By-Amrish Sahgal

What Is CRM?

CRM is an important business strategy, often utilising a set of discrete software tools and technologies, with the goal of reducing costs, increasing revenue, identifying new opportunities and channels for expansion, and improving customer value, satisfaction, profitability, and retention.

CRM implies taking a very customer-centric view of the entire customer life cycle, which means that a CRM business strategy places the customer at the centre of the organisation’s universe. In today’s world it focuses on automating and improving the institutional processes associated with managing customer relationships in the areas of recruitment, marketing, communication management, service, and support.

What is a Service Industry?

Service industries universally claim to be customer-focused, and no one denies the importance of the customer relationships. Services by their very nature, offer unique CRM opportunities to get to know and retain the customer. Quality service delivery needs a commitment to a marketing orientation and it is most effective when customised to the product and the customer.

Universally, three elements are identified as being the nature of a service.

  • Inseparability. As a rule, the purchase of a service is inseparable from its consumption. It follows that the sales force is in a particularly crucial position – they are very nearly the product itself. The customer’s perception of the sale is largely his perception of the product, and this perception needs to be addressed.
  • Intangibility. Because services are intangible, they are particularly hard to define. It’s a truism of goods marketing that the product is more than the object, but in the case of services there is hardly any tangible good as an objective referent. The marketer needs to probe more to identify what need is met for the individual customer. An intangible product is more subjective than a good.
  • Nonstandardisation. The same salesperson selling to the same customer doesn’t mean that it is the same service. A service is never the same twice. Isolating the variables that define these differences is one of the first steps in CRM input.

Expectations, and Word-of-Mouth

In the service industries, perceptions of quality are subject to a very high level of subjectivity. The perception of quality is more dependent on customer expectations than in the marketing of goods. Interestingly, lower expectations can make for greater satisfaction. What are the individual customer’s expectations? What parameters can be defined to measure these for the specific product?

As with expectations, word-of-mouth is of special importance in the journey toward a services purchase. It follows that social networking websites demand more of the marketer’s attention. However, the real-world community is a more important player in this market.

Products, Goods, and Predicting Customer Behaviour

Of course, a product is a bundle of goods and services. The more pure the service, the more true these tenets are. What’s more, the principles are relevant to the service element of any product.

The CRM practitioner’s response to these product qualities lies, first, in the nature of the feedback solicited. The marketer needs to define the questions the customer answers. Secondly, the manner of soliciting feedback offers unique opportunities in services. The marketer is very much closer to the customer than in product transactions.

Moreover, there are better ways to predict customer behaviour than asking the consumer himself. Qualitative research is particularly important for services. Observation has to be done to probe the purchase transaction and identify the issues that precipitate and characterise that transaction.

Customer lifetime value, a key metric of CRM, depends on customer retention. Loyalty is particularly dependent on the sales/customer relationship in the services transactions. The characteristics of the sales force are the characteristics of the product, and these characteristics need to be defined as factors in the CRM input. The sales force is both the subject and the observer in the services transaction.

A customer relationship management practitioner cannot limit himself to the paradigms of product marketing. He must note the particular opportunities that his service affords and design the CRM system accordingly.

Let us now examine the relationship of CRM with two selected services.

CRM In The Hospitality Industry

Major hotel chains have been wooing travellers for years with CRM tools focused mainly on “loyalty” or rewards programmes. The CRM programmes help hotels and resorts determine which customers patronise the same hospitality brand on a regular basis. Those frequent customers accumulate points that can be exchanged for a reward – usually discounts on extended stays or future bookings. There is, however, a growing awareness that such programmes may not be as valuable either to the hotel, or to the customer, as once thought.

The hospitality industry is encountering growing globalisation. Successfully building brand loyalty and maintaining long-term relationships with customers is, therefore, imperative to attract, retain and satisfy customers in the face of ever growing competition.

The hospitality industry is highly interactive and engaging – where customer-centricity literally forms the core of business relationships. It is mandatory that at any given time, an all round view of customers is maintained. Hotel industries worldwide are therefore constantly on the look-out for the most rewarding ways not only to meet but exceed customer expectations with every consequent experience. Cost effective, tenable, and of course customer centric plans and strategies are an absolute must to stay afloat in this industry’s highly competitive environment.

For the hotel industry, success and profitability are dictated by the ability to continually acquire, retain, service and satisfy their customers, and ensure that customers remain customers for life. Profitability here does not just mean tangible outcomes like ROI and revenues, but the intangible success factors like goodwill and reputation as well. The biggest advantage that hotels gain by effectively applying an effective CRM solution is the systematic tracking of varied customer activities ranging from enquiries, bookings, staying experiences, reviews and other feedback, which indicate their preferences and contentment levels. Consolidated, purposeful, flexible and versatile customer information repositories brought forth by CRM software are instrumental in service optimisation and progressive growth of the hotel industry. 
Some ways in which CRM solutions enable hotels to offer top-notch customer experiences and gain a strong competitive advantage are

1. Central Customer Data Bank
CRM systems allow systematic collection and categorisation of fragmented customer information, as a result of which, rich customer data banks are created. Further, as CRM systems enable relevant customer segmentation, databases for potential customers can also be effectively managed.

Example: Reservation Desk staff can view bookings for a single guest across hotel locations and ensure their preferences are known to other employees. Guest registration data like Passport numbers, permanent address, etc once captured, need not be filled in repeatedly by the guest

2. Customer information scrutiny
In the Hotel Industry, massive volumes of customer information are churned out on an everyday basis. Even though the collection, storage and management of such information in a central data bank is very important, real value is actually generated when such information is correctly mined and analysed to obtain an in-depth understanding about the factors that drive customers’ purchase and accommodation preferences and decisions. Structured data analysis translates to fruitful, profitable relationships, thereby elevating conversion rates and turning one-time guests into customers for life. In addition, making comparisons between the behavioural patterns of ‘transactional’ and ‘potential’ customers, and those customers who leave, aids hotels in formulating or redesigning sustainable loyalty strategies.

3. Consolidated customer view
A productive CRM solution assists in capturing each customer interaction, transaction and experience with all the relevant, necessary, big and small details. Real-time customer information from multiple systems across geographies can be collated on a single window. This huge store of customer information can be viewed and updated from time to time by effectively integrating with external systems.
A holistic customer view furnishes hotels with better and more opportunities to up-sell, cross-sell and build overall rapport.

4. The Right Focus
The most valuable customer interactions are brought to light by CRM solutions and this information can then be replicated towards potential customers that hotels wish to either target and / or retain. In effect, hotels can reinvigorate / redesign those areas which adversely affect profits, and sharpen focus and attention on the most rewarding ones.

5. Combating Competition
Superlative and consistent service quality levels along with innovation is what is imperative for hotels if they are to battle competition. To keep customers engaged, it is vital for hotels to offer a plethora of choices that provide greater value along with highest levels of customer satisfaction. Gaining a competitive advantage by providing appealing offers, discounts and packages at all times is important. Hotels must be capable of distinguishing themselves from competition by building a unique identity and generating higher brand loyalty. Reference to ‘customers’ experiences’ is instrumental in achieving these.CRM led initiatives can be used to achieve these objectives.

6. Raising efficiencies, keeping customers updated
Computerised CRM systems are known for their immediate benefits of bringing about automation and eliminating non-core tasks. Automation helps in faster, better, and wiser sales, marketing, promotion and advertising decisions and actions. CRM systems enable the creation of mail blasters, text message campaigns etc., through which, customers can regularly be updated about happenings, events, special offers and packages in a focused, targeted manner. Reviews and feedback can also be invited.

7. Leveraging social platforms to promote brand presence
Hotels’ sales and marketing teams can leverage social CRM solutions to create mobile, web and social media campaigns, which in turn can be continually bettered and upgraded with ongoing, useful customer feedback. Monitoring customer activities and analysing customer feedback/reviews about the company and brand on various social networks is made possible by social CRM. It also ensures that hotels are well equipped to enhance customer experiences by always paying close attention to customers and resolving their queries and/or grievances at the earliest. Prompt follow-up of new leads is also enabled thanks to social CRM. As a consequence, conversion rates are elevated and brand advocacy is boosted.

8. Fostering loyalty

 A high degree of personalisation is introduced in customer interactions, this build relationships and thereby empowers hotels to achieve success in customer retention and loyalty. 

 9. Formulating futuristics strategis- Software based CRM solutions collate responses, reviews and overall feedback that customers publish online about their collective hotel experiences. These details are analysed, following which reports are generated and real time customer activity information is reported to the management. These actionable insights can be used to enhance future products, services, packages, offers and overall communication. Future marketing strategies can be optimised, and new and better campaigns can be designed and consequently published on tightly focused media platforms.

10.Other Aspects

 Customer Relationship Management is extremely critical in the hotelSuperior amenities and facilities are no longer luxuries, but, have rather become common expectations among hotel’ clientele. Regular correspondence, email/ SMS campaigns, query responses, etc. There is need to be consistent and personalised.

It also helps streamline customer data to understand customers’ needs, preferences, behaviour, and satisfactorily address their complaints. Every single customer related issue can be monitored and tracked using an efficacious CRM system, and as a result, customer experiences can be redefined even by international hotel chains.

CRM in Higher Education

The work of higher education should be focused on the people it serves, not on its administrative systems.

Educational institutions worldwide are undergoing fundamental shifts in how they operate and interact with their “customers”: students, parents, alumni, donors, faculty members, and staff members.

During the mid-1980s and the late 1990s, many colleges and universities began restructuring and reengineering their operating processes to cut costs and become more efficient while responding to increased competition. This helped them automate and optimise their internal business processes – in areas such as finance, management of scholarships, student information, enrolment, inventory management, and human resources – and freed them from some of the intensive labour required for day-to-day operations.

The focus is now shifting from improving internal operations to concentrating more on customers. Higher education customers are demanding more attention and immediate service. Proactive institutions are now adjusting their practices by refocusing their efforts externally. Because of the need to concentrate more on customers, many institutions are turning to customer relationship management. CRM solutions focus on automating and improving processes, although the focus is on front office areas, such as recruiting, marketing, customer service, and support.

From the perspective of the customer, a CRM business strategy allows interaction with the college or university from a single entity that has a complete understanding of their unique status. In the case of a student, this might be seen through the interaction with and between the admissions, registration, financial aid / scholarships, student accounts, and hostel / housing offices. For a faculty or staff member, a CRM business strategy would optimise interaction with departments administering benefits, payroll, staff training, information technology (IT), or facilities. From the perspective of the college or university, the CRM business strategy provides a clear and complete picture of each individual and all the activities pertaining to the individual.

The Impact of CRM on the Higher Education Enterprise

Emerging CRM processes and technologies will drive the growth of new types of resources and services. Within the higher education enterprise, much of this new functionality will be focused in

the student area. This exciting new level of student-related functionality and performance will have an impact on students as well as on the administrative staff and management, the faculty, and the

institution as a whole. Let us look more closely at each of the areas affected:


Today’s systems have little to offer students, particularly the new breed of technology-savvy students who want to be more in control of their learning environment. Today’s students demand a higher level of access to information about their options, their performance, and their future. They also demand that technology resources be an integral part of their learning experience. The standard for access to faculty and student services will change as students come to expect virtual access to faculty and student services resources. The old ways of interacting with students will become untenable with virtual support systems.


By shifting responsibility for information maintenance to students and faculty members, and empowering them to complete relevant processes and securely access vital information, the administrative staff can focus on more productive, rewarding, and satisfying activities – such as making personal connections with students and helping them plan for the future.

Faculty Members

In many institutions, there is a complete disconnect between student services and instructional programmes. This disconnect is often mirrored in the rift between administrative and academic computing. In the new learning environment, faculty and student services would be closely linked, dynamically sharing resources and strategies to enable better student learning. With a system that is dynamically linked with students, faculty curriculum planners can develop an accurate picture of which technology resources truly make a difference in student learning.

The Institution

CRM delivers a new conceptual and structural framework for directing institutional activities to attract and retain its various customers. All customers of the institution can benefit from increased access to information and services.

  • • Students, alumni, faculty members, and staff members can access and update information from any Web enabled device, anywhere in the world.
  • • The needs of the customer base become the focus rather than the rigid process structure that is the focus of today’s systems.
  • • Administrative systems are seamlessly integrated with instructional computing and communications systems.

Most important is the ability of a truly robust set of institutional processes and tools to bring the entire institution together around its people.


We have looked at just two industries. Other service industries like finance, banking, travel agencies, cruise lines, hospitals, et al, would also benefit enormously from adopting modern CRM systems.

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