Customer Relationship Management And Patronage In Service Industry (A Study Of Hotel)
- BACKGROUNDOF THE STUDY
The basic reason for an organization’s existence is to satisfy the needs of the customers and through that may way for repeat patronage which will open the avenue for increased profit making. One of the factors affecting the performance of an organization is customer relationship management, which is the main focus of study.
Customer Relationship Management concerns the relationship between the organization and its customers and asserted customers are the life-blood of any organization be it a global corporation with thousands of employees and a multi-billion turnover, or a sole trader with a handful of regular customers Beks, (2008). Customer Relationship Management is the same in principle for these two examples – it is the scope of CRM which can vary drastically.
The organization and the customers both have sets of conditions to consider when building the relationship, such as wants and needs of both parties; organizations need to make a profit to survive and grow customers want good service, a quality product and an acceptable price.
Thompson (2008) illustrated that customer relationship management is an effective tool for achieving positive organizational performance and which reflects an increase in profit, goodwill, better product and service delivery. In recent times, questions have been raised as regards the interactions between organizations and their customers. But the result is that many organizations have poor relationship with their customers and this will lead to loss of goodwill and low profit earning in the organization.
Customer relationship management looks at the whole process of what an organization is involved in, whether it is a product or a service driven organization and it must involve every aspect of what they do – from suppliers through to the end application, from their internal staff through to their customer’s customer Kim Jenner, (2008).
The ultimate purpose of CRM, like any organizational initiative, is to increase profit. In the case of CRM this is achieved mainly by providing a better service to customers than competitors do. CRM does not only improve the service to customers, a good CRM capability will also reduce costs, wastage, and complaints. CRM also reduces staff stress, because attrition – a major cause of stress – reduces as services and relationships improve. CRM enables instant market research as well: opening the lines of communications with your customers gives you direct constant market reaction to your products, services and performance, far better than any market survey. Good CRM also helps you grow your business: customers stay with you longer; customer churn rates reduce while referrals to new customers increase from the increasing numbers of satisfied customers; demand reduces on fire-fighting and trouble-shooting staff, the organization’s service flows and the teams work more efficiently and more happily.
Customer satisfaction is a vital CRM variable that must not evade our empirical scrutiny. Indeed, customer satisfaction is central to successful application of the marketing concept. Many company mission statements and marketing plans are designed around the goal of increasing customer satisfaction. (Claudia, et al 2001)
The concept of relationship is very complex because it relates to different disciplines but with regards to the topic at hand, relationship or business relationship can be viewed or described as being distinct from, but related to, concepts such as Enterprise relationship management, consumer behavior and customer relationship management
Customer relationship management seeks to provide a complete and holistic model of business relationships and business relationship value over time, in order to make the various aspects of business relationships both explicit and measurable (Parvatiyar et al 2000).
A mature CRM model will ultimately support both:
- Strategic business research and development efforts,
- Tools and techniques that implement CRM principles.
As a result of the effectiveness and intensity of the concept of CRM, customers would benefit from it through experiencing enhanced product delivery and organizations themselves would gain from it through increase in customer database, increase in performance and profitability