, including purchase history, loyalty program
databases and customer service files.
2. The managers in an organisation need to create a consumer data model that is unique to their business,
which supports the business model, too.
3. The delivery of a consistent customer experience to every touch-point encountered by the customer.

Creating a consumer data model is not only helpful in creating a single customer view, it is also critical to
the success of the business as it will help separate the business value from the competitors’. By
incorporating best customer practices and unique business rules into the customer-handling an
organization can stand apart from the competition during every customer contact.
Finally, delivering the integrated consumer data model to every customer touch-point requires an
application that can be delivered instantaneously over a variety of protocols and has the scalability to
provide for rapid response times, even when hundreds or thousands of users are simultaneously accessing
the application.
An example of this unique customer view can be found in a case study of Thomas Cook Global
Services. When travelers call into the Thomas Cook Global Services Center in Peterborough
England, they are immediately identified by several data components captured from the telephony
switch. These elements include the inbound dialed telephone number, the account number entered
into the VRU (Voice Response Unit) and the number of the exchange from which they are calling.
This immediate identification and pro-active approach has allowed Thomas Cook Global Services
to offer personalized traveller assistance to the preferred customers of more than 20 different travel
services organisations around the world.
These elements combine to form a data model that allows the agent to:
1. Answer the caller in their native language.
2. Answer the caller with the appropriate service company name, and
3. Answer the caller’s immediate request for service using a localized database of suppliers.
Delivering Consistent Business Processes Across All Media

The second area of concentration in “owning the customer relationship” is building the
infrastructure and applications that enable the right process to be delivered via any communications
media that the customer chooses to use. This includes agent-assisted calls as well as self-help media such
as the Internet or Voice Response Units. The software application that presents the customer request to
the agent or directly via the Internet must be able to bring the entire customer profile to light, including
the customer’s travel itinerary; preferred booking status as well as any offer that is relevant for this
customer at the time of contact. In addition, the application should guide the agent or the customer
through the entire process, at the same time delivering the best customer practices and most relevant
offers for that particular customer.

The process that is delivered to the agent desktop, or to the customer directly via a self-service interface
needs to incorporate data variables and workflow processes that come from the customer’s unique profile.
Only a fully integrated CRM application set can bring together the customer profile, the customer’s
requested process and the business policies of a company at the precise time of the interaction.

The beauty of a custom-designed workflow-based CRM solution is that it can be programmed with a
particular business model in mind, surfacing from the unique selling proposition during every interaction.
Historically, finding the right mix of custom-developed features coupled with an affordable price tag and
reasonable implementation schedule has been difficult. With true object-oriented design and a powerful
workflow engine already in place in the form of a call center, or a kiosk check-in at the airport etc.
Airline Check-in Example

An airline passenger may check-in through one of several different contact media – telephone,
web-site, or face-to-face at the ticket counter. Whichever channel is selected, the process will be
identical, based on the customer profile, the business policy and the process requested. The
passenger presents the necessary information to the system through the VRU, web-forms or
directly to the agent in order to retrieve the reservation from the departure control system.
Information from the customer service system and the loyalty program database can be accessed at
the same time, bringing a complete customer profile to the agent’s screen. Business intelligence
tools and data mining have categorized the passenger as a customer with a high potential lifetime
value. This factor can be shown in a simple bar chart along with other customer mood factors, such
as the "time-in-queue" or a summary of the last five interactions. In addition, the customer service
system shows that this passenger recently completed a long-haul segment in a seat with a broken in-
flight entertainment unit. All of these data variables are considered in constructing the process and
offer that will be presented to this particular customer.
At the time of this interaction, the work-flow process recognizes the value of this customer and the
recent inconveniences he has experienced and presents a free first-class upgrade offer to this
passenger. Whether the passenger responds with his acceptance or declines this offer, CRM systems
automatically updates the departure control system and logs the interaction into the case history
for this customer. Future interaction processes will now be able to see and consider the customer’s
response to this offer.

Integrating Multi-channel Customer Interactions to Create Consistency and Continuity

CRM application needs to maintain media independence, enabling e-mail, fax and phone
interactions with equal ease. The same business activities and processes need to be executed regardless of
the communications media. This is possible only when the business activities that drive the system do not
specify how requests are made or how information is to be gathered. They only specify what is needed the
way of a customer request. So a customer who makes a request via e-mail or a Web page will get the
same level of service and the same consistent response as if he had made a telephone-based request of an
agent.

Thus in the present day scenario CRM systems are developed, with object-oriented architecture that
allows for support of multi-channel customer interactions through, telephony, e-mail, fax, Internet and
branch office activities. In each case the process presented to the agent or customer is determined not by
the choice of media, but by the process being requested by the customer, the enterprise’s best customer
practices and the customer’s profile.

In the above diagrammatic representation one can see the specific separation of the business logic from
the infrastructure layer and the presentation layer. All of these connections and processes come together
in real-time at the presentation layer of the specific applications whether these applications are delivered
to the travel agent’s desktop, the VRU in the call center, the ticket counter terminal or the ticketing kiosk
at the airport.
Building a Learning Relationship with Your Customers

Once an agent has interacted with the customer, he or she can now focus on owning
that customer for life through the process of building a learning relationship. When an agent has a
cooperative learning relationship with the customers, all the barriers are defaced with every contact. Each
time they interact with the agent, the process becomes simpler, easier and more convenient. If a consumer
wants to change vendors, he must re-teach them all that an agent have learned about the way in which he
wants to do business. If any agent does not invest the time to learn anything about his behaviors,
preferences or choices, and fed these factors back to him in an automated fashion, then he can defect to
another carrier without much pain. In short, learning relationships should make it easier for him to do
business with you than anyone else.

As Don Peppers, of Marketing One-to-One has said, “Give your customer the chance to teach you
what he wants. Remember it, give it back to him, and keep his business forever.”

Every customer wants his or her interaction history to be remembered. Just knowing who he or she is
what their preferences might be and how they want to be contacted gives a solid start. British Airways has
learned this lesson quite well. On every flight, repeat Upper Class passengers are treated to their favorite
beverages, reading materials and menu, without the attendant having to ask the questions. They have
accomplished this by installing a portable PC on every aircraft and noting every new customer’s name
and preferences in that terminal. When the aircraft lands the terminal is downloaded to the network and
the next time that traveller books an Upper Class reservation on a BA flight, the first class cabin is
stocked with the appropriate amenities, marked for his or her seat location.

“Give your customer the chance to teach you what he wants. Remember it, give it back to him and keep
his business forever"
Don Peppers,
Marketing One-to-One