Assessing the effetiveness of Customer Relationship Management for businesses

Customer Relationship Management (CRM) system is highly recommended in the information-intensive tourism industry. Tourism is a sector that depends heavily on information and as such it requires the service providers to be in close contact with their customers to gain knowledge about customer needs and preferences.

A high-end CRM system is a strategic approach providing enhanced opportunities to use data and information to understand customers and generate both corporate and customer value. Being more than plain IT software, CRM requires a cross-functional integration of processes, people, operations, and marketing capabilities.

Cruise sector is a big business, where customers need to consider safety, reputation, itinerary, ports of call, activities, and quality of meals among other factors. This implies that travel agents have an important role in advising customers. A cruise is considered a heavy purchase and many customers use the Internet to research information regarding cruise offerings, packages and company reputation. As the decision-making process begins, customers seek for the assistance of a person, who will be able to service them by searching for the best deals and packages.

Within this context, an effective CRM system suitable for the cruise sector should incorporate effective customer segmentation and systematic collection, storage and analysis of customer data. In particular:

a) Effective customer segmentation

The CRM system should segment the customers into (1) customers who are frequent cruisers but not big spenders, (2) customers who go on a cruise less frequently but they stay in a high-end suite and spend generously and (3) customers who go on cruise once a year, stay in average-priced cabins and spend a respectable amount on board. In that way, management will be able to understand its high value customers.

Companies which operate in a dynamic changing environment should take into consideration the needs and requirements of the rapidly changing demographics. Traditionally, the cruise market was primarily driven by affluent retirees. During the last fifteen years though, the average age of the potential cruise customer has fallen because younger people from the US, the U.K. and the emerging European markets spend their money on cruises. The changing demographics are a factor that underpins the optimist view that the cruise industry will maintain high occupancy rates and will remain profitable in the years to come.

• A good suggestion for a cruise liner would be to expand market segmentation to the following target groups:
• Baby boomers: they represent the 33% of cruise tourists globally. The only problem with them might be the cost considering that they might not be well-established when they decide to travel on a cruise for the first time.
• Enthusiastic baby boomers: they represent the 20% of cruise tourists globally. They are people who live a demanding and stressful life and look for escape.
• Luxury seekers: they represent the 14% of cruise tourists globally. These are the tourists that spend the most.
• Consummate shoppers: they represent the 16% of cruise tourists globally and they look for best value.
• Explorers: they represent the 11% of cruise tourists globally. They are well educated people looking for specific destinations with historical value interest.
• Seniors: they represent the 6% of cruise tourists globally. They spend relatively to the service provided.

b) Systematic collection, storage and analysis of customer data

The aim of this attribute is to improve the quality of service by responding quicker to the changing customer needs to ensure customer retention. Currently, mainly large companies in the cruise sector use simple or sophisticated CRM systems which, effectively collect, store and analyze customer data. These systems have the following features:

• Improve the customer service management by monitoring the employee performance in relation to the activities directed to the customer.
• Maximize the employee productivity by the use of a browser-based user interface displaying customer information and transactional history
• Increase the management awareness by keeping track of who, what, where, and when a customer buys cruises.
• Transparency, Flexibility, Security of data
• Marketing metric reports
• Indication for the most efficient solution