Relationship marketing is a very substantial element in the Hotel industry towards attaining sustainable growth. This has contributed to the innovative methodology of improving customer relationship known as Competitive Relationship marketing. It has been one of the key performance indictors in the Hotel industry. This involves preliminary identification, establishment, maintenance and enhancing of good customer relationship. In promoting relationship marketing in the hotel industry will promote and create value for the customers.
According to Schlegelmilch and Penz (2002), this will in long run lead to improved profit maximization generally to the hotel industry. This will be reciprocating of series of good relations between customers and improved profits. The importance of Relationship marketing is that it incorporates emphasis on truth to the customers and enhances building of good partnering with customers as well as addressing customer in a good manner. It also entails avoiding any emotional behaviors towards customers.
By incorporating these credentials in the strategy it gives the industry a very definite competitive advantage and hence improves the general business performance. Despite the fact that relationship marketing entails some capital expenditure due to a lot of resource allocation by the sector, it will in long run improve the financial performance of the business. Promoting relationship marketing in the Hotel industry will ultimately contribute to a well structured marketing mix this influences the service quality to the customer.
Improved services will be affected by the nature of the relationship with the clients. The pricing of the services to the customers will also be highly influenced by the existing customer relationship. Relationship marketing acts as a moderator as well as stimulator for the sustenance of positional merits and affects the impact of strong competitive and market conditions on the formulation of the marketing mix. Buttle (2004) stated that ,relationship marketing is that it enhances Customer acquisition.
This involves critical analysis on the fundamental methodologies and reliable systems used to manage customers. This is a marketing technique used by most of the hotel industries in attracting more customers. This calls for a strategic continuous improvement in both promotional activities and majorly in customer relationship acquisition methods. It incorporates incentive programs which develops and manages customer loyalty incentives which generate realistic measurable results.
For several years it has been realized that there has revenue drive by most hotels attributable to enhancing employee and customer royalty and more so encouraging desired behaviors with rewards. According to Bouncken (2002), help this Hotels to increase indirect sales and strengthen relationship with dealers, partners, distributors and resellers in a single and multi-step distribution channels. Nevertheless it has to a great assisted the Hotel industry in designing effective and appropriate measures of identifying the end users of their services by promoting intensive marketing to the public in general.
Rigorous marketing has provided a baseline to hoteliers by providing sufficient and appropriate data, that when analyzed well its yield gives a valuable insight into the behavior and values of their employees. Another basic importance of relationship marketing is Customer development this encompasses disciplined customer management processes that encourage frequent analysis and adaption, leadership philosophy that encourage collaboration between customers and the business in general. This will involve minimal planning and analysis of all customer needs and even documentation.
After documentation there is face to face communication with customers. Another importance of relationship marketing in the hotel industry is to enhance customer orientation. This has been a growing focus on customer relation relationship forces enterprises to redesign their processes more customers oriented. This creates comprehensive individual customer needs coverage to ensure that all customer needs are attended promptly. This also incorporates critical analysis on changes in the market environment.
The article “Travel and Leisure” shows that positive relationship marketing in the hotel industry has contributed to improved market share in target industry. It has been attained through some moderating variables which stimulate competition and implement sustainable economic policies that will enhance existing enterprise development. The organizational performance will be enhanced by improved structural relationship among relational benefits, internal marketing, direct marketing and relationship quality criteria.
This will ultimately provide a bench mark to the effects of investment with aim of learning how the industry works. Chen and Popovich (2003) in their study have made it clear that relationship marketing can be used by the industry as an instrument to solve the issues of relationship marketing development. This can be achieved by the fact that, the hotel industry to achieve better performance results by way of enhancing improved operations relationship. This is measured if and only the industry focus on value creation rather than value distribution under conditions of constant monitoring, evaluation and learning.
Generally the benefits which accrue due to implementation of improved customer relationship marketing are very significant, for instance when the customers are much are of how the company has improved relationship they will tend to be less sensitive to price changes. This will definitely drive the companies yields upwards rather than diminishing them. Reseach has showed that promoting relationship marketing is more cost effective than acquiring new customers. The research depicted that its approximately more than ten times expensive to acquire new customers than advocating on relationship marketing.
Distribution costs are likely to be minimal as distribution and marketing products through the most effective channel mix for individual customers will optimize returns compared with promoting and using ineffective and inappropriate means; Customer relationship marketing is not justified by differentiated service for high value customers. For instance personalization needs not to be limited to those customer segments (Tepeci 1999). The availability of effective channels such as internet reduces drastically the cost of mass customization.
Radical experimentation performed across many countries in the world have shown that customer relationship marketing will be fairly the greatest and most reliable source of competitive advantage in future; with only about 5% increment in retention resulting in a profit of up to more than 100%. The future benefits which accrue from customer market relationship in the hotel industry cannot be really challaged. But the development of integrated solutions and practices to deliver these advantages requires adequate planning and consideration.
Many organizations in the hotel industry have so far implemented customer relationship marketing with aim of attaining the foreseen benefits. This starts with appropriate and right information to the clients. This involves exploitation of customer information to provide customer with intelligent information which translates raw data into substantial customer knowledge. The intelligent will also embrace the decision systems which influence the behavior of the operational transactions according to any combination of customer –related criteria, allowing for operational processes to be modified becoming customer –centric.