Effective Customer Relationship Management - Customer Loyalty Program

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The Hong Kong Polytechnic University School of Hotel and Tourism Management HTM3129 Lodging Management Lecturer & Tutor: Dr. Deniz KUCUKUSTA

Group Project Title: Effective Customer Relationship Management—Customer Loyalty Program

Class Group: Thursday, SEM004 16:30—17:30 Group Member: Leung Mei Wun, May (10626919D) Ngan Ho Shan, Iris (10571756D) Poon Wing Lam, Yvonne (10627025D) Wan Wing Tung, Yuki (10542306D) Wu Kit Wing Ophelia (10504166D)

Date of submission: Total no. of words:

2nd December, 2010 3,491 words


Content Introduction & Background Objectives Importance of Effective Customer Relationship Management Why Hilton? Criteria of Effective Customer Relationship Program Case Study—Hilton Hotels    About HHonours Points & Rewards MyWay Specials P.13-14 P.15-16 P.17-18 P.19-21 P.3 P.3 P.4 P.5 P.6-7 P.8-12

Analysis & Evaluation Recommendations References Appendix


Introduction & Background Customer Relationship Management (CRM) is defined as the process of attracting, remaining and keeping partnership with a specific group of customers so as to provide value to the company and the customers (Parvatiyar, Sheth, 2001). It has become more and more important among enterprises in the past decade. Although hotels were not the early adopters of CRM, they have recognized the significance of having CRM and have been using a customer-focus strategy in order to develop a lasting relationship with their customers (Songini, 2001). CRM can help understand the preferences and encourage customers to keep their relationship with the business in a continuous manner (Parvatiyar, Sheth, 2001). It would then help improve product and service development. (Bannan, 2001) Customer loyalty programme is one of the strategies in CRM (Uncles, Dowling, Hammond, 2003). The most current loyalty programmes started in 1980s which was originated from the frequent fliers programmes developed by American Airlines. Many airlines as well as firms in hospitality industry then followed and adopted their own loyalty programmes to build up customer relationship (Berman, 2006). The objectives of adopting customer loyalty programme are to increase sales revenue and to develop a closer link with the customers so as to keep the current customer base (Uncles, Dowling, Hammond, 2003). However, not every loyalty programme is successful in achieving the goal of fostering customer relationship (Berman, 2006). There are several criteria in terms of designing, practicing and controlling so as to maintain an effective loyalty programme (Berman, 2006).

Objectives After finding out the criteria of effective customer relationship management, this project aims to analyze the effectiveness of customer loyalty program in Hilton Corporation, as well as to give recommendations to hotels to enhance guest loyalty.


Importance of Effective Customer Relationship Management According to Raab et al. (2008, p.8), the better understandings of customer relationship management yields the possibility of a long-term, sustained increasing of the level of customers satisfaction, and of strengthening the customer’s loyalty, or rather their willingness to commit, to the company. Hence, the ultimate result of creating customer relationship management is not only about generating more revenues for the company, but also establishing a commitment between consumers and company, with a continuous and hopefully a growing amount of repeated business for the chain. Firstly, effective customer relationship management differentiates the company from competitors. With more and more competitors around the globe, it is obvious that a simple, yet personalized and distinguishable form of loyalty programme often attracts customers to come back. Through positive word-of-mouth, every satisfied customer would bring in at least three more customers. In this case, the business grows in huge number with a fast pace. Secondly, effective customer relationship management tightens...
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