With all these changes in the world of course This leaves the hospitality industry (properties, chains and brands) with a few options like e.g., outsourcing, creating their own IT task force or department. Nevertheless, no matter which way you go this is one of the major culture clashes in hospitality history, as two so different working cultures has to follow the same vision. Bridging the knowledge gap, the technical understanding and finding the interdepartmental workflows in the organization can be challenging. This makes itself painfully obvious in many management decisions and organizations, as it takes true strategic commitment thru the whole process.
Further, Sigala (2010) also suggests and recommend that “the firms need to address the following three issues in order to increase their current exploitation levels of web 2.0;” (Sigala, 2010)
The findings of Sigala (2006),”it was clear from the guests’ comments that eCRM is important but face-to-face encounters will always be needed and more appreciated. Guests’ holistic perception of service quality are important, because hotels should not regard their eCRM as isolated practices, but rather as an additional tool for creating and maintaining their relations with the guests. Hence, eCRM should be integrated with all other processes (online and offline) to be able to create and provide customers with a seamless and holistic experience.” (Sigala, 2006)
Sigala (2006) also as a conclusion in her report about e-relationships that,” Findings stressed the need to integrate online and offline practices, as guest did not report any distinction between eCRM service quality and benefits delivered online or at the hotel property level. Guests perceive hotel services as a holistic experience and hotels should critically consider this when they design their eCRM practices” (Sigala, 2006)
This also strengthens the point of having a global and local adaption approach as social media should be handled by people on site as they have the in the middle of the action, has the most qualified local area skills and can follow the customer through the whole process. This is then further argued by Sigala, “Guests tend to link and relate the quality of service received online with the service quality and attention received offline and/or at the property. For example, the guests expected to meet personally at the property the staff with whom they communicated online and they felt and they received an excellent online service from. If this staff was not found on property and he/she could not meet the guests’ expectations created from their online interaction, then a quality gap was created.” (Sigala, 2006)
Another challenge of an eCRM implementation is your customers’ time management as the hours of the day is limited. Even if people are spending more time on social media channel which is supported by multiple reports one of them being the Alcatel report suggesting that, “Consumers are not merely spending more time on social media sites, they are also shifting time away from other long-popular online activities. For instance, the recent Nielsen Co. findings indicate that while social media use is rising rapidly, consumers are spending 28% less time, managing email, 19% less time visiting portal sites, and 15 % less time using instant messaging programs – evidence that social media is cannibalizing other, more traditional contact channels.” (Alcatel-Lucent Enterprise, 2011)
However, this does not have to be a negative thing. The findings of this dissertation support the findings of the Alcatel report but argue that this cannibalization has turned into a positive win-win situation for both company and customer. First, with the current technologies in spam-filters, email blockers and the filter settings in company firewalls a customer that moves to a social media channel 1) is easier to reach, 2) has given you permission and showed trust, 3) has potentially increased your message reach by the number of friends in his/her network, and 4) has given you access to his/her customer information.
Important to point out is that with the right team and dedication some of the leading luxury brands in the hospitality industry have already proven this. Two of the top runners in this race (December 2012) are the Four Seasons and Mandarin Oriental and both have proven that the gaps and challenges can be bridged.
Furthermore in the findings of Sigala (2006),”eCRM is important but face-to-face encounters will always be needed and more appreciated. Guests’ holistic perception of service quality are important, because hotels should not regard their eCRM as isolated practices, but rather as an additional tool for creating and maintaining their relations with the guests. Hence, eCRM should be integrated with all other processes (online and offline) to be able to create and provide customers with a seamless and holistic experience.” (Sigala, 2006)
This view of eCRM implementations is also argued by the Alcatel report, “these efforts are typically spear headed by a company’s marketing department and, unfortunately, most companies have not integrated their marketing and customer service environment” (Alcatel-Lucent Enterprise, 2011)
The main issue that came up was the volume of information that starts coming in as you open a social media channel. When you talk about the sheer volume of incoming communication it is difficult to handle without the appropriate software, processes, and resources in place. If doing so opening a new touch point or channel can do more harm than good as everything will reflect on your brand. The long waiting time is often one of the factors that will generate dissatisfied customers. This must be considered before switching the channels on. Shis also forms the second key question; What are the strategy for timing and response time’s going to be?
This is also a place where the critique is justified and has a strong connection to how the working process is set up and designed all through start to finish. If it the process is weak or has faults the effect over social media is going to be enhanced through the fact that social media can be viewed by anyone, anywhere and at all times. The Alcatel-Lucent report further expands this when relating to research suggesting that, “All of this becomes especially disconcerting when one takes into account finding from the society of New Communications research indicating that 72% use social media to research a company service reputation before making a purchase.” (Alcatel-Lucent Enterprise, 2011) The disconnect between how serious and legit customers handle social media and the way companies handles it has a lot more consequence to it than companies think today.
Brought forward and argued by the Alcatel report, is the following, “it can appear to customers that they are getting fast, authoritative service via social media, but often they are actually receiving inaccurate answers” (Alcatel-Lucent Enterprise, 2011)
The holistic view of eCRM is very important as the eco-system of technology, customers, and businesses as they all operate in the same space. As most eCRM strategies are spear headed by the Sales and marketing departments makes sense. Nevertheless, Zineldin supports the view originally argued by Druckner (1973) that, “Marketing is central to all effective marketing thinking, planning and action.” (Zineldin, 2000) This is also why this dissertation argue that the holistic approach is so very important, or in the words of Druckner from 1973: “marketing is so basic that it cannot be considered a separate function, it is the whole business seen from a point of view of its final result, that is, from the customer point of view.’”
What needs to be communicated to the companies is that embarking on a eCRM journey involves all concerned departments and everything from HR hiring the right people, providing the needed support systems and training, to develop the staff to deliver 5-star service quality, as well as looking after and retaining the best people longer. When you tweak one element it will reflect on the others and if you are missing a piece of the puzzle or have leakage in a process the result will not be the desired one. This is argued by Bueren et. Al (2005) when suggesting that, “it is much better to adapt a cross functional and process view of CRM, as this perspective views organizations from a holistic and integrated approach, allowing full exploitation of the eCRM benefits.” (A. Bueren, 2005)
Under this holistic view, Bueren et al. (2005) identified the following critical CRM processes that the companies have to develop for enhancing customer quality service and creating personalized service experiences;” (Sigala, 2006)
To further complement this view Sigala (2006) sites Gustafsson and Johnsson(2003) when suggesting that, “the service organization should create a seamless system of linked activities that solve customer problems or provide unique experiences. This view stresses the customer perspective as it includes a system of links activities which support and engage the customer in solving problems.” (Sigala, 2006)
This is from a conceptual level and based in academic literature. Nevertheless, the business reports (being more practical and how to-focused) strongly support this holistic eCRM approach. The Alcatel –Lucent report (2011) suggest a cross-departmental social media management team including the following people or positions; (Alcatel-Lucent Enterprise, 2011);
“Overall, the findings revealed that the firm’s level and type of web 2.0 adoption for eCRM practices depends on three major variables namely, the respondent’s perception about ease of use, perceived usefulness, and perceived risk of the web 2.0 tools and application. Specifically, finding showed that the following three groups of variables can significantly affect web 2.0 exploitation levels; (Sigala, 2010)
Branding plays a major role in connecting, creating, and maintaining a relationship and strong connection in order to serve as the symbol the loyal customer identifies with and creating a brand is one thing.
If you do this right and put some thought into this it can add extra power to your efforts or as Alden et al. (1999) state, “Brands with a global image may derive their additional power and value from consumer attributions of enhanced self-worth and status through purchase of the brand. That is, consumers may purchase certain brands to reinforce their membership in a specific global segment, such as business, government, elite, etc.” (Dana L. Alden, 1999) This is something that matches up with the ever so important concept in marketing, segmentation as certain brands appeal to certain groups or individuals.
“A global brand is a brand that is perceived to reflect the same set of values all over the world.” (Fred Palumbo, 2000) Nevertheless, “According to Omellia (1995) successful global brands must anticipate cultural trends, styles and evolving consumer values in order to appeal to customers across international boundaries; a products relevance to its customers dictates its potential ” (Fred Palumbo, 2000)
“Successful multicultural advertisers have secured brand loyalty from culturally diverse consumers by tailoring the brand image to reflect individual cultures. With regard to the brands, creation or maintenance of a global brand is highly dependent upon the existing status of the brand” (Fred Palumbo, 2000) However, working with branding in general and online in particular carries a lot of benefits and according to Mashable (2011), “Social media can make it easier for both large brands and small independent hotels to tell their stories. In the case of larger brands, hotel chains have the opportunity to highlight individual properties.” (Alcatel-Lucent Enterprise, 2011) This creates a good opportunity for unique properties to tell their story and highlight their unique features.
“Brand loyalty also can vary across cultures. Chinese consumers tend to be more brand loyal and tend to purchase the same product as other members of the group recommend, since they tend to be members of a small number of reference groups” (Fred Palumbo, 2000)
“The cultural context of brand loyalty can easily be explained using Hofstede dimensions. Power distance is the willingness to accept that those with power are entitled to it and those without power ought to accept the way things are and just go along. This is an Asian cultural tendency. Big market share brands are the kings of their brand world and consumers from cultures with high power distance tend to believe in them explicit: the dominant brand has achieved what it has because it is the best and one should not question it. The power dimension is related to uncertainty avoidance (risk).” (Fred Palumbo, 2000)
“A third dimension is the individualism-collectivism, the degree to which one’s individual beliefs are submerged to fit a greater good of which is acceptable by society as a whole. Asian cultures tend to be highly collective. This collective orientation has implications formation and brand loyalty and ensure the survival of the dominant brand (Robinsson, 1995)” (Fred Palumbo, 2000)
“Members of cultures with a large power distance and collectivism configuration are found to show a higher degree of brand loyalty. Conformance to the group plays a role: when an individual chooses another brand than the group members or switches brands, it distinguishes this person from the group. It is preferable to choose the popular or perceived popular brands; and cultures with large power distance and collectivism configuration reflect higher brand loyalty scores. This is reinforced in societies with a high uncertainty avoidance dimension, which makes it very difficult for new entrants to gain market share (Mooij, 1998).” (Fred Palumbo, 2000)
As an example, by Fread palumbo (2000) from the Asia markets, “The Japanese worship brand names the perfect solution in a society where individual preference is muted. Once a designer name or a brand logo catches on the scramble begins.” (Fred Palumbo, 2000)
“Mooij (1998) suggests that companies ‘should act local, but think global’ by reaping all the benefits of globalization in production, sourcing, distribution, marketing and the connected benefits of economies of scale in production and organization, but accept that mental images cannot be standardized. This is the global strategy of those firms who have learned to understand that they will only thrive on respect for and exploitation of local culture values. These companies build relationships with consumers and their communication objective is trust. And with the advent of new technologies to support the creative effort, this task is most achievable.” (Fred Palumbo, 2000)
As branding through brand loyalty is such an important link to customer loyalty it is also important to be able to connect the concepts for maximum synergy and to have a way of measuring this in your marketing strategy Brown argues that, “In allocating your marketing information spend, be sure to have ‘brand loyalty’ measurement at the top of your list. It will deliver a sensitive, forward-looking metric to drive actions for competitive advantage.” (Brown, 2012)
“In today’s global market, a brand marketing strategy must go head-to-head, not only with regional or national brands, but also with international competitors marketing strategies. This adds an entirely new dimension to a company’s marketing strategy when it comes to identifying, attracting, and retaining markets”
According to Micro mass, “there is no longer such a thing as ‘one size fits all’ which is also what this dissertation argues as even if the borders fade away, culture does not. So far, the solution has been the quick fix seen from a company perspective and this is also supported by Fred Palumbo (2000) when stating that, “The name of the game has been standardization because of the economy of scale. In reality, few global brands are fully standardized. Manufacturers desire global brands not consumers. Consumers do not care if the brand is global or not, and they increasingly prefer the local brands or what they perceive as a local brand. ” (Fred Palumbo, 2000)
Micromas suggests that, “the key is to go deeper than demographics and get to the core of each buyer” (Micromass, 2010)
When referring to the cultural change it is not just the culture mix of the clients in the online world, for which a strategy and approach is also well needed. However, just as important to have a plan in place for is the culture within the organization, the company culture.
“Participants claimed that the exploitation of Web 2.0 for eCRM practices requires not only the acquisition of appropriate and specialized IT skills, but also a substantial cultural change; participants felt that e-marketers must be transformed from salesmen and information brokers to community builders and consultants, who perceive and treat customers as partners and not as targets. Achieving this cultural shift is not perceived as an easy task and the respondents’ feedback on how to achieve this change has focused on two major themes.” Namely, the job description and the professional attitude of marketers” (Sigala, 2010)
“First, Marketers Job description and professional attitude should change, while secondly management perception of the duties and the metrics used for evaluating marketers’ performance and practice should also support and motivate this change in the professional profile of marketers. (Sigala, 2010)
These findings crucially highlighted the need to include the use of web 2.0 for business exploitation within the job description and roles of e-marketers. However, the description of these online tasks and responsibilities requires a critical and careful consideration and attention, as from the one hand, job descriptions need to be specific for ensuring staffs productivity and descriptions should also be flexible enough for allowing and motivating staff creativity and innovative thinking as regards for the future potential business exploitation of the web 2.0.
Finally, the revision and the updating of the marketers’’ job description is currently critically required, because the former will not only formalize and institutionalize the new tasks and responsibilities of marketers, but it will also enable staff to ensure and obtain increased management’s commitment to their web 2.0 activities. ” (Sigala, 2010)
As branding through brand loyalty is such an important link to customer loyalty it is also important to be able to connect the concepts for maximum synergy and to have a way of measuring this in your marketing strategy Brown argues that, “In allocating your marketing information spend, be sure to have ‘brand loyalty’ measurement at the top of your list. It will deliver a sensitive, forward looking metric to drive actions for competitive advantage.” (Brown, 2012)
Much needed in the industry is a new metric for social media, this is also suggested by Sigala (2010) when stating, “the need to identify a more reliable eCRM metric based on which they can ask and gain management’s commitment for getting additional resources (i.e. time, funds and people). (Sigala, 2010)
When it comes to web 2.0 metrics there are many and depending on what you are looking for in the results, what objectives you want to meet or what goals you have set for the organization you need to look at different ones. However, Volpe suggests a few basic metrics in the primary tool box depending on what channels you are on; (Volpe, 2011)
It all depends on what is relevant for your company, industry, and segments. The better you know what you are looking for, what your objectives are, and what goals you want to obtain the better you your metrics will fit. So, if you know your customers well the better you will be able to match them with a suitable metric.
“Respondents also noted that the need to identify a more reliable eCRM metric based on which they can ask and gain management’s commitment for getting additional resources (i.e., time, funds, and people) that are required for effectively using web 2.0 tools and applications. For example, marketers’ performance is currently based on traditional eCRM metrics (i.e. Customer Economic Life time Value, Share-of-wallet), which do not justify practices such as the provision of a free night to an online user who is an excellent community builder and opinion leader (i.e. a person that spreads good eWOW influencing customers evaluation/selection process), but who is not an economically profitable customer (as reflected in his/her record of last purchase). Participants stressed the need to use new eCRM metrics that can measure not only the economic, but also the social value of customers for the firm. ” (Sigala, 2010)
Guarding the company’s reputation has always been part of a marketer’s job description and with new powerful technologies, as well as new potential uses this has been made possible to perform every day. The basic concept is simple it is all about listening to and monitoring the ongoing conversation about the company’s products. This can be done in a cost-effective way by using different software or cloud-based solutions across millions of review sites, blogs, forums, and social networks. Indifferent of which one you use it is by far the most effective way, and most efficient way to get to know your customers.
In order to gain new valuable insight from all data collected it also need to be analyzed, and if necessary, acted upon. This can protect both the company’s reputation and serves as a useful indicator to see what your customers love and hate about the company and brands. Monitor the conversation, is no longer an option and should be as self-evident as listening to the conversation around the table of a business meeting, for the simple reason that if you do not you will soon be out of the game and this especially applies to the competitive high-end hospitality industry.
Monitoring is not just used to protect your reputation but also to quote the VP of HubSpot Mike Volpe “The conversation has already started and it is our duty as marketers to at least be aware of it and then over time have a strategy for entering the conversation and using it as a marketing tool” (Volpe, 2011) This is further supported by the Alcatel report, “to understand customer sentiment about their brands , prioritize those sentiments to determine the appropriate actions, engage with customers directly , and integrate the resulting interactions across marketing, customer service, and the various customer touch points” (Alcatel-Lucent Enterprise, 2011)
Just like people learn from the mistakes of others, companies can learn from the mistakes of even the most discrete of their competitors and gain insight through listening in on your competitor customer’s feedback. This can as suggested by the Alcatel report present, “a company with a significant competitive advantage.” (Alcatel-Lucent Enterprise, 2011)
