It's never been more important for today’s hotel organizations to be on top of every lead, every opportunity, and every customer interaction. An effective customer relationship management (CRM) philosophy and discipline can go a long way in achieving this, while enabling your company to establish and maintain a relationship with each and every customer.

The first step towards an effective CRM practice is to clearly define your company’s business objectives and requirements, as well as the desired functionality of your CRM system. Start by obtaining a list of the needs and wants from everyone within your organization who will “touch” the CRM system. This includes operations, sales, marketing, accounting, service and IT organizations, as well as members of the executive management team. I can’t stress enough that the likelihood of your CRM project failing is very high if you do not involve your key stakeholders early enough in the process.

Your requirements list should include the following:

1. Vendor Requirements
2. Functional Requirements
3. Usage Scenarios/Work Flow
4. Technical Requirements
5. Integration Requirements
6. Cost and Budget Requirements
7. Implementation Requirements
8. Training and Support Requirements

Second, you should identify measurable goals such as return on investment and desired productivity improvement. The benefits that can be achieved with a CRM solution are clear – enhanced productivity, reduced costs, increased revenues, along with improved customer acquisition, service, satisfaction, and retention. Yet, for many small and mid-sized hospitality organizations, the large initial investment needed, combined with the long, expensive implementations required, make most on-site licensed CRM packages too cost prohibitive. Additionally, few companies can devote their limited IT resources to installing and configuring hardware and software, testing the application, and supporting ongoing maintenance and upgrades.

Hosted CRM, also known as on-demand CRM, provides a simpler, faster, and more affordable way for businesses to take advantage of powerful technology tools that streamline and automate the way customer interactions are managed across touch points. With on-demand CRM, all hardware and software components are purchased, installed, tested, and maintained by a third-party hosting provider at a remote site. The hosting service provider also stores and manages all customer-related data. Companies need nothing more than a standard Web browser to access and utilize the CRM application and its features.

On-demand CRM makes the process of customer relationship management easier and more cost effective for businesses with IT and budget constraints. It provides all the standard functionality of licensed CRM solutions, as well as the security, reliability, and performance companies need to ensure smooth customer operations, without the time and expense associated with in-house systems.

Most on-demand CRM solutions employ a pay-as-you-go pricing model that eliminates upfront costs or initial fees. You pay only for the services you use, making this approach ideal if you want to avoid wasting money on unused licenses or advanced features and capabilities you simply don’t need. With on-demand CRM, financial impact is minimized and ROI is dramatically accelerated.

Additionally, there is no software or hardware required with on-demand CRM. So, there are no complex, labor-intensive implementations and no ongoing maintenance and support. Time-to-deployment is shortened, and your application will be up-and-running quickly. And, because little burden will be placed on your IT department, your technical staff will be free to devote more time to other important projects. And, on-demand CRM can minimize your training requirements. Because the application and its functions are accessed via an intuitive Web interface, ease-of-use is enhanced, and your staff can work in an environment they are already familiar with.

Opting for an on-demand CRM solution instead of a licensed on-site one means that you will have to relinquish a certain amount of control over your data. Therefore, when choosing a provider to host your CRM application, the integrity of your mission-critical, confidential customer data is of the utmost importance. You don’t want to lose this vital information, or have it fall into the hands of your competitors. Your hosted CRM provider must have stringent measures in place to protect your data from security breaches. Additionally, they must have procedures to prevent loss of vital data and ensure uptime and information availability during outages and system failures.

Today, on-demand CRM solutions provide all the standard features of in-house licensed customer relationship management packages, including components and modules for sales force, marketing, customer service, and help desk automation. Many applications available through hosting service providers also include comprehensive business intelligence capabilities for forecasting, reporting, and trend analysis.

Implementing and maintaining a comprehensive, effective, and affordable CRM solution for your hospitality organization is easier than you might think.