Travel Reference
In-Depth Information
brand loyalty' (Greenberg in Woodcock, Green and Starkey 2011: 52). While these adjustments
accommodate developments in customer offerings across a variety of platforms, the intrinsic
need to manage relationships with customers remains constant.
Managing customer relationships is a key strategy for building and enhancing ties with
customers that can materially contribute to sustaining competitive advantage. Once ties of
loyalty have been established, customers are less likely to be lured away by competitive
organizations (Vatanasombut, Stylianou and Igbaria 2004). People prefer familiarity in purchasing
and tend to remain loyal to brands and gain a sense of security from recognized and trusted brand
names (Reichheld, Markey and Hopton 2000; Vatanasombut
et al
. 2004). Creating and main-
taining such trust and loyalty requires organizations to adopt a customer-centric view that
involves the customer more as a partner in co-creation and co-production of value (Payne and
Frow 2005). The role of 'customer as partner' has become an imperative with the advent of social
media technologies. The very social environment of the current networking era encourages the
sharing of user generated content (UGC) both between individuals and with organizations,
thereby enhancing customer engagement (Morgan and Chan 2011; Woodcock
et al
. 2011).
Social media tools have fuelled the ability of individuals to comment and report on their
customer experiences to a seemingly limitless audience beyond the control of any organization.
Those that cannot adapt to the 'customer as partner' mode of working risk adverse publicity and
loss of market share (Kietzmann, Hermkens, McCarthy and Silvestre 2011).
Reichheld
et al
. (2000) argue for the reinvention of the pre-Internet 'golden rule' governing
the pursuit of loyal and profi table customers. Its premise is that long-term, loyal customers are of
immense value and the level of return rises over time provided the organization properly
resources the relationship and customers perceive they are gaining benefi ts. In the online
environment, many have overlooked the value of the golden rule and loyalty has been traded
away for 'anonymity, reduced variety and lower prices' (Peppard 2000). This fundamental premise
of customer loyalty is potentially more powerful online where customers may feel less confi dent
in the anonymous environment and require the stability of a recognized brand. Trust then
becomes more powerful than price as customers are less sensitive to cost as they seek out
organizations they perceive as reliable and trustworthy (Vatanasombut
et al
. 2004; Richard and
Zhang 2012). Again, the need for trustworthiness is very evident in the trend towards social
media where organizations are challenged, in a very visible way, to meet customer demands for
good service and to maintain high levels of trust (Kaplan and Haenlein 2010).
There are shortfalls between what organizations think their CRM will deliver and what they
actually achieve. Effective strategies are very diffi cult to determine as organizations struggle to
understand the scope and potential of what CRM can or should deliver (Payne and Frow 2005)
and as many as 75 per cent of organizations deem their CRM implementations to be failures as
they are not seen to increase customer satisfaction or impact on sales (Feinberg and Kadam
2002). However, when organizations use CRM effi ciently and create an effective and focused
strategy there is evidence that they can gain substantial advantages (Rigby and Ledingham 2004).
CRM in travel and tourism
There are travel and tourism organizations that have been innovative adopters of CRM and
recognize the advantages of implementing strategies to more fully understand their customers
(Buhalis and Licata 2002). Others struggle to adapt and the primary reasons for non-adoption
are poor understanding of CRM, unwillingness to change and lack of long-term vision (Genesys
2002). Some industry players understand the importance of CRM but struggle to integrate
customer service strategies with customer service delivery (Gamble, Chalder and Stone 2000).
