CRM implementation at Ipanema Inn

Ipanema Inn is a resort located in Lennox Head NSW. One of the priorities of the resort nowadays is to improve its relationships with guests, especially through the customization of services provided to frequent and VIP customers. Considering that, it is believed that a Customer Relationship Management System (CRM) would be an enabler of improvements in some of the processes that are currently being developed manually.

Reichheld, Jackson and Levine (cited in Chain & Popovich, 2003) advocate that the effective and efficient management of customer relationships leads to increases in customer satisfaction and retention rates. CRM applications are tools that can assist organizations to better capture customer profiles (who they are; what they do; what they are like; and what they like) and customer’s preferences as well as purchasing patterns from previous interactions and optimize future ones (Chain & Popovich 2003). In addition, CRM enables the ability of enhancement of long-term customer relationships (Gee et al 2008), which converts with Ipanema Inn objectives.

The Key features a CRM system should have are:

• Standardization of information collection and recollection processes,
• Standardization of reception and reaction processes, Provision of guidelines for personnel in charge,
• Fusion of information collected by different departments and enhancing interdepartmental communication and information flows,
• Increase of information flow and speed, comparativeness of information and provision of guidelines standardizing of relevancy of information,
• Customized sales/marketing strategies.

Though the system itself is important, especially in CRM the ‘human factor’ needs special attention, as it is crucial to its success. This is not only about success and failure but rather the additional benefit deriving from an increase of loyalty and dedication of employees towards a reliable and valued system. Therefore the implementation will incorporate an extensive training of employees, to persuade them of the company’s need of their positive attitude towards the system and the proactive participation as part of it (Robinson, 2008).

Improvements in guest retention lead to increased revenue growth. Guest retention is a critical factor in determining a company’s long-term financial performance (Oracle, 2006). Nowadays a customer-centric strategy is a business essential in the hospitality industry. Kandampully and Duddy (1999 cited in Walton & Xu, 2005) argues that it costs five times more to attract a new customer than it does to keep an existing one. A CRM system has been widely regarded as a company activity related to developing and retaining customers through increased satisfaction and loyalty (Walton & Xu, 2005).

The implementation process comprises the following activities (Xu, 2008):


• Evaluation and acquisition of software and hardware resources
• Prototyping and testing
• Documentation
• Integration of the new system and data conversion
• Training
• Conversion process according to the implementation strategy
• Post-implementation activities

After the implementation, an ongoing evaluation, update and maintenance is required to ensure the system runs smoothly. The implementation of CRM system certainly meets Ipanema Inn's strategic goals, reducing customer acquisition costs considerably and increasing revenues. Furthermore an effective CRM strategy can increase customer satisfaction and loyalty, highly important in the competitive business environment.


List of References

Chain, I., Popovich, K. (2003), ‘Understanding Customer Relationship Management: People, Process and Technology’, Business Process Management Journal, Vol. 9, Issue 5, pp. 672-688.

Gee, R., Coates, G. and Nicholson, M. (2008), ‘Understanding and Profitably Managing Customer Loyalty’, Marketing Intelligence and Planning, Vol. 26, Issue 4, pp. 359-374.

Robinson, J. (2008), ‘How the Ritz-Carlton Manages the Mystique’, Gallup Management Journal, December 11, 2008, http://gmj.gallup.com/content/112906/How-RitzCarlton-Manages-Mystique.aspx viewed on 20.03.2009.

Oracle (2006), ‘Why CRM? The Business Case for Customer Relationship Management’, Oracle Corporation, http://www.oracle.com/applications/crm/siebel/resources/why-crm-the-business-case-for-crm-white-paper.pdf viewed on 22.03.2009.

Walton, J. & Xu, M. (2005), ‘Gaining customer knowledge through analytical CRM’, Industrial Management & Data Systems, Vol. 105, Issue 7, pp. 955-971.

Xu, J. (2008), ‘Information Technology Management: A Strategic Approach’, McGraw-Hill, Sydney, Australia.