SYMBIOSIS INSTITUTE OF BUSINESS MANAGEMENT, BENGALURU

CRM Ritz Carlton

A report on CRM in Hospitality Industry
Allen Alex Aswathy Sreekumar Prashant Soni Rohith Castelino Sunaina Bhatia Amey Jambotkar Lekshmy R Rajni Bhardwaj Shivesh Ranjan Vela Rafiz

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Contents
History of CRM ........................................................................................................................................ 2 Need for CRM in Hospitality Industry ....................................................................................................... 3 Challenges Faced ..................................................................................................................................... 3 Returns on Implementing CRM ................................................................................................................ 4 Ritz-Carlton Introduction ......................................................................................................................... 6 The Gold Standards ............................................................................................................................. 6 Training for CRM: .................................................................................................................................. 13 Benefits from CRM ................................................................................................................................ 14 Future of CRM ....................................................................................................................................... 15 Conclusion............................................................................................................................................. 18

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History of CRM
Customer relationship management is a concept that became very popular during the 1990s. It offered long term changes and benefits to businesses that chose to use it. The reason for this is because it allowed companies to interact with their customers on a whole new level. While CRM is excellent in the long term, those who are looking for short term results may not see much progress. One of the reasons for this is because it was difficult to effectively track customers and their purchases. It is also important to realize that large companies were responsible for processing tremendous amounts of data. This data needed to be updated on a consistent basis. In the last few years, a number of changes have been made to Customer relationship management that has allowed it to advance. These capabilities have allowed CRM to become the system that was once envisioned by those who created it. A number of personalized Internet tools have been introduced to the market, and these have driven down the cost of competition. The foundation for CRM was laid during the 1980s. During this time, it was referred to as being database marketing. The term "database marketing" was used to refer to the procedure of creating customer focus groups that could be used to speak to some of the customers of the company. The clients who were extremely valued were pivotal in communicating with the firm, but the process became quite repetitive, and the information that was collected via surveys did not give the company a great of information. Even though the company could collect data through surveys, they did not have efficient methods of processing and analyzing the information. As time went on, companies begin to realize that all they really needed was basic information. They needed to know what their customer purchased, how much they spent, and what did with the products they purchased. The 1990s saw the introduction of a number of advances in this system. It was during this time that term Customer relationship management was introduced. Unlike previous customer relationship systems, CRM was a dual system. Instead of merely gathering information for the purpose of using for their own benefit, companies started giving back to the customers they served. Many companies would begin giving their customers gifts in the form of discounts, perks, or even money. The companies believed that doing this would allow them to build a sense of loyalty in those who brought their products. Customer relationship management is the system that is responsible for introducing things such as frequent flyer gifts and credit card points. Before CRM, this was rarely done. Customers would simply by from the company, and little was done to maintain their relationship. Before the introduction of CRM, many companies, especially those that were in the Fortune 500 category, didn't feel the need to cater to the company. In the minds of the executives, they have tremendous resources and could replace customers whenever it became necessary. While this may have worked prior to the 1980s, the introduction of the Information Age allowed people to make better decisions about which companies they would buy from, and global competition made it easier for them to switch if they were not happy with the service they were getting. Today, CRM is being used to achieve the best of both worlds. Companies want to maintain strong relationships with their clients while simultaneously increasing their profits. The CRM systems of today could be called "true" CRM systems. They have become the systems that were originally Group 3 Page 2

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envisioned by the pioneers of this paradigm. Software companies have continued to release advanced software programs that can be customized to suit the needs of companies that compete in a variety of different industries. Instead of being static, the information processed within modern CRM systems is dynamic. This is important, because we live in a world that is constantly changing, and an organization that wants to succeed must constantly be ready to adapt to these changes.

Need for CRM in Hospitality Industry

Hotel corporations are late adapters in terms of technology. The overall focus on IT is very little, as hotels are driven by daily operations. Throughout the industry, the percentage of academic education is generally low and General Managers at hotel level usually come from the operational side of business. Customer Relationship Management, particularly on hotel chain level, is very challenging but also very important, as the hospitality industry deals with perishable goods and needs to manage supply and demand with a sure instinct. The lodging industry enjoys easy data access, but lacks data transparency, quality and analysis. Accessibility of data throughout different customer touch-points is limited. Once checked into a hotel, a customer deals with multiple touch-points like the reception, the restaurant or the gift shop. All keep their individual and independent customer records. At corporate level, the data exchange from hotels to headquarters and between hotels is very limited. Reporting is mainly submitted on paper or through time- consuming self-made spreadsheet models. Customer data exchange is basically non-existent. Guest recognition throughout different hotels of one corporation is, if at all, supported through a simple number on the guests loyalty card, provided that the guest enrolled in the hotel groups loyalty program at some point. The industry disposes of an excess of information about their customers. Guests need to register with their name and address during check-in. In some countries, guests even need to provide their passport data and more detailed private information. In addition, people are very likely to share their personal preferences with hotel staff to make their stay more enjoyable. The partial information that is being communicated by the guest to several attendants from one or multiple hotels needs to be brought together and collected in a common place. Frequently, the different departments keep their own local filing systems. For example, a guest stays at Hotel A of Hotel Corporation Top Travel and requests a corner room with a king-size bed on a higher floor. After arriving in his room, the guest calls the front-desk agent that he would like to have the complimentary sparkling water exchanged with nonsparkling water. Wouldnt it be great if the above-mentioned preferences would be prepared before arrival of the guest at Top Travels Hotel B? The information needs to be accessible throughout hotels of the same corporation to benefit the organization and support the recognition of customers throughout all hotels of the corporation.

Challenges Faced
Due to a very specific business handling in the hotel industry, which is usually built around and focused on the PMS system in place, the hospitality industry lags behind when it comes to implementing CRM solutions. There are two main challenges for implementing CRM in the lodging industry: A lack of Group 3 Page 3

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standardization and IT-system integration within each brand or even hotel. This requires heavy focus on interfacing possibilities of the CRM software and the analysis of different processes within each local system. Secondly, there may be up to three parties holding a stake in an individual property: The owner, the local management company and the brand. The difficulty is the financial responsibility of the implementation, data-ownership and availability. Accurate data entry and collection is a huge issue at the operational level. Frequently hotel companies face a data dilemma when investigating the current situation, before starting with data takeover for their new CRM system. It is very important to clean data first and to start with a clean and credible system. Data problems lead to limited value of the data warehouse, in addition to diminishing the value of proposed models. There are two major causes for data inefficiency. Firstly, there is missing or inaccurate data. For example, it is difficult to create a profile of the occupation of customers, if there are only few guest records containing this information. The normal time to get data in a (business) hotel environment is during check-in; however, the guests want to finish this procedure as quickly as possible. Collection of business cards may be a potential solution to this problem. The other major limitation is poorly entered data, which complicates data analysis. Additionally it paints a bad picture of the hotel chain, when direct marketing campaigns are sent to the guests, labeled with incorrect spelling of the name or address. A detailed entry standard needs to be defined regarding formats, text case and redundant codes. Some modern CRM systems have semi-automated cleaning processes included to deal with the large number of guest records in internationally operating hotel chains.

Returns on Implementing CRM

Measuring ROI in the context of CRM can be very subjective, but it will provide a company with the ability to identify which components of CRM improve customer relations. Many of the CRM implementation decision processes span over a long period of time, as the ROI is not easily visible and a substantial upfront investment is necessary. Commonly used CRMs in Hospitality industry: 1. Call centers: These are organizations which deal directly to the customer interactions. These are otherwise known as "Customer Care Centre" or "Contact Centre" indicating more technological sophistication and multichannel support. Call center technologies entered the market place to effectively alleviate some of the repeat work and increase efficiencies, allowing companies to handle escalating call volumes. Customer Service Representatives (CSRs) could look up similar calls and resolutions while a customer was on the phone, without having to repeat research. The software tools being used in the call-centers also provide forecasting of call volumes to ensure adequate call center staffing. 2. Web based self-service: The customers themselves, without the help of alive person can resolve their problems or find out answers to their queries using the web. This model is founded on the principle of enabling customers, partners and employees to obtain informations or conduct transactions directly over the internet, avoiding time-consuming and costly traditional processes Group 3 Page 4

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involving multiple verbal or written interactions. It provides control, performance, convenience and efficiency. Customer satisfaction measurement: Survey mails are the major way for companies to monitor customer satisfaction. Nowadays, these survey forms are even personalized to specific customers or customer groups. Responses are input into customer databases and included as part of individual customer profiles. Such tracking of customer satisfaction overtime enables a company to fine tune how it communicates with its customers according to their preferences. Now, the paper based surveys are giving way to electronic surveys. Call-scripting: Automatic scripts generated for customer service representatives, based on an individual customer's segment and/or customer profile contents. Scripts remove the guess work from determining how to respond to a customer query or complaint, guiding representatives through a dialogue with the customer and thus optimizing discrete customer interactions. Cyber agents: This is a kind of an improved or modified form of the concept of self-service. Cyber agents are 'lifelike representatives normally depicted on a companys web site as a real person. This attempt to pull together the best of both personalization and advanced technology. It is given a personality and is having facial expressions and volume. Usually a cyber-agent addresses the web visitor with his/her first name. It can draw from the wealth of detailed information to answer basic FAQs as well as guide a customer to the appropriate screen for a definite purpose/action. Web site: It is the efficient and effective use of worldwide web for providing information to the customers, by a company who had created that site, in a hassle-free manner. The main advantage of a web site is its 24 hours accessibility. Usually gathering information from the site is a simple task and is cost-effective. In the US and in the developed countries web is extensively used. In the case of monetary transactions, if it is a high involvement activity most of the customers prefer the offline mode mainly due to their concern over security problems in monetary transactions, through the net.

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E-CRM Components in Hotel Industry Sales functionality: Contact management profiles and history, account management including activities, order entry, proposal generation Sales management functionality: pipeline analysis (forecasting, sales cycle analysis, temporary alignment and assignment, roll up and drill down reporting). Telemarketing/Telesales functionality: call list assembly, autodialing, scripting, and order taking. Time management functionality: single user and group calendar/scheduling, e-mail Customer service and support functionality: incident assignment, escalation, tracking/ reporting, problem management/ resolution, order management/ promising, warranty/ contract management Marketing functionality: campaign management, opportunity management, web-based encyclopedia, configuration, market segmentation, lead generations/ enhancement/ tracking. Executive information functionality: extensive and easy-to-use reporting ERP integration functionality: legacy systems, the web, third party external information Data synchronization functionality: mobile synchronization with multiple field devices, enterprise synchronization with multiple databases/application servers E-commerce functionality: manages procurement through EDI link and web-server and Page 5

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includes B2B and B2C applications Service support functionality: Worker orders, dispatching, real time information transfer to field personnel via mobile technologies

Ritz-Carlton Introduction
The Ritz-Carlton Hotel Company, L.L.C. is the parent company to the luxury hotel chain, The RitzCarlton Hotels. Ritz-Carlton operates 81 luxury hotels and resorts in major cities and resorts in 26 countries worldwide. The current company was founded in 1983, when the brand was bought from the previous owners to start The Ritz-Carlton Hotel Company, L.L.C., based in Atlanta, Georgia, which began expansion of the brand to other locations. The hotel company is today a subsidiary of Marriott International. The company grew to become the hospitality leader in the US under the leadership of President and COO Horst Schulze. Schulze instituted a company-wide concentration on both the personal and the data-driven sides of service: He coined the company's well-known customer/employee-centered credo, "We are Ladies and Gentlemen Serving Ladies and Gentlemen" and the set of specific service standards on which The Ritz-Carlton employees base service through the present day. The Ritz-Carlton Hotel Company is now headquartered in Chevy Chase, Maryland, located in the Washington, D.C. MSA.

The Gold Standards

The Gold Standards are the foundation of The Ritz-Carlton Hotel Company, L.L.C. They encompass the values and philosophy by which it operates and includes: 1. 2. 3. 4. 5. 6. The Credo The Motto The Three Steps of Service Service Values The 6th Diamond The Employee Promise

Gold Standards The Gold Standards are the foundation of The Ritz-Carlton Hotel Company, L.L.C. They encompass the values and philosophy by which they operate and include: The Credo Group 3 Page 6 The Credo The Motto The Three Steps of Service Service Values The 6th Diamond The Employee Promise

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The Ritz-Carlton Hotel is a place where the genuine care and comfort of the guests is the highest mission. They pledge to provide the finest personal service and facilities for the guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of the guests. Motto At The Ritz-Carlton Hotel Company, L.L.C., "We are Ladies and Gentlemen serving Ladies and Gentlemen." This motto exemplifies the anticipatory service provided by all staff members. Three Steps of Service 1. A warm and sincere greeting. Use the guest's name. 2. Anticipation and fulfillment of each guest's needs. 3. Fond farewell. Give a warm good-bye and use the guest's name. Service Values: I Am Proud To Be Ritz-Carlton 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Build strong relationships and create Ritz-Carlton guests for life. Always responsive to the expressed and unexpressed wishes and needs of our guests. Empowered to create unique, memorable and personal experiences for our guests. Understand my role in achieving the Key Success Factors, embracing Community Footprints and creating The Ritz-Carlton Mystique. Continuously seek opportunities to innovate and improve The Ritz-Carlton experience. Own and immediately resolve guest problems. Create a work environment of teamwork and lateral service so that the needs of our guests and each other are met. Have the opportunity to continuously learn and grow. Involved in the planning of the work that affects me. Proud of my professional appearance, language and behavior. Protect the privacy and security of our guests, my fellow employees and the company's confidential information and assets. Responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

The 6th Diamond Mystique Emotional Engagement Functional

The Employee Promise At The Ritz-Carlton, Ladies and Gentlemen is the most important resource in our service commitment to our guests. By applying the principles of trust, honesty, respect, integrity and commitment, nurture and maximize talent to the benefit of each individual and the company. The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened. Group 3 Page 7

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6 steps of customer service: 1. The Offer. Before a customer can be engaged, he or she must be attracted to the brand by a compelling offer. The Ritz-Carltons offer is a luxurious experience. As one customer explained, Its a first-class experience. In our full 2010 Most Engaged Customers report, we list six additional types of compelling experiences that can draw customers toward a certain brand. Care. The first step toward customer loyalty is to express care for the customer. Does the company care about my business? Customers ask themselves. Customer Care is the RitzCarltons highest mission, according to the companys Credo. Consistency. A compelling offer and customer care cant guarantee long-term customer engagement and loyalty; for that, a company must achieve consistency. A single word in the Ritz-Carlton Credo, always, promises that Ritz-Carlton employees will deliver a caring, luxurious experience every time. Trust. With the three traits listed above, a company can achieve customer satisfaction. To earn customer loyalty, the company must achieve customer trust. The 2010 Most Engaged Customers study found that trust is like the silver-lining of company errors; every service mistake is really an opportunity to win customer trust by making things right. One Ritz-Carlton customer explained how the hotel won trust: Years ago, I had a problem with a room at the hotel in Cancun. I was given 2 free nights to make up for it. Clearly, Ritz-Carlton employees follow through on the Credos pledge to fulfill even the unexpressed wishes and needs of customers. Effort. The final two ingredients in Customer Engagement are challenging to achieve, but absolutely crucial in attaining Customer Engagement. Extraordinary employee effort is one step toward Customer Engagement. Employees who go above and beyond their duties show the kind of effort that engages customers. This is where Employee Engagement contributes to Customer Engagement. Ritz-Carlton employees put extra effort into providing the finest personal service for their guests. Genuine. Full Customer Engagement is achieved when customers find a companys performance genuine. Customers can spot fake smiles. They love it when employees know them by name. They love it when employees treat them as a friend would. The Ritz-Carlton Credo prioritizes genuine service as the hotels highest goal, and Ritz-Carlton employees follow through on that promise.

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Why CRM? Ritz-Carlton believes in providing luxury services to all its customers. It stresses on the customer value as its competitive advantage. Creating a positive customer-perceived value leads to customer satisfaction and enhance customer loyalty. In order to implement its credo and corporate philosophy that focus on service quality, it utilizes a well laid out CRM framework. Different types of bonding initiated by Ritz Carlton Ritz-Carlton tries to bond with its customers at different levels: Financial bonding - In September 2010, Ritz-Carlton introduced a loyalty-and-reward program called Ritz-Carlton Rewards to have financial bonding with customers. It is linked-up with the likes of Abercrombie & Kent, Neiman Marcus, National Geographic Expeditions and Vera Wang, and customers can get air miles instead of reward points, if they prefer. Customers earn ten points (or two miles) for every dollar spent on room rates. It's also linked with Marriott's loyalty programme, Marriott Rewards. Customers can't be a member of both programmes, but members of Ritz-Carlton Rewards can earn Group 3 Page 8

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points in other Marriott hotelsand Marriott Rewards members can earn points at a Ritz-Carlton. They have a Ritz-Carlton card associated with the program. Transparent mass customization - Ritz Carlton is a pioneer in transparent mass customization. It collects and stores wide range of information about its guests. The next time the client visits any of their chain hotels in any continent, the service is remarkably well tuned to the guest. The changes are made to product without the customer being aware of it, hence it is mass customization. Things like welcome drink, type of pillow, room preference and breakfast are customized to the liking of the customer previously recorded. This mass customization is a source of competitive advantage for Ritz Carlton. Lifetime Value of a customer at Ritz Carlton: In luxury hospitality industry, knowing the lifetime value of a customer is important. It helps them make a decision as to how to serve the customer. Many a times, the staff are trained to gauge the potential revenue stream which can be expected from a customer before determining how much the hotel can spend on the customer. It is in the best interest of the hotel to increase the time the customer stays loyal to it. The customer becomes more profitable over her lifetime. This is a function of her frequency of stay, the type of rooms she takes or food she orders etc. Ritz-Carlton uses its CLASS software to gather data to determine the CLV (Customer Lifetime Value) of a customer. The Ritz Carlton states that some of their guests will spend an average $250,000 at their hotels and resorts over their lifetime (they just dont know exactly which guests). To that end, The Ritz has given all front line employees the authority to spend up to $2,000 per guest per day to solve a problem, which is a relative small amount by comparison to what they might lose from the wrong unhappy guest. The CRM Process Cycle:

CRM is an iterative process that turns customer data into customer loyalty through four activities: Group 3 Page 9

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1. 2. 3. 4. collecting customer data, analyzing the customer data and identifying target customers, developing CRM programs, and Implementing CRM programs.

The process begins with the collection and analysis of data about a retailers customers and the identification of target customers. The analysis translates the customer information into activities that offer value to the targeted customers. Then these activities are executed through communication programs undertaken by the marketing department and customer service programs implemented by customer contact employees, typically sales associates. Ritz-Carltons CRM System: Types of CRM and Ritz - The Ritz-Carlton have a Customer Loyalty Anticipation Satisfaction System (CLASS). Operational CRM - The front line employees record lots of data about customers including their preferences and specific needs. A "guest preference pad" is part of each employee's uniform. Any guest preferences are noted on the pad and routed to the guest recognition office. Analytical CRM - The data information fed into the CLASS system is analyzed to identify various trends and patterns that help employees service the customers in the best possible way. IT system CLASS To extend competitive advantage by automating the customer service process, Ritz-Carlton in 1998 implemented a customer relationship management program called CLASS--"Customer Loyalty Anticipation and Satisfaction System". CLASS was designed by integrator Cambridge Technology Partners with considerable input from all the people who would be using it, so the system was seen from the start as something that would make everyone's jobs easier. The company recognizes that the most important component of the CRM system is Ritz Carlton's employees and the process built around them. They supply the initial information that is added to the system as well as carry out the services detailed within the system. If the employees didn't put the information to real and concrete use, the system would be worthless. CLASS: The Methodology When a booking is made, the relevant profile information (smoking and bed-type preferences, for example) is available to assist in the reservation process. At that point, the guest's current reservation is linked to his or her existing profile. The information is accessed again when the guest recognition office prepares for upcoming arrivals, up to ten days prior to actual check-in. The guest recognition team reviews the profiles of incoming guests and prepares an arrival report in CLASS to distribute throughout the hotel. This report specifies each department's responsibilities regarding each repeat guest. At each of Ritz-Carlton's 32 hotels, a guest recognition manager is the repeat guest "expert," and all other hotel staff is responsible for noting guest preferences and sharing them with the guest recognition office. Group 3 Page 10

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CLASS is fully integrated with the Ritz-Carlton's property management system and allows users to do most of their work at one time in one application. All the guest preference information is funneled through guest recognition department staff at each hotel. This team is then responsible for reviewing and inputting the information into the system and then disseminating it back out to the rest of the hotel as guests return. Currently, much of the information that is fed into CLASS is gleaned in a low-tech but reliable way. A "guest preference pad" is part of each employee's uniform. Any guest preferences are noted on the pad and routed to the guest recognition office. Employees can also call a hotline to share the information. The company vision, however, is that all employees throughout the hotels will soon be able to access CLASS directly. To that end, the company is now investigating the benefits of using portable technology, such as handheld devices, to assist in widening staff access to the database. Mystique: The Ritz-Carlton Hotel Company enjoys excellent reputation for customer service and its low employee turnover rate. Ritz Carlton uses careful employment selection, comprehensive orientation and empowerment to create a sense of professionalism and service quality in the staff. Ritz-Carlton enjoys a superb reputation for its over 100 international hotels and has an employee turnover rate in the teens in an industry where the turnover rate averages 40 percent to 60 percent. The company's leadership doesn't leave customer engagement to chance. The Ritz-Carlton uses a CRM system- Mystique, the Ritz-Carlton database used to track information such as guest preferences, frequency of visits and issues that have come up for guests during their previous stays. Employees are trained to use Mystique. In addition, every single employee is authorized to spend up to $2,000 without a managers approval to satisfy a guests requirements. And each shift begins with the Line Up, a compulsory 15-minute meeting for all employees, where events, both positive and less so, are discussed. The Ritz-Carlton is the only one that asks guests questions about their emotion, attachment, and pride, and tallies the scores to quantify customers as fully engaged, moderately engaged, and not engaged. Mystique- The Data Story: The Mystique system is heavily fed on data. Ritz-Carlton reports on absolutely everything -- from the general morale of the restaurant staff in Bahrain to the number of scuffs on an elevator door in New York. Every day, the company's staffs determine whether they're meeting the key success factors -- and if not, what needs to change. Thus, each location and every one of The Ritz-Carlton's more than 38,000 employees turn in a river of quantitative and qualitative data points. Those bits of data, filtered by the requirements of the key success factors, are examined to give the company real-time information that it uses to set and evaluate the business priority measurements that make up the key success factors. It's a feedback loop of current information, starting and ending with the priorities. The key success factors feedback loop provides the communication that prevents The Ritz-Carlton's service from being mechanical -- and keeps it personal, for every person in every location Group 3 Page 11

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every day. Ritz-Carlton creates a daily Service Quality Index (SQI) at each of its locations, so employees can continually monitor key guest service processes and swiftly address any potential problems. At corporate headquarters in Maryland, management can check the SQIs of all Ritz-Carlton hotels and instantly analyze each locations performance. Other customer service initiatives include the CLASS (Customer Loyalty Anticipation Satisfaction System) database that contains the preferences and requirements of repeat Ritz-Carlton guests, and the CARE (Clean and Repair Everything) room maintenance system that ensures all guestrooms are checked and free of defects every 90 days. Such initiatives helped Ritz-Carlton become the only service company to win the Malcolm Baldrige National Quality Award twice. And theyve enabled Ritz-Carlton to forge long-lasting customer relationships, as evidenced by the hotels Top 20 ranking on the Brand Keys 2006 Customer Loyalty Index. The Ritz-Carlton starts with a flood of data, turns it into a powerful strategy and then targets specific actions to obtain its key success factors. But creating the right strategy to achieve the factors takes as much evaluation as analyzing the data in the first place. First, The Ritz-Carlton defines the priorities that make up the success factors so that they're actionable and applicable to all employees. To draft the actions, a cross-functional team -- including senior corporate leaders, field representatives such as human resources managers, and rank and file employees -- reviews the plan and contributes insights. The company also uses the data to perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis to adjust to the new information. Mystique- Not just about Data: While the data is helpful in understanding an individual guest's relationship with the brand, the data is only as good as the staff's willingness to leverage it to create ongoing, memorable and unique experiences for the guest. The CRM initiatives of Ritz Carlton Hotel Company are backed by a rigorous employee selection and training process. Employee Engagement: Employee engagement first came to the company's attention because of its correlation to performance measures that have profit consequences; Gallup research has shown that hotels with increased employee engagement scores have lower management turnover, fewer safety incidents, and higher profitability and productivity. Ritz Carlton company began using Gallup's Q Employee Engagement metric in 2006. The RitzCarlton has an extraordinary number of engaged workers, with an overall engagement ranking in the upper quartile when compared to all the workgroups Gallup has studied. And its employee turnover is low enough to be legendary: a mere 18% compared to the luxury-hotel industry average of 158% for line-level workers, 136% for supervisors, and 129% for managers. The Ritz-Carlton hires only the very best of the very best -- they select just 1 out of every 20 applicants, and that's after applicants are pre-screened for job requirements. But fit to role is only part of the employee equation. The other is employee engagement, because engagement is the cornerstone of every Ritz-Carlton success factor. More on employee orientation and training for effective delivery of service and value to the customer using CRM framework is dealt in a separate section.

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Engaging Guests: The other side of the employee engagement coin is customer engagement.

Engaged employees understand the cultural core of Ritz Carlton- delighting the customers. Technology is just an aid. The employees are trained and nurtured to believe in the companys credo and do their best to satisfy the customers. Customer engagements are aided and facilitated by the CRM systems. Employees are trained to ask the right questions and seek the relevant information for recording customers preferences and specific needs. A culture oriented towards serving customers in the best way possible only makes the use of CRM tools easier. Without employee motivation, he best of software and technologies will fail.

Training for CRM:

Employees have negotiated the hiring process; the journey to excellent customer care has just begun. Smart companies teach their employees not just technical skills, but people and customer care skills throughout the course of their career. The Ritz-Carlton sponsors one of the most thorough training programs in the business world. Frontline employees undergo 300 hours of training their first year and 120 hours per year thereafter. "On employees' first two days, they go through an extensive orientation process during which they meet with every division leader in the hotel so that they can understand how all of the areas work together to serve the guests. They learn about our corporate credo, the pyramid, our company vision and the 'gold standards' we aim to achieve with each guest experience. They also Group 3 Page 13

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eat lunch one day in the guest dining room so that they can experience what it's like to dine there from the guest's perspective. On their third day, when they report to their actual job, they're paired with a trainer--one of their more-experienced co-workers. Then on Day 21 they meet with their orientation class to discuss how they've seen the 'gold standards' in action and what they like and don't like about working at The Ritz-Carlton." BI sends its new associates through a six-month orientation and certification program. Associates are also encouraged to take several of the more than 300 courses offered through BI University each year, including "Coaching for Success," "Re-igniting Your Purpose and Passion at Work" and "Advanced Negotiating Skills." Associates are recognized for taking classes and getting certified in different disciplines, they receive promotional items such as fleece jackets or pen-and-pencil sets and are recognized by their peers. MLGW also trains its employees in customer care before sending them out to light furnaces or determine why a customer's power is off. Before employees move into a customer service area, they take a customer contact test that determines their aptitude for problem solving, judgment and interpersonal skills. For current staff, we have a Mastery of Customer Service certification program, which is a 16-hour curriculum on how to handle difficult customers, communication and problemsolving skills, time management and other crucial skill sets. Field reps also go through a 23-week training program. And managers regularly ride with field reps to make sure they're doing the job well. Training isn't just for new hires and frontline employees. Too many managers approach training for themselves with a 'been-there-done-that' attitude. Managers need to be role models for their employees and show them excellent customer service. Managers' attitudes translate into their employees' actions. Nobody's perfect. Managers need to approach their own training with a sense of wonder and excitement about what they may learn that could help them improve their own performance.

Benefits from CRM

Ritz Carlton has benefitted highly by their Customer Relationship Management Efforts: CLASS programme has been successful and benefitted the customer by reducing the amount of repetitive form-filling that the customer has to do. Customer preferences are also kept on record, making placing an order quicker and easier for the customer. Guest preference pad across the globe has helped the hotel to exceed the expectation of the guest, when the room attendant remembers exactly what is to be served based on previous experience. CRM systems of Ritz Carlton have brought operational benefits and have boosted company performance; this, in turn, has increased customer satisfaction and long-term success through longer and closer relationships.

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By combining an understanding of customer purchasing drivers and customer profitability, the hotel is able to tailor their offerings to maximize the overall value of their customer portfolio. In hotel Industry Word of Mouth is the important medium of marketing and Ritz Carlton through its CRM initiative been able to capture this. Customer Loyalty towards the brand has increased over the years. Fully-engaged guests are spending more nights in a Ritz-Carlton every year than any others. There is a direct correlation to profitability. Ritz Carlton has been able to provide anticipatory service and delight the customer.

Future of CRM
To move forward, CRM must return to where it once was. Technology will of course provide new methods, but the present and future products with which to do so will still need to facilitate real, and personal, relationships. Successful business is and always will be the result of successful relationships. Corporations will gain the benefits they attempt to achieve by allowing their employees to use CRM as an individual and building relationship value, rather than continuing to gather information for the sake of gathering information. It may seem counterintuitive, but by ignoring the cumbersome corporate intrusions and focusing on building the relationship value, everyones goals will be met. Many Stalwarts in CRM Industry believe that there will be increasing number of functionalities included in CRM suites. The functions of CRM are cropping up at many other places. There is always the conflict between efficient and effective. In future lot of focus would move to efficiency rather than just the number of calls, like giving the sales rep more time to make average sales calls. There will be a need of average sales person to make great service calls which would in turn result into helping the customer climb the ladders of Customer engagement like client, supporter, advocate or even partner. CRM customers are also demanding more and more knowledge management functionality. Essentially, in the e-Business economy, there is a need to deliver customer organizational knowledge on demand, anytime and anywhere. In future we would need a push to a lot more functionality being put into the CRM tools themselves. Lead tracking systems are great, but what I really want now is knowledge management systems, sales coaching systems, and service intelligence systems to help take the next step. Vertical solutions are another hot trend. We are approaching the end of the one size fits all CRM Group 3 Page 15

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market, and entering an age of verticalization and specialization. There are different types of customers, different types of business models and selling strategies, and over time there will be a need of different CRM software to support these kinds of models. What you had in the past was companies developing a tool set, and saying go and customize it for your industry. The models would require more customization and to some extend great deal of specialization. The collection of this data is important but data insight is now king. Industry experts such as Googles chief economist, Hal Varian, have pointed out that the ability to effectively analyze data in order to meet customer needs will help businesses gain a competitive edge. Increasingly, companies will lean on data collected from social media to define new products and make decisions about product strategy. The latest enterprise software forecast from Gartner shows Customer Relationship Management (CRM) increasing to a $36.5B worldwide market by 2017, a significant increase from the $20.6B forecasted in Q1 of this year. CRM also leads all enterprise software categories in projected growth, showing a 15.1% CAGR from 2012 to 2017, also revised up from 9.7% in the Q1 forecast.

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Some Facts
ERP spending worldwide is projected to grow from $26.03B in 2013 to $34.3B in 2017, attaining a

CAGR in the forecast period 2012 2017 of 7%.

Business Intelligence (BI) worldwide is projected to grow from $14B in 2013 to $18.6B in 2017,

attaining a CAGR in the forecast period 2012 2017 of 7.3%.

Supply Chain Management (SCM) worldwide is projected to grow from $9.16B in 2013 to $13.6B

in 2017, attaining a CAGR in the forecast period 2012 2017 of 10.4%.

Data Integration Tools and Data Quality Tools worldwide are projected to grow from $4B in 2013

to $6B in 2017, attaining a CAGR in the forecast period 2012 2017 of 10.3%. The future of CRM for sales and marketing ought to be. 1) Out-of-the-box Lead Recommendations: Todays CRMs are empty; they require data to be added to make them useful. CRMs of the future should be purchased and upon first use recommend and identify customers for your business. The solution should completely eliminate the need to buy leads separately or hire a lead management team to find good leads. For example, if Im selling janitorial services to office buildings, my CRM should every morning recommend new office building management companies to me based off of my existing customer base, quality controls, and marketing response. 2) True Canonical Leads: For every lead, every sales and market team should have that same lead. Across competitive and non-competitive industries, leads are duplicated. A specific lead should be canonicalized as a singular lead across all marketing and sales teams. Software should learn which leads are active, inactive, or who need specific products or services. CRM users should all be contributing data to the same canonical lead record so long as that data contribution is noncompetitive. This will significantly cut down on bad data, wasted time, and more importantly spam to potential customers. If someone doesnt need your product or service, the data should tell you, and we can only realize this if we all contribute to the same lead records. 3) Pipeline Data Views: Sales has evolved: inside sales is overtaking field sales. Therefore, division of labor has become more important. Within an organization, there are reps who qualify leads and set appointments, and those who close leads. These jobs are very different and the future products to enable these jobs will provide different views for each type of rep. Lead Development Representatives should see recommendations of leads they need to qualify and Account Executives should see more detailed information about a qualified customer are they on Facebook FB? Do they Tweet? How good are their reviews on Yelp YELP? We cant have a single view for all types of reps; software should present the right data to the right rep at the right time. Coupling great data and the right data within each view drastically improves rep productivity. CRM is one of the most dramatic, fundamental changes in the history of business and is fundamentally the expression of the customer-centric business philosophy. It is how you respond to the fact that customers are now the drivers in our economy. Vertical solutions are another hot trend. There are different types of customers, different types of Group 3 Page 17

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business models and selling strategies, and over time there will be different CRM software to support these different models. What you had in the past was companies developing a tool set, and saying go and customize it for your industry. But now you have vendors coming into the market saying they will give you a 110 percent solution for a specific vertical. In a few years, there will be no horizontal or generic CRM. There is increased functionality in CRM suites coming soon, even as functions associated with CRM are cropping up elsewhere. A lot of the stuff done has been focused on efficiency, like giving the sales rep more time to make average sales calls. CRM customers are also demanding more and more knowledge management functionality. Essentially, in the e-Business economy, there is a need to deliver customer organizational knowledge on demand, anytime anywhere. There is a push to a lot more functionality being put into the CRM tools themselves, Lead tracking systems is great, but what really customers want now is knowledge management systems, sales coaching systems, and service intelligence systems to help take the next step. In short, the future of CRM is bright indeed. CRM will become deeply ingrained as a business strategy for most companies. Technology will evolve while technical and organizational challenges are overcome. Much will change in the years ahead, but one thing is certain: CRM is a journey, not a destination, and customers have their hands on the road map and the steering wheel. The rest is up to you. Are you ready? Web based CRM software simplifies things. It will help clients see whats going on and help them strategize to move forward, too. It will help them with prospecting, customer relationship management, pipeline tracking, and it will help gather analytics that will make the needed next steps with existing relationships crystal clear. Some software tools seem too complex to integrate into the business and many people think they dont have time to add more steps into their already busy day. But a web based CRM software that is hosted is a great solution. Login to a secure portal and see where things are at. A simple few clicks will keep things up to date with existing deals and help you focus your energy in the right areas. It will even offer collaborative abilities, too. A common scenario with a web based CRM software is that it will help clients be better at what they do without adding hours to their day. The results for your customers and your sales numbers could be phenomenal.

Conclusion
Implementing an effective CRM solution is not complex. Adequate planning, effective communication, stakeholder involvement and mistake avoidance will ensure that your initiative gets off the ground easily. Most premier hotels across India have implemented CRMs. They have realized that a happy and satisfied customer is a retained customer and thats the key in creating superior brand equity and better returns.

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