Customer Relationship Management (CRM)
First, it is argued that CRM is hard to implement since it requires special technical skills and knowledge. On the contrary, CRM is easy to adopt into the organization as most processes are automated. Second, there is a misconception that CRM does not guarantee return on investment (ROI). It is hard to quantify the benefits of CRM, but its ROI can be measured in terms of increased sales, improved relations with customers, and productive employees. Third, some organizations believe that they do not need CRM as the spreadsheets are just adequate. Fourth, employees believe that CRM will instantaneously increase sales.
Q2. In business-to-business (B2B) relationships what are a couple ways trust helps reduce the cost and risk of working together?
Trust is an important element in reducing risks and costs of businesses working together. According to Buttle and Stan, there are two main ways trust reduces risks and costs (9). First, parties that trust each other will not incur costs of monitoring each other’s commitment and willingness to comply with contractual obligations and terms. In this scenario, trust reduces transaction costs incurred by both parties in formulating and enforcing contracts. Second, trust reduces frictions that could lead to high legal costs. Third, trust encourages increased capital investments into the relationship and the business.
Q3. Define churn and explain why a hotel brand would want to decrease it.
In the context of CRM, customer church rate, also attrition rate denotes the percentage of clients the company loses over a given period. High churn rate is often avoided for the following reasons. First, having a large retention rate ensures a business has a large customer base which increases sales and betters business performance. Second, when churn rate decreases, the average tenure of the client grows which increases their loyalty and commitment to the brand. Third, the hotels would want to decrease churn rate to have better insights on their long-term customers. .
Q4. The opposite of churn is retention, and one of the fundamental purposes of focusing CRM efforts on customer retention is to ensure that the company maintains relationships with strategically significant customers. In what circumstances is it not beneficial to maintain relationships with all customers?
B2B companies could want to give up some relationships with customers in certain circumstances. First, then they are afraid of losing control. Relationships entail making bi-lateral arrangements involving unilateral control of resources thus, when one side is benefiting at the expense of the other, the relationships lifetime value reduces making it unfavorable to one party. Second, then the costs of maintaining the relationship is higher than the value realized. Third, when a business is no longer willing or able to commit resources such as time, money, and people, to nurturing the relationship.
Q 5. Please briefly describe the key aspects of touch points, moments of truth and customer engagement and how they differ?
Touch points define the key points of contacts made by the customer. This element is essential in determining the customers experience and perception of the brand. Unlike touch points where the customer makes first contact with the brand, moments of truths refer to any interactions that influence the customer’s impression of the product, service, or brand. Customer engagement denotes the emotional attachment or connection created between the customer and the brand. Engaged customers purchase more and are likely to become loyal to a brand. It is the responsibility of the company to create favorable touch points, customer engagement, and moments of truth.
Q 6. Speaker-related questions. Jim McPartlin is an industry-honored and recognized expert in service, complaints and service recovery. He suggests a four-step method for handling complaints. What are the four steps? He also helps his clients understand and use supportive listening. Define the concept of supportive listening and what the chief benefits are.
The four step method for handling complains has to begin with listening to the customers complains, apologizing, solving, and thanking them for raising the issues. Jim McPartlin defines supportive listening as the act of suspending personal emotional and mental activities sufficiently to honestly and truly receive the message by the customer. This approach to listening has various benefits namely, it encourages the speaker to express his or her deepest feelings. Second, it reinforces conversations and provides essential feedback that could be important in improving the relationship. Third, it enables probing of more sensitive information.
Q 7. Thinking about your group project (United, Carnival, Six Flags), list at least 2 mutually exclusive customer groups in your customer portfolio.
- The first group is composed of thrill seekers. These are customers with an active and extroverted lifestyles who value and cherish the carnivals and social events
- The second customer group is composed of the less active introverted teenage customers seeking a relaxing experience away from normal duties and responsibilities.
Also, y one definition, a value proposition refers to the value a company promises to deliver to customers should they choose to buy their product. For each of your mutually exclusive customer groups describe the value proposition your company offers.
The value proposition for the first group includes lots of music, fun-filled events, and a social environment that will help them unleash their wild side. On the other hand, the company also provides a relaxing experience for the introverted customers out to reconnect with the world around them.
Q8. Service recovery: You’re in charge of customer service and service recovery at your hotel. In the evening at the hotel’s upscale, romantic restaurant five couples who are also guests of the hotel are enjoying dinner. One couple consists of two women who were just married and are on their honeymoon. They are holding hands across the table and enjoying a lovely dinner. Another guest who’s from a more conservative part of the state complains to the restaurant manager that he’s offended by the behavior exhibited by those two women and wants them to stop. He’s really angry and nearly yelling at you (acting ‘like a child.”)
Thinking about Jim McPartlin’s guidance and the scenarios I described to you from my experience:
- Outline how you would respond to the person complaining and the two women having a romantic dinner.
The child like reaction is characterized by temper, sulking, and tantrums. The first reaction to this scenario would be to take the complaining customer away from the crowd. Listen to them, apologize for the inconvenience, solve the issue, and thank them for trusting in my help. I would solve their complaint by exercising supportive listening. After understanding their issues, I would approach the two women and politely tell them to be considerate of the environment.
- Should you have a policy in place about mild forms of public displays of affection?
Yes, there is need for policies to regulate public displays of affection because some customers could be uncomfortable in such environments.
- What should that policy be?
The policy should encourage responsible behavior that is modest and considerate of the other customer’s feelings.
Q9. B2B vs B2C customers: In chapter 5 and in Week 7 slides we looked at key differences between the customer in B2B (business-to-business) and B2C (business-to-consumer) contexts.
You are general manager of a 4,000-room hotel with conference space in Las Vegas that attracts leisure guests and conference attendees. The hotel sells 50% of its hotel ‘inventory’ (meaning the rooms available on any given night) directly to consumers. The other 50% is sold to conference planners. In turn the conference planners provide rooms to their conference attendees as well as other services and products (breakfast, boxed lunch, social hour followed by dinner).
Briefly describe each of those key differences between a B2B customer and a B2C customer.
The first difference between B2B and B2C is that the former attracts huge sales thus they are offered higher discounts. The discounts are aimed at enticing the business to continuously consider using the services. Second, B2B customers spend more because they purchase bulk services for their customers. Third, B2B customers are likely to engage in reciprocal trading where the two firms promote each other across different levels. On the other hand, B2C services are offered to the end user and not another business as it is the case with B2B.
Q10. Engagement is increasingly important in CRM. Managers often try to build engagement by creating interactive relationships with consumers that get them more involved with and connected to their brand, as illustrated in the following JetBlue case:
JetBlue is a USA-based airline founded by David Neeleman in 1999. (At the time of this case,) [t]he company employs 17 individuals in its social media department, has a Twitter feed with 1.8 million followers and a Facebook page with more than 880,000 “likes.” Moreover, they have 200,000 potential passengers signed up for their cheap deals feed. JetBlue uses these mechanisms to communicate with and respond to customer issues more than to advertise. One time, a disgruntled flight attendant exited a parked JetBlue flight via the emergency slide causing a public relations issue for the company. To relieve the situation, the company made light of the episode in a blog. The first customer comment on the blog read, “I love you JetBlue.” That customer is engaged. When snowstorms led to flight cancellations in 2014 JetBlue announced in its blog “Blue Tales” that
We will reach out to customers directly via provided contact information to assist in re-accommodating them on … new flights. We’ve also established a compensation plan to address the inconveniences our customers faced. The plan addresses those customers who experienced multiple cancellations, and offers TrueBlue points, credit toward a future JetBlue flight, and/or monetary reimbursement based on the level of impact.
Passengers posted comments to the blog, and JetBlue responded individually to each comment whether the comments were favorable or unfavorable.
Answer the following:
- Using this case, your own experience and research (if you’d like), explain how JetBlue is building engagement among its customer base and why this is beneficial to the company. (100 words or about 7 lines max)
A critical analysis of the case study shows that JetBlue is committed to managing the customer’s journey and ensuring that it optimizes support to its clients. In return, the customers become loyal and more engaged with the brand. These steps are strategically and deliberately taken by the firm to retain and develop customers. In the long run, JetBlue benefits from increased lifetime customer value. According to Valmohammadi the intent of constantly engaging with customers at a personal level is not only aimed at delighting them, but also building strong structural and social bonds that optimize engagement (8).
- Compare JetBlue’s engagement-building activities to another travel or hospitality company you are familiar with and describe which you think does a better job and why. (100 words or about 7 lines max)
Whereas JetBlue has been ranked as the best airline in 2020 for providing superior onboard experience, American Airlines has been ranked as the worst airline in the USA. American Airline lacks engagement-building activities thus unable to develop the structural and social bond required to keep the customers satisfied and loyal. The company has been blamed for excessive customer complaints, involuntary denied boarding without communication or updates, mishandled baggage, and lack of on-time performance.
- If you were running a hotel and wanted to engage with Gen Z travelers, which social media platform(s) would you consider using and describe one engaging tactic you might deploy. (100 words or about 7 lines max)
Instagram. I would create a viral promotion that encourages taking pictures and videos while at the hotel and sharing it extensively for likes. The promotion will be created in form of a challenge where the person with the most views will be rewarded.
Buttle, Francis, and Stan Maklan. Customer relationship management: concepts and technologies. Routledge, 2019.
Valmohammadi, Changiz. “Customer relationship management: Innovation and performance.” International Journal of Innovation Science (2017).