What is CRM? A business philosophy? A technology system? Before we answer that question, we must always remember that CRM was invented with the customer in mind. That’s why the #1 of rule of successful CRM practices is that “it’s all about the customer”. You should also keep in mind that the two primary goals of everyone’s CRM philosophy should be to (1) build marketing infrastructure, and (2) grow incremental revenue.

That being said, I’m often surprised when I visit with prospects interested in implementing or improving their CRM that they seem to think that the “M” in CRM is for marketing. And while an effective CRM solution greatly enhances your marketing abilities, CRM is fundamentally a Management tool where the customer (not the reservation) becomes the center of attention. An effective CRM solution allows you to have a 1:1 relationship with each customer by collecting data from different sources to further understand their value as well as, and just as important, their behavior. Not only should a CRM measure “how often?” and “how much?”, but it should also measure “when?”. It should possess the ability to analyze a customer’s stay patterns (which allows you to reward them differently or upsell them), and also identify a sudden increase in stays (allowing you to capitalize) or a decrease in stays (allowing you the opportunity to bring them back). This 1:1 relationship also facilitates your ability to more effectively market to your customers by only sending them relevant information and offers. This practice also serves your customer better by delivering an enhanced experience on property, since you already know their likes, dislikes, and preferences.

It’s also vitally important that your CRM collects data from all points of contact. It shouldn’t be limited to a single source, for example only your property management system. Your CRM should connect, or even ultimately “power” relevant modules of your property management system, point-of-sale, central reservation system, Internet booking engine, sales and catering system, and any other system that contains guest data. This allows you to gain a complete 360° view of your customer, from all of your information management systems. More importantly, your operations must access and use that data at all points of contact – front desk, reservations office, accounting, sales office, housekeeping, restaurants, activity desks, etc. This is only achieved when your CRM acts as the central database for all customer information and relations.

Today’s technological advancements allows your CRM to not only to connect with on property and company wide enterprise systems, but also to today’s popular social sites such as LinkedIn, TripIt, TripAdvisor, Flickr, Twitter, Facebook, and others. Typically, your customers will share more information about themselves on these sites than directly with you. But when your CRM communicates with these sites, the end result is a more informed CRM with more “public” customer information. If your organization is not participating on today’s social websites, you are missing a tremendous opportunity to reach your customer. Today’s successful hospitality organizations are manifesting ways to create new points of customer contact in addition to an enhanced customer experience on their own website. Does your website allow your customer to update their information (address, phone number, email address, likes/dislikes, preferences, etc.), or view their loyalty point balance? Perhaps the ability to review how many times they have stayed at your hotels, or dined at your restaurants and print a copy of their past folios or tickets? This is another key element of establishing and maintaining a 1:1 customer relationship.

As your organization’s central customer database, e-mail marketing can be taken to new levels. Your CRM can track, monitor and evaluate the effectiveness of e-mail campaigns, record the number of mailings sent to each customer, the number of times the customer opened the email, and if they “clicked-thru” to gain additional information. Your CRM can also record and manage customers that have elected to “opt-out” of future communications. As a discipline, email marketing is all about connecting with your customers and generating new customers. Every campaign should reflect these objectives. In addition, by knowing your customer’s preferences, it allows you to make your products more relevant to what the customer wants to consume.

Guest Surveys can also be effective when distributed electronically. Studies have shown that the customer is more “comfortable” and “honest” when they are able to share their comments directly to management, instead of hand written guest comment cards. Many organizations are also encouraging their guests to share their stay experience with sites like TripAdvisor. Some have gone as far as to use TripAdvisor as their guest comment “system”. Another advantage to Online Surveys, is that is allows you to easily consolidate all responses to summarize trends and overall performance, and link the comment to the customer’s record in the CRM. Not only does Online Surveys allow you to make informed business decisions, it is also beneficial when reacting to previous guest stays (both positive and negative), and preparing for future stays.

In summary, CRM is only as effective as the practices that it is based on. It’s all about people, but CRM technology is there to help!

Next week I will discuss CRM Technology for Travel: How Can I Best Engage This Technology to Grow My Business? See you then…