Description
As travelers are becoming more price sensitive, less brand loyal and more sophisticated, Customer Relationship Management (CRM) becomes a strategic necessity for attracting and increasing guests’ patronage. Although CRM in hospitality has overstated the importance ofICT, it is now widely recognised that successful CRM implementation should effectively combine and align ICT functionality with business operations
Hospitality Management 24 (2005) 391–413
Integrating customer relationship management in
hotel operations: managerial and operational
implications
Marianna Sigala
Ã
Department of Business Administration, University of the Aegean, 82100 Chios, Greece
Abstract
As travelers are becoming more price sensitive, less brand loyal and more sophisticated,
Customer Relationship Management (CRM) becomes a strategic necessity for attracting and
increasing guests’ patronage. Although CRM in hospitality has overstated the importance of
ICT, it is now widely recognised that successful CRM implementation should effectively
combine and align ICT functionality with business operations. Given the lack of a widely
accepted framework for CRM implementation, this paper proposed a model for managing
and integrating ICT capabilities into CRM strategies and business processes. The model
argues that successful CRM implementation requires the management and alignment of three
managerial processes: ICT, relationship (internal and external) and knowledge management.
The model is tested by gathering data from Greek hotels, while ?ndings provide useful
practical implications and suggestions for future research.
r 2004 Elsevier Ltd. All rights reserved.
Keywords: Customer relationship management; Model; Implementation; Hotel industry
1. Introduction
Information and Communication Technologies (ICT) crucially impact on
travellers’ knowledge, attitudes and behaviour. The increased online price/product
ARTICLE IN PRESS
www.elsevier.com/locate/ijhosman
0278-4319/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.ijhm.2004.08.008
Ã
Tel.: +30 2310 801615; fax: +30 2310 801625.
E-mail address: [email protected] (M. Sigala).
transparency and the new e-business models (e.g. online auctions) enhance tourists’
purchasing power, who are becoming more price sensitive, less brand loyal, more
sophisticated and experience seekers (Gilmore and Pine, 1997; Sigala and Christou,
2002; Sigala, 2003a; Christou, 2003a; Christou and Kassianidis, 2003). The hotel
industry is also experiencing increased globalisation, competition, higher customer
turnover, growing customer acquisition costs and rising customer expectations,
meaning that hotels’ performance and competitiveness is signi?cantly dependent on
their ability to satisfy customers ef?ciently and effectively (e.g. Olsen and Connolly,
2000; Gilmore and Pine, 1997). To enhance pro?tability and guest loyalty, hotels
must nowadays focus on implementing Customer Relationship Management (CRM)
strategies that aim to seek, gather and store the right information, validate and share
it throughout the entire organisation and then use it throughout all organisational
levels for creating personalised, unique guests’ experiences (Sigala and Connolly,
2004; Olsen and Connolly, 2000; Siguaw and Enz, 1999).
Since ICT are a major catalyst for developing one-to-one experiences and
implementing CRM strategies, CRM in the hospitality industry has been primarily
de?ned by the myriad of ICT suppliers that overstate ICT’s role. Consequently,
many hotels have dif?culty in implementing effective CRM strategies, because they
allow software vendors to drive their approach to CRM, or retro?t a CRM strategy
to match the CRM technology they have purchased. However, CRM is not a
technology problem but a business problem that requires ICT tools and functionality
to be aligned, designed and effectively co-ordinated along with the business
operations and strategy. Indeed, several CRM projects have failed due to the lack of
robust implementation approaches and measurement tools, the bad exploitation and
integration of ICT tools with processes, people and business strategies as well as the
inappropriate ICT and business re-engineering and management practices (Rigby et
al., 2002; Corner and Hinton, 2002; Rheault and Sheridan, 2002). In the lack of a
widely accepted framework for effective CRM implementation (Adebanjo, 2003),
this paper aims to develop a model for managing and integrating ICT capabilities
into CRM strategies and business operations. To that end the concept, aims and
crucial factors for implementing CRM in general as well as in the hotel industry are
analysed and summarised into a model that integrates three crucial managerial
processes: knowledge, relationships and ICT management. The model’s usefulness
and applicability in the hospitality sector are illustrated by gathering data from
Greek hotels. Managerial implications, suggestions for improving CRM strategies
and directions for future research are also provided.
2. CRM: concept and implementation
CRM has its roots in relationship marketing inaugurated by the in?uential work
by Berry (1983) and Christopher et al. (1991). Relationship’s marketing rational is to
enhance long-term pro?tability by moving from transaction-based marketing and its
prominence in attracting new customers, to customer retention by means of effective
management of customer relationships (Christopher et al., 1991; Heskett et al., 1990;
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 392
Reichheld, 1996). Literature on CRM highlights the diffusion of relationship
marketing practices into organisation-wide operations and multiple customer touch
points with the aim to identify and understand individual customers’ requests and
then customising/personalising customer services. The organisation-wide and
multiple processes of the CRM effects as well as the vital ICT role are easily traced
in the CRM de?nition. Kalakota and Robinson (2000) de?ned CRM as an
integrated sales, marketing and service strategy that prevents ‘‘lone showmanship’’
and relies on coordinated actions. Dodds (2001) argued that CRM is about servicing
customers better across the entire organisation, while CRM experts (Thomson, 2002)
asserted that CRM is a customer-centric business philosophy and culture that
sustains effective marketing, sales and service processes. Couldwell (1998) de?ned
CRM as a combination of business processes and technology.
At a lower tactical/operational level, CRM implementation is found to require the
following procedural steps (Winer, 2001; Kalakota and Robinson, 2000; Loftness,
2001): creation and data mining of a database of customer activity; use of data
analysis for deciding about which customers to target, how to target, contact and
build relationships with them; development of personalised customer experiences;
channel management for enabling ef?cient share of guest knowledge across the
organisation, so that guests can get personalised and consistent service at anytime,
anyplace, anywhere, any platform; management of privacy issues; and development
and gathering of metrics for measuring CRM success.
To achieve all these, businesses may need to undertake major organisational
changes and transformations at a higher level, whose identi?cation has generated
wide interest and in-depth debates. Wells et al. (1999) identi?ed four key elements for
CRM implementation: business process analysis; integration and redesign of
customer data; ICT enabled customer interaction; accessibility/transmission of
organisational information. Hart (1995) highlighted the importance of building
organisational/operational ?exibility and a process technology that would enable
product/service customisation as well as stressed the need of a marketing department
that would support the identi?cation and analysis of customer needs. To achieve
these, Gronroos (1994) emphasised that businesses should be managed from a
process rather than a functionalistic perspective, whereas Mok et al. (2000) stressed
the importance of exploiting and adopting ICT. However, participants in a Tourism
Society’s seminar on CRM (Alford, 2001) concluded that CRM refers to a strategy
that gets together a combination of ICT tools with business processes and services,
e.g. automated call centre, customer data warehouses and data mining, customised
content, targeted banner advertising and targeted e-mail delivery. Stone’s ?ndings
(Alford, 2001) also revealed that people, customer management and detailed
measurement are the most critical elements for successful CRM, while ICT was
found to act as a CRM enabler only when the previous elements were in place.
Loftness (2001) highlighted the development of measurement processes and
organisational culture around customer satisfaction. Tiwana’s (2001) comprehensive
process for implementing knowledge-based CRM strategies stressed again the
complementary role of ICT on other business processes, while it also integrated
many of the previously identi?ed key elements for CRM implementation. Overall,
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 393
Tiwana (2001) argued that CRM implementation requires a co-ordinated manage-
ment and alignment of: strategic and operational (e)-business processes, ICT,
leadership, change, cultural and measurement strategies.
3. An integrated model for CRM implementation
Although an enormous debate has been initiated regarding the identi?cation and
the importance of different CRM implementation determinant factors, there is still
no agreed framework as to how CRM can be best applied and adopted within
organisations. However, previous debates have clearly identi?ed the major issues for
successful CRM implementation, which, coupled with the additional literature
arguments, lead to the development of an integrated model for CRM implementa-
tion. The proposed model has both a strategic and operational value, as: (a) it
identi?es the major managerial areas whereby strategic plans and/or organisational
change need to be developed; and (b) it depicts the tactical actions that the strategy
in each managerial area should address and include. Overall, CRM implementation
requires a co-ordinated and co-aligned management approach among the following
three areas.
3.1. Knowledge management (KM)
The success of relationship marketing heavily depends on the collection and
analysis of customer information that are used for developing highly personalised
offerings. Buttle (1996) pointed out that marketing problems are by nature
information handling problems. Romano (2000) and Massey et al. (2001) strongly
advocated the relation of CRM with KM and speci?cally customer KM, while the
signi?cance of customer knowledge is highlighted in several CRM studies (see review
in Stefanou et al., 2003). However, information should not be confused with
knowledge. Knowledge is produced when information is analysed and used to enable
and leverage strategic actions. Sigala (2003c) argued that this confusion has led
several businesses to make vast investments on ICT projects which have in turn
yielded marginal results. To overcome the ICT productivity paradox, hotel
management needs to embed ICT-generated customer and competitive information
into its decision-making processes. These processes involve three broad phases that
run in parallel (Tiwana, 2001) namely, information acquisition, sharing and
utilisation. Hence, the collection and creation of insights, skills, and relationships
(knowledge acquisition), when they are disseminated and shared (knowledge
sharing) are followed by integration of learning, insights and experiential knowledge
that in turn support effective decision-making processes (knowledge utilisation).
Davenport and Prusak (1988) identi?ed the following KM critical success factors:
ICT and organisational infrastructure; friendly culture for knowledge sharing,
creation and management; change in motivational practices for encouraging and
rewarding staff when information is collected, shared and used; and open
organisational structure. Malhotra (1998, p. 58) stressed the importance of ICT
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 394
for developing KM: ‘‘yICT embodies organisational processes that seek synergistic
combination of data and information processing capacity of information technologies,
and the creative and innovative capacity of human beings’’. Several other authors (Earl
and Scott, 1999; Zack, 1999) also highlighted the importance of a customer KM
strategy and the crucial leadership role that visionary knowledge of?cers should play
for bringing together all the CRM stakeholders (e.g. frontline, ?nance, ICT and
other staff) to share a common platform of beliefs, expectations and commitment.
Tiwana (2001) also stressed that a knowledge-based CRM strategy requires the
development of boundary spanning communities of practice whose members are
empowered and inspired by a culture of trust that in turn fosters cross-functional
collaboration, sharing of expertise and creation of new knowledge. Indeed, building
trust and driving out fear of knowledge management are fundamental issues for
supporting and fostering staff empowerment, as when they are established employees
are con?dent that taking risks and decisions based on new information, customer
insights and knowledge will be rewarded and not penalised. On the contrary, cultures
that do not drive out fear face two side effects: they force employees to focus on
short-term at the cost of long-term performance; and they encourage employees to
focus on the individual rather than the collective organisation.
However, Dev and Olsen (2000) reported that although hotels capture
considerable amount of customer data, those data are rarely assembled to create
useful knowledge about customers. Cline and Warner (1999) also found that the
collection and use of customer information are frequently intermittent, delayed and
fragmented. The lack of ICT applications’ integration and the legacy systems
designed along functional lines creating fragmented guests’ pro?le have been
reported as the major reason of duplication, inconsistencies, incompleteness and
inaccuracies of customer data in hotels (Sigala, 2003a). Overall, knowledge-based
CRM in hospitality requires:
a hotel culture whereby every customer interaction is perceived as a learning
experience and each customer contact as a knowledge-building opportunity and a
chance to collect new information about hotels’ guest (Olsen and Connolly,
2000);
a knowledge information system shaping the technical basis for information
accumulation, retrieval and distribution of explicit knowledge, leadership that will
motivate knowledge workers and orientation and team structures and knowledge
circles that promote the personalised transfer of tacit and explicit knowledge
(Bouncken, 2002);
incentives and rewards to staff’s efforts to capture, use and share knowledge
for personalising customer interactions/experiences (Siguaw and Enz, 1999;
Bouncken, 2002);
a redesign of customer data across the organisation and a customer-centric ICT
integration and infrastructure (Sigala, 2003b);
understanding of guests’ value drivers and requirements as well as of the ways in
which hotels contribute or fail to create customer value (Dube and Renaghan,
2000).
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 395
collection, analysis and use of three type of customer information (Park and Kim,
2003; Bouncken, 2002): information of the customer (personal and transactional
data); information for the customer (product/service/organisational information
that are perceived useful by customers); and information by the customer
(customer feedback, complaints, propositions, claims).
3.2. Relationship marketing (internal and external)
Within this new paradigm, interacting with customers and satisfying customer
needs are vitally important (Christou, 2003b). Customer relationships are not built
and sustained with direct (e)-mail themselves, but rather with the types of
programmes and communication strategies that are available and for which e-mail
may be a delivery mechanism. Winer (2001) argued that a comprehensive CRM is a
collection of integrated components such as customer service (0800 numbers,
faxback/customer comments cards, e-mail, FAQ), frequency, loyalty and reward
programmes, customisation and community building (e.g. virtual communities). The
aim of these integrated customer communication channels is to support the customer
cycle (i.e. acquisition, enhancement/cross-up-selling and retention) by identifying
pro?table customers, differentiating the services/products offered to different
markets of ones, interact with individual customers in an integrated way across
channels and customise/personalise customers’ experiences.
CRM also largely depends on staff attitudes, commitment and performance and
so, success on the external marketplace requires initial success on the internal
business by motivating and getting employees’ commitment (Gronroos, 1994).
Hence, apart from developing the four P’s of the marketing mix, a host of other
resources and as well as of front-of- and back-of-house activities should be achieved
(e.g. handling guests’ complaints and requirements) (Bitner, 1995). Although most of
the people involved in customer-invisible activities are not part of the marketing
department, their attitudes towards customers and their ways of executing their tasks
are imperative. According to Gummesson (1990), these employees must be trained to
become part-time marketers.
While the idea of maximising transactions is nothing new, what is different is that
this style of guest interaction will demand substantial conceptual skills from every
employee. Because it might be impossible to create ideal guest experiences solely
through expert systems, organisations might have to create intelligent-response
teams comprising of employees with broad knowledge bases cutting across
traditional organisations functions. For dealing with guests’ experience-related
desires, employees will be required to have advanced social skills such as
understanding of role con?ict, role theory, communications and personality
identi?cation (Olsen and Connolly, 2000). Employees will need to be content
experts who do not only know how to work with and exploit technology, but also
can manage the information exchange and match guests to experiences. Moreover,
as such knowledge-based work may take place electronically, staff should be able
and know how to work collaboratively and electronically irrespective of their spatial,
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 396
time and cultural differences. For example, on its corporate website, Wyndham
operates a virtual community and discussion forum for its women business
travellers, which requires enhanced and speci?c technocentric communications skills
(e.g. knowing the netiquette discipline) from Wyndham employees who moderate
and operate this online community. Overall, CRM calls for new job descriptions,
organisational structures, motivational thinking and reward systems.
3.3. ICT management
Data warehouses and data mining are the most popular and highly needed systems
for providing CRM capabilities or else for de?ning, developing and managing ‘‘the
segment of one’’. This is because by helping to wade through volumes of information
and decipher meaning, patterns and relationships from many seemingly unrelated
bits of data, they are necessary and valuable tools for trying to determine customer
demographics, buying patterns, market segments, contribution margins, customer
lifetime, etc. ICT is also instrumental for gathering and storing customer data (e.g.
EPOS systems, website analysis), providing ways for one-to-one interactions, e.g.
website, call centre, kiosks, etc., as well as identifying ways for disseminating and
accessing information across the organisation. However, to achieve the latter, a new
ICT infrastructure is required that would enable the creation of consolidated
customer databases and overcome limitations created by functional isolated digital
‘‘?eld-doms’’.
ICT’s supporting role for fostering business process reengineering and restructur-
ing processes around the customer is widely argued and does not stop at the
traditional organisational boundaries. Aligning the ICT with the organisational
infrastructure is critical so that the numerous systems at the customer touch points
(e.g. Internet, PMS, EPOS, CRS, etc) do not become ‘‘islands’’ of useless
information. Within the hotel sector, Sigala et al. (2001) argued the need to
integrate yield management (YM), customer databases, corporate and distribution
systems for maximising yield per individual guest during his/her business lifetime,
per distribution channel and/or per hotel chain or properties-network. Currently,
Fair?eld and LeMeridien integrated their YM and CRM systems for personalising
their rates, products, services and promotions to their frequent guests. Wells et al.
(1999) described how electronic networks allow the distribution and share of guest
databases across Ritz Carlton hotel properties allowing staff to accommodate and
treat individual guests based on preferences from previous visits. Marriott
International hotel chain installed a ‘‘Codi?cation System’’ to virtually convert
what all its employees knew about hotel day-to-day operations and standard
operational procedures in order to provide consistent customer services (Gupta and
Govindarajan, 2000). The company also designed a reward system for those who
shared, created and mobilised new knowledge relevant to the ?rm. Accor is installing
computers to their lounges for providing information access to employees, who do
not have and need computers for their operations. Similar operations are initiated in
Ritz Carlton hotels (Sveiby, 2000) for enhancing customer loyalty through detecting
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 397
and recording their guests’ special interests and requests at the ?rst time encounter
and then providing personalised attention in return visits.
3.4. Summarising
In summarising the previous arguments, Fig. 1 was developed as a graphical
representation of the proposed integrated CRM model. The ?gure identi?es: (a) the
three managerial areas and their roles/aims for implementing CRM; and (b) for each
managerial area, the operational changes and strategies that are required for
achieving the former goals. The arrows illustrate the need to align strategies among
the three managerial areas, which is also evident by the compatibility of the strategies
amongst the managerial areas. The practical applicability of the ?gure is illustrated
by example of initiatives already found in the industry.
4. Methodology
The paper aimed to develop a framework for developing CRM strategies. After
reviewing the literature, arguments are summarised into an integrated CRM model,
whose validity and value were tested by gathering data from Greek hotels.
Speci?cally, based on the model, the study investigated:
how and why Greek hotels are implementing CRM;
the CRM success implementation factors as considered by hotel managers.
A structured questionnaire was developed for gathering information regarding the
three CRM managerial areas as well as the characteristics of the hotels (including
hotel size, star- category and management arrangement, Table 1). In developing the
research questions for the KM and ICT area, the following issues were considered. It
is generally agreed that a survey investigating information management strategies
should include who—what—where—when questions, while KM investigations
should include why and how (strategic) questions. So, KM ‘‘why’’ decisions were
addressed with the questions (in Table 2) investigating the hotels’ strategic motives
for implementing CRM. For investigating the who—where—when—what questions,
hotels were required to indicate (Table 3): the ICT applications/systems used for
information acquisition, storage, retrieval and dissemination; the type of informa-
tion hotels gathered through ICT (based on Park and Kim, 2003); and the
integration of their ICT systems with organisation-wide guest data warehouses
(which actually re?ects ICT management). As in small and family run hotels,
information is frequently gathered manually (Palmer et al., 2000), a research
question was also set for investigating three options for recording/storing
information without ICT support namely ‘‘storing data in business books and ?les’’
(non-computerised), ‘‘collecting data through guests’ observation and interactions’’
(Table 4). The ‘‘how’’ questions of knowledge management were addressed by the
questions set in Table 5 that investigated how guest knowledge is used and the degree
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 398
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Knowledge Management
Role/aim: acquire, store, retrieve, analyze, disseminate data,
Why and How questions
Strategies: knowledge culture/orientation, customer-centric knowledge
information system, leadership, team structure, knowledge circles, incentives/rewards
Examples: Wyndham: financial rewards for data capture and storage, HARMONY customer
database and mining, Byrequest manager at each property
Accor : decentralized Internet-based intranet including data about best practices, services innovations and
training possibilities & schedules, films/videos, knowledge manager, open corporate culture &
decentralization
ICT Management
Role/aim: acquire, store, retrieve, analyze, disseminate data,
who – what – where – when questions
Strategies: customer-centric knowledge information system, business
reengineering, integrated internal and external systems
Examples: Wyndham: HARMONY customer database integrated with internal systems (PMS)
and externally with Internet based systems (Website) and corporate YM systems
Accor : decentralized Internet-based intranet in order to enable both internal and external integration,
business decentralized structure is facilitated with the decentralized ICT infrastructure
Relationship Marketing
Internal & External Relationship Marketing
Integration of 3 managerial areas
Internal Relationship Marketing
Role/aim: motivate and create a knowledge orientation and
Customer centric culture
Strategies: new job descriptions, part-time marketers, organizational cultures
and structures, social and communication skills online & offline
Examples: Wyndham: financial –promotional rewards, training and development
Accor : motivational strategies such as idea contests, bonuses, benchmarks, training and
knowledge circles, meetings with experts decentralized culture/structure
External Relationship Marketing
Role/aim: provision of personalized quality services in every
customer touch point at any time
Strategies: integrated and multiple communication strategies, loyalty and
frequent guest programs, community building
Examples: Wyndham: Byrequest guest loyalty program. Personalized guest communications
Business women virtual community and discussion forum
Accor : frequent guest loyalty program, personalized communications
Fig. 1. An integrated CRM model.
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
3
9
9
to which its use has improved several practices (external marketing). Hotels were
also required to indicate their use of speci?c human resource management strategies
(e.g. management style, reward systems, organisational structure and culture) and
their importance to CRM success (internal marketing, Table 6, Figs. 2 and 3).
Given the low response rate experienced in previous studies in Greece (Sigala,
2003b) and for boosting responses in this research, three methods for data collection
(postal mail, e-mail and telephone) were used for exploiting the advantages of each
method. A convenience sample of 200 hotels, drawn from the Greek National
Tourism Organisation (GNTO) hotels’ directory, was selected. Hotels were initially
telephoned in order to identify those that had initiated efforts that aimed to
personalise their offerings and build customer relationships. Quali?ed hotels were
ARTICLE IN PRESS
Table 1
Pro?le of respondents
Management arrangement 5 stars 4 stars 3 stars Total
No. (%) No. (%) No. (%) No. (%)
Independently managed 16 47 12 54 25 90 53 63
Part of a hotel chain 18 53 10 45 3 10 31 37
Total 34 100 22 100 28 100 84 100
Hotel size
1–60 rooms 8 33 14 54 19 56 41 49
61+ rooms 16 67 12 46 15 44 43 51
Total 24 100 26 100 34 100 84 100
Pro?le of telephone respondents.
Three independent properties: 14 rooms (5 stars), 27 rooms (3 stars), 45 rooms (3 stars).
Two hotels part of a chain: 150 rooms (5 stars), 459 rooms (5 stars).
Table 2
Reasons for CRM implementation (knowledge management)
Indicate the importance of each
statement to CRM
implementation (5 point scale,
irrelevant—essential)
1–60
rooms
SD 61+
rooms
SD t-value p
Increase guests’ loyalty 4.01 0.82 3.91 0.94 0.251 0.802
Increase service quality 4.32 0.76 4.12 0.97 0.054 0.164
Increase guests’ satisfaction 4.65 0.98 4.44 0.99 0.065 0.187
Process improvement 3.73 1.04 4.03 1.09 2.654 0.026*
Increase pro?tability 3.87 1.03 3.66 1.23 1.138 0.393
Reduce guests’ complaints 3.44 1.21 3.79 1.09 0.037 0.039*
Increase product quality 3.02 1.18 2.99 1.43 0.345 0.749
Reduce costs 3.29 1.17 3.65 1.10 3.28 0.001*
Increase employees’ satisfaction 2.92 1.09 2.74 1.14 1.538 0.136
*Indicates signi?cance at a ¼ 0:05:
M. Sigala / Hospitality Management 24 (2005) 391–413 400
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Table 3
ICT availability and infrastructure—Information Management—(ICT and Information Management) (% of hotels)
ICT availability Integration
with
customer
database (%)
Personal data
(%)
Aspects of
hotel stay
(%)
Complaints
opinions (%)
1–60
rooms
(%)
61+
rooms
(%)
Total
(%)
ICT in rooms division
Front of?ce system 34 86 61 44 100 2 0
Property-based reservation system
(PBRS)
32 91 62 71 100 0 0
Customer database 10 74 43 0 67 22 6
Hotel website 88 95 92 2 48 0 1
Central reservation system 0 7 4 2 100 33 0
Yield management 2 72 38 0 0 0 0
Global distribution systems 5 63 35 0 100 0 0
Marketing and sales system
(M&S)
2 65 35 75 97 48 14
Check in/out Kiosks 0 0 0 0 0 0 0
Smart cards 0 0 0 0 0 0 0
ICT in food and beverage division
Electronic point of sale systems
EPOS
7 42 25 0 0 100 0
Stock and inventory systems 0 58 30 0 0 0 0
Food and beverage (FB) 0 49 25 0 0 0 0
Conference and banqueting
systems
0 28 14 0 0 0 0
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
4
0
1
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Table 3 (continued )
ICT availability Integration
with
customer
database (%)
Personal data
(%)
Aspects of
hotel stay
(%)
Complaints
opinions (%)
1–60
rooms
(%)
61+
rooms
(%)
Total
(%)
In-room ICT
TV based services 0 26 13 0 0 0 0
In-room Internet and e-mail
access
5 21 13 0 0 0 0
On demand movies/games 10 67 39 0 0 0 0
Automated mini-bars 15 67 42 0 0 46 0
General ICT
Property management system 22 91 57 42 0 0 0
Intranet 0 7 4 0 0 33 0
Finance and accounting systems
(F&A)
2 86 45 2 0 0 0
Electronic lock systems 27 65 46 0 0 0 0
Management support systems
(MSS)
0 23 12 0
Decision support systems (DSS) 0 14 7 0
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
4
0
2
then inquired about their willingness to participate in the study and their most
convenient method for ?lling in the questionnaire, i.e. post, e-mail or telephone
(30 min conversation). Overall, 147 quali?ed and willing to participate in the study
hotels were identi?ed, of which 43 replied by mail, 36 by e-mail and nine claimed a
preference to respond via telephone. However, due to time and costs limitations,
only ?ve telephone calls were ultimately conducted, but calls were further exploited
for gathering as much as possible qualitative information. Thus, overall 84 usable
questionnaires were collected.
5. Analysis of the ?ndings
The respondents’ pro?le is provided in Table 1. Based on previous studies (Sigala,
2003b) and other governmental publications, the study’s respondents comprise a
representative sample of the Greek hotel sector, as: the majority of the hotels are
independently managed; respondents being part of hotel chains usually represent 5
star hotels; small size hotels (less than 60 rooms) concentrate on the 3 star category,
while larger-scale hotels on the 5 star. Previous studies (Sigala, 2003a) and
governmental statistics (e.g. Paylopoulos, 1999) have also revealed and indicated
that 30 and 60 rooms is a good metric for distinguishing micro/family hotels from
small and bigger hotel properties, respectively. As there were only few hotel
properties having less than 30 rooms the cut off point of 60 rooms was also used in
this study for distinguishing between small and large hotel properties.
When inquired about their motivations for implementing CRM (Table 2),
although all hotels declared a customer-centric approach to CRM implementation,
small and large hotels signi?cantly differ in some speci?c motives, which clearly
indicate hotels’ different operational problems and managerial situation. Analyti-
cally, all respondents claimed that enhancing service quality and so, customer
satisfaction and loyalty are the most important reasons for pursuing CRM, while
they reported less importance in implementing CRM for increasing employee
satisfaction and/or reducing costs. However, a t-test revealed that large hotels
ARTICLE IN PRESS
Table 4
Informal/non-computerised ways of information collection and storage
Personal data Aspects of hotel
stay
Complaints
opinions
1–60
rooms
(%)
61+
rooms
(%)
1–60
rooms
(%)
61+
rooms
(%)
1–60
rooms
(%)
61+
rooms
(%)
Gather guest information
through guests observations
and/or interactions
87 11 98 75 68 57
Store guests information in
business books and/or ?les
97 38 99 21 99 23
M. Sigala / Hospitality Management 24 (2005) 391–413 403
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Table 5
Use and value of guest information for external marketing
The extent to which the use of the
stored guest information helped:
(1 not at all—5 very much)
1–60 rooms SD 61+rooms SD t-value p Do not do it
1–60 rooms 61+ rooms
Understanding guests needs and
requirements
3.41 1.09 3.82 1.1 2.305 0.022* 0 0
Product development and innovation 3.78 1.08 4.56 1.32 2.671 0.027* 0 0
Personalising promotion and
communication strategies
3.6 1.45 4.23 0.87 2.893 0.028* 27 5
Personalising staff-guests encounters 3.51 1.13 3.85 0.89 1.001 0.132 1 2
Developing frequent, loyalty and
reward programmes
4.00 41 42
Personalising guests—ICT
interactions
3.00 41 42
Enhancing customer service 3.10 1.16 3.65 0.99 3.372 0.001* 0 0
Enhancing internal communication 2.10 0.81 3.40 1.07 4.001 0.000 0 0
Personalising reservation process 3.44 1.15 3.66 1.04 2.046 0.041* 1 2
Personalising pricing/yield
management strategies
3.98 1.21 3.20 9 42
Identifying and handling guests’
complaints
3.91 0.99 4.02 1.23 0.251 0.802 0 0
Developing af?liate marketing
strategies with other partners
41 43
*Indicates signi?cance at a ¼ 0:05:
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
4
0
4
perceived signi?cantly higher than smaller hotels the value of CRM implementation
for ‘‘reducing costs’’, ‘‘guests’ complaints’’ and ‘‘improving processes’’. This ?nding
indicates that CRM in large hotels is greatly driven by a need to streamline and
ARTICLE IN PRESS
Table 6
CRM internal relationship determinant factors
Indicate the importance of the
following factors for successful
CRM implementation (5 point
scale, irrelevant–essential)
1–60
rooms
SD 61+
rooms
SD t-value p
Autonomous and/or
interdepartmental teams
2.42 1.14 3.61 1.04 4.03 0.000*
Assignment of a knowledge/
information of?cer
2.31 1.03 3.34 1.12 3.85 0.002*
Organizational culture 4.04 1.02 4.34 0.87 0.852 0.872
Organizational structure 2.99 1.02 3.30 1.31 1.032 0.056
Structural factors/external
conditions
4.02 1.23 4.12 1.09 2.041 0.991
ICT 2.21 1.06 4.02 0.67 4.967 0.000*
Staff motivation 4.04 0.67 4.23 0.71 1.962 0.978
Staff multi-skilling 4.32 1.21 3.98 0.95 3.032 0.035*
Staff empowerment 2.76 1.23 3.34 1.06 2.945 0.029*
Staff quali?cation 2.04 1.07 2.54 1.11 1.968 0.938
Staff social and communication
skills
4.05 0.86 4.24 0.65 1.095 1.006
Top management support 4.44 0.78 4.56 0.79 1.112 0.995
Training, seminars, further
education
4.03 0.98 4.13 0.98 1.028 1.300
Rewards 4.61 0.77 4.54 0.83 0.984 1.395
*Indicates signi?cance at a ¼ 0:05:
17
78
56
93
2
26
60
91
93
28
0 20 40 60 80 100
Rewards
Promotions
Expansion of activities and
responsibilities
Visualisation of success, e.g.
feedback
Seminars & training
% of hotels
61 + rooms 1- 60 rooms
Fig. 2. Human resource motivation strategies.
M. Sigala / Hospitality Management 24 (2005) 391–413 405
integrate fragmented, disconnected processes and guests’ information for enabling:
enhanced monitoring/control and improvement of processes; handling and reduction
of guests’ complaints; and reduction of errors’ costs.
The latter was also con?rmed during telephone conversations whereby inter-
viewees reported that CRM enabled the formalisation and standardisation of
guest—staff encounters and service processes. This was achieved by using guest
information for updating and writing the standard operational procedures, which
were in turn used for staff training, development and induction purposes as well as
for identifying problematic areas. According to one interviewee CRM was viewed as
a way to incorporate the ‘‘voice of the guest’’ into the operational procedures and to
fostering the ‘‘guest listening and learning’’ hotel. However, the frequency for
updating these documents varied among respondents. Only one interviewee
mentioned that standard operational procedures manuals are reviewed and updated
every summer season, while two others mentioned that reviews are done
occasionally. On the other hand, in smaller hotels, the need to use CRM for
monitoring and managing service encounters and guests’ requirements/complaints
was not reported as very important. This is not surprising when considering that
hotel managers (who are also frequently the hotel owners) are always ‘‘on the hotel
?oor’’. Indeed, all three small hotels claimed that guests’ complaints/requests as well
as ‘‘stories/experiences’’ are always discussed amongst staff and them in the form of
informal and ‘‘gossiping’’ discussions. However, although this personalisation of
guest information is an effective way for ‘‘learning’’ the guest and acting upon his
requests/preferences, it does not allow for wide guest knowledge dissemination but
only for selected staff ‘‘networks’’. To address this, small hotel managers/owners
claimed that developing and maintaining good and personal relationships with hotel
staff is an effective way for participating in such ‘‘gossiping’’ conversations and later
motivating staff to act upon guest requests. Managers/owners also reported that it
was important that they learned about their guests, as it was dif?cult to keep the
ARTICLE IN PRESS
93
78
90
95
100
67
84
93
86
91
0 20 40 60 80 100 120
errors are tolerated up to a certain
extent
our employees act and learn
autonomously
our employees are encouranged to
exchange knowledge
a common language isused
openess and trust have high value
% of hotels
61 + rooms 1 - 60 rooms
Fig. 3. Characteristics of organisational culture contributing to CRM success.
M. Sigala / Hospitality Management 24 (2005) 391–413 406
same staff for more than one summer operating season. Another small hotel owner
also claimed that she had to act as the ‘‘middlemen’’ between back-of?ce
(immigrant) and front-of?ce staff that did not want to socialise or even talk together.
Table 3 provides data regarding respondents’ ICT availability and information
management activities. Data reveal that apart from the wide availability of a hotel
website, small (1–60 rooms) hotels are less computerised than large hotels (61+
rooms). This implies that small properties have fewer possibilities for gathering,
storing and disseminating guest information electronically. Previous research also
indicated that the number of ICT applications in the hotel sector is positively
dependent on hotel size (Siguaw et al., 2000), while other studies provided evidence
of the existence of a threshold level of ICT investment that is also dependent on
business size (Weill, 1992; Sigala, 2003c). Findings also revealed that hotels have a
very fragmented ICT infrastructure. The low integration levels between the different
ICT systems and the customer database indicate that even when ICT is available
there is no seamless transferability and accessibility of guest information to different
ICT applications and hotel staff. As a result, several manual, laborious and time-
consuming data entries and retrieval are required.
A clear pattern also emerges regarding the use of ICT systems for the collection of
different types of guest information. Hotels tend to heavily use: reservation,
distribution and M&S systems for collecting personal data regarding their guests;
EPOS for gathering aspects of hotel stay; and customer databases, the website and
the M&S systems for collecting guests’ complaints and feedback. Hence, several
opportunities of gathering guest information are being lost (e.g. gather guest
behaviour and preferences through website ‘‘cookies’’ technologies, guests’
preferences on TV programmes mini-bars, etc).
Hotels also reported that they heavily collect guest information by observing and
interacting with guests and then store data into books and other ?les (Table 4). The
latter was reported more frequently by small than large hotels. However, manual
collection and storage of guest data limits large hotels’ ability to disseminate and
share information across staff, hotel properties and time. Interviewees from small
hotels highlighted again the need to gather guest information in informal and
personalised ways, while large hoteliers noted that although all staff is motivated to
gather information, fewer staff store information in databases. Hoteliers claimed
that this was mainly due to the fact that data collection is considered as a
‘‘competitive race’’ among staff, who perceive guest information as a technique for
personalising the quality of their services and getting higher tips or promotions.
Consequently, staff are reluctant to share guest information with colleagues. This
coupled with the high labour turnover in hotels signi?cantly impacted in CRM
implementation. However, respondents from small hotels did not feel that staff
turnover posed problems in information sharing and gathering, because they usually
develop ‘‘family’’, informal and long-term employment relationships with their staff.
On the other hand, in small hotels personalising guest experiences and increasing
guest satisfaction is not viewed as a staff incentive and motivation, as staff are
inherited with the problem of no ‘‘promotion’’ in small hotels (that are very
?at organisations with owners almost always being the managers). However,
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 407
respondents generally agreed that staff was usually reluctant to share and report
information and ideas when these involved changes in their daily routines or may
increase in their work load. Finally, few respondents also highlighted staff inability
to understand which knowledge is required and how it can be integrated into their
daily operations.
Table 5 provides data regarding the use and importance of guest databases for
developing external relationship marketing strategies in respondents’ hotels.
Generally, ?ndings revealed that guest databases are not exploited for developing
frequent, loyalty and reward programmes, personalising guests-ICT encounters and
af?liate marketing. Consequently, numerous opportunities for fully exploiting guest
data (e.g. welcome message in TV sets, personalised website content/reservation
process) are missed. Moreover, t-tests revealed that the importance of guest
databases was perceived stronger in large rather than small for the following
practices: understand guests’ needs and requirements; product development and
innovation; personalising promotion and communication strategies; enhancing
customer service; and personalising the reservation process. This is not surprising
when considering the greater number of guests/staff and high labour turnover that
large hotels have to address daily. Indeed, all telephone interviewees highlighted the
need to adopt and use ICT for minimizing the loss of intangible knowledge assets
due to high staff turnover and providing a way of accessing/sharing organisational
knowledge amongst their properties and operating seasons. On the contrary, in small
hotels personalisation of hotel rates and guests’ services is guaranteed by the owner
who is always present and ‘‘remembers’’ his/her frequent guests.
Findings regarding the human resource practices of respondents also con?rmed
several of the previous ?ndings (Table 6). Overall, organisational structure, staff
motivation, social and communication skills rather than quali?cations, top
management support and rewards were perceived as the most important internal
relationship factors contributing to CRM success. However, some differences
between large and small hotels were found once again. Staff multi-skilling was noted
as more important in small than large hotels, while respondents from large hotels
gave signi?cantly higher importance to ICT on CRM success. Autonomous and
interdepartmental teams and knowledge of?cers were considered as more crucial in
large than small hotels. Interviewees also claimed that multi-skilling is more dif?cult
to achieve in large properties as a minimum number of staff is required in certain
departments. On contrary, boundary spanning teams are more valuable in large
hotels. Small hotels reported that it was easier to rotate staff in different
positions and they usually required staff to change between posts, e.g. breakfast
service, reception and bar area. However, staff rotation may also be related to the
star-category of hotel respondents, since small hotels represented low category
properties that need to provide fewer services, e.g. not a 24 h reception or a cafe´ /bar
service.
Overall, the importance of organisational aspects on CRM success is highlighted
by a substantial majority of the respondents. Speci?cally, concerning staff
motivation (Fig. 2) the most heavily used motives reported to be the visualisation
of success, promotion and expansion of activities and responsibilities, while rewards
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 408
and seminars/training were reported less frequently particularly amongst small
properties. However, since staff social and communication skills were previously
reported as crucial determinants of CRM success, hotels should consider staff
training and rewards more seriously. Respondents also highlighted the importance
of all CRM culture characteristics on instilling employee empowerment (Fig. 3).
However, some differences between small and large properties were also noted.
Small hotels gave more weight on the existence of openness, trust and tolerance for
errors than large hotels. Interviewees contributed this to the fact they are frequently
very closely related to their staff and so, it is more dif?cult for them to practice more
formal managerial procedures. Moreover, because owners of small properties
frequently want to give a personal touch and way of running their hotels as well as
prefer to act and behave on their own style, they are more reluctant to release staff
autonomy. According to an owner, she viewed the hotel as ‘‘an extension of her
house’’ and so hotel decoration, quality and operations were treated with a personal
?air and interest. Another owner’s claim revealed more patriarchal and authoritative
management styles: ‘‘this is my business and I want to serve guests according to my
personal spirit and character. I do not want my employees behave on their way’’.
However, such approaches may sometimes inhibit staff empowerment and
innovativeness.
6. Conclusions, discussion and recommendations
The service industry is undergoing remarkable developments. Marketing strategies
shift from acquisition to customer retention; product strategies are built around
customisation; the internal organisation is reengineered around customer focused
processes; and ICT is applied to gain customer insight, build relationships, enable
customisation and provide new opportunities for service distribution. CRM is a
crucial strategy for sustaining competitive advantage in the current marketplace.
However, theory has been unsuccessful to provide so far an overall framework on
how businesses can better adopt and implement CRM. This paper developed a
model for CRM implementation, which instead of overstating the role of ICT, it
suggests that an integrated managerial approach among three areas namely ICT,
relationship and knowledge management, should be adopted. The applicability and
value of this approach is illustrated by several examples and cases from the
international hotel industry.
Moreover, data from the Greek hotel sector provided evidence that ICT is not the
panacea and the exclusive CRM determinant factor. So, ICT are more important in
large than small hotels, while other organisational and managerial factors such as
culture, staff motivation and development also play a vital role on CRM’s success.
CRM implementation may also be driven and so affected by different (strategic)
motivations. Indeed, CRM in small hotels was found to frequently adopt the
owner’s/manager’s personal style and ?air, whereas in large properties CRM is
usually viewed as a way for formalising processes, enhancing customer service and
reducing costs. However, because such a patriarchal and authoritarian leadership
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 409
style of hotel managers sanctions open knowledge transfer, it is imperative that hotel
managers establish knowledge oriented leadership, foster empowerment and
minimise hierarchical boundaries. To generate knowledge and empower employees
to identify and solve problems, hotels can also learn and bene?t from small hotels.
The ‘‘institutionalised’’ informal and ‘‘gossiping’ way for sharing guest information
and commenting on staff experiences may also be an effective and personalised way
for disseminating knowledge in large hotels.
Analytically, although hotels have traditionally perceived codi?cation and
personalisation of knowledge as opposing knowledge strategies, evidence has
revealed that personalisation, codi?cation and digitisation of guest knowledge can
co-exist as a hybrid solution. This is because tacit knowledge and skills (embedded in
service routines) can only be transferred in direct personal relationships, while ICT is
only effective for the effective storage and dissemination of explicit knowledge.
Similar to the quality circles, the informal networks and ‘‘gossiping’’ discussions
groups in small hotels, hotels can institutionalise knowledge circles between
employees that enable them to discuss problems, insights and new ideas. In turn,
this can increase the transactive memory and lead to meetings with experts that can
further transfer more tacit knowledge. Moreover, input regarding new challenges
and ideas, as well as commitment and maybe leadership from hotel management into
knowledge circles can further promote learning and staff motivation.
As in any study, the ?ndings present some limitations, but which in turn identify
and provide ideas and directions for conducting future research. So, although
respondents represented a representative sample of the Greek hotel sector, the small
and convenience sample that was used eliminates the possibilities for generalising
?ndings to the whole Greek hotel industry. Moreover, although the data collection
methods guaranteed the return of a respectable number of usable questionnaires,
they did not allow for the collection of more qualitative data. Some in-depth
information was gathered through telephone conversations, but that was not always
easy and feasible since respondents were busy and the limit of the 30 min telephone
call had to be respected. Finally, ?ndings revealed and represent the perceptions and
opinions of hotel managers/owners only and not of a wide sample of different
operational and managerial hotel staff.
In this vein, future research of a greater sample scale and qualitative data nature is
required. A topic of great interest that future studies could investigate is the
implications of CRM and KM strategies on hotel staff skills, competencies and
working environment. As such skills may also differ depending on the hotel
characteristics, opportunities to conduct more in-depth research into the ?eld of
small business management are also revealed. The different styles as well as
the motives behind CRM implementation in the two different hotel sets also
suggest that studies and theories in entrepreneurship can signi?cantly contribute to
the body of knowledge regarding CRM implementation. Cross -industry and -sector
research is also valuable for examining the impact of any cultural and contextual
factors on CRM implementation. Future research can also be enhanced by
gathering and comparing data from a multi-level and multi-departmental sample
of hotel staff.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 410
References
Adebanjo, D., 2003. Classifying and selecting e-CRM applications: an analysis based proposal.
Management Decision 41 (6), 570–577.
Alford, P., 2001. eCRM in the travel industry. Travel and Tourism Analyst 1 (1), 57–76.
Berry, L., 1983. Relationship marketing. In: Berry, L., Shostack, GL., Upah, GD. (Eds.), Perspectives in
Services Marketing. American Marketing Association, Chicago, pp. 89–123.
Bitner, M.J., 1995. Building service relationships: it’s all about promises. Journal of the Academy of
Marketing Science 23 (4), 246–251.
Bouncken, R., 2002. Knowledge management for quality improvements in hotels. In: Bouncken, R., Pyo,
S. (Eds.), Knowledge Management in Hospitality and Tourism. The Haworth Hospitality Press,
Binghampton, NY, pp. 25–59.
Buttle, F., 1996. Relationship Marketing: Theory and Practice. Chapman&Hall, London.
Christopher, M., Payne, A., Ballantyne, D., 1991. Relationship marketing: bringing quality, customer
service and marketing together. Butterworth-Heinemann, Oxford.
Christou, E., 2003a. On-line buyer’s trust in a brand and the relationship with brand loyalty: the case of
virtual travel agents. Tourism Today 3 (1), 95–105.
Christou, E., 2003b. Guest loyalty likelihood in relation to hotels’ corporate image and reputation: a study
of three countries in Europe. Journal of Hospitality and Leisure Marketing 10 (4), 85–99.
Christou, E., Kassianidis, P., 2003. Consumer perception and adoption of online buying for travel
products. Journal of Travel and Tourism Marketing 12 (4), 93–107.
Cline, R., Warner, M., 1999. Hospitality 2000: the Technology a Global Survey of the Hospitality
Industry’s Leadership. Arthur Andersen Consultancy, New York.
Corner, I., Hinton, M., 2002. Customer relationship management systems: implementation risks and
relationship dynamics. Qualitative Market Research: An International Journal 5 (4), 239–251.
Couldwell, C., 1998. A data day battle. Computing 21, 64–66.
Davenport, T., Prusak, L., 1988. Working Knowledge. Harvard Business School Press, Boston, MA.
Dev, C., Olsen, M.D., 2000. Marketing challenges for the next decade. Cornell Hotel and Restaurant
Administration Quarterly February, 41–47.
Dodds, B., 2001. CRM at no charge. www.dmreview.com/master.cfm?NavID=193&EdID=3477
[Accessed 11/07/01].
Dube, L., Renaghan, LM., 2000. Creating visible customer value. Cornell Hotel and Restaurant
Administration Quarterly February, 62–72.
Earl, M., Scott, I., 1999. What is a chief knowledge of?cer. Sloan Management Review Winter, 29–38.
Gilmore, J.H., Pine, J., 1997. The four faces of mass customization. Harvard Business Review 75 (1),
91–101.
Gronroos, C., 1994. Quo vadis, marketing? Toward a relationship marketing paradigm. Journal of
Marketing Management 10 (3), 347–360.
Gummesson, E., 1990. The Part-time Marketer. Centre for Service Research, Karlstad.
Gupta, A., Govindarajan, V., 2000. Knowledge Management’s social dimension: lessons from Nucor steel.
Sloan Management Review 42 (1), 71–80.
Hart, C.H.L., 1995. Mass customisation: conceptual underpinnings, opportunities and limits. Inter-
national Journal of Service Industry Management 6 (2), 36–45.
Heskett, J.L., Sasser, W.E., Hart, C.W.L., 1990. Service Breakthroughs. Free Press, New York.
Kalakota, R., Robinson, M., 2000. E-business: the Roadmap to Success. Addison-Wesley Publishing
Company, Reading, MA.
Loftness, M., 2001. Once you have caught it, what are you going to do with it? Hospitality Upgrade
[accessed 8 August 2001, www.hospitalityupgrade.com].
Malhotra, Y., 1998. Deciphering the knowledge management hype. Journal for Quality and Participation
21 (4), 58–60.
Massey, A., Montoya-Weiss, M., Holcom, K., 2001. Reengineering the customer relationship: leveraging
knowledge assets at IBM. Decision Support Systems 32 (2), 155–170.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 411
Mok, C., Stutts, A., Wong, L., 2000. Mass customisation in the hospitality industry: Concepts and
applications. In: Proceedings of the Fourth International Conference, Tourism in Southeast Asia and
Indo-China: Development Marketing and Sustainability, 24–26 June 2000, Singapore, pp. 123–139.
Olsen, M.D., Connolly, D.J., 2000. Experience-based travel. How technology is changing the hospitality
industry. Cornell Hotel and Restaurant Administration Quarterly February, 30–40.
Palmer, A., McMahon-Beattle, U., Beggs, R., 2000. A structural analysis of hotel sector loyalty
programmes. International Journal of Contemporary Hospitality Management 12 (1), 54–60.
Park, C., Kim, Y., 2003. A framework of dynamic CRM: linking marketing with information strategy.
Business Process Management Journal 9 (5), 652–671.
Paylopoulos, P., 1999. The size and capacity of the Greek tourism industry. Research study, Research
Institute for Tourism (RIT), Athens, Greece.
Reichheld, F., 1996. The Loyalty Effect: the Hidden Force Behind Growth, Pro?ts and Lasting Value.
Harvard Business School Press, Boston.
Rheault, D., Sheridan, S., 2002. Reconstruct your business around the customer. The Journal of Business
Strategy 23 (2), 101–109.
Rigby, D., Reichheld, E., Schefter, P., 2002. Avoiding the four perils of CRM. Harvard Business Review
80 (2), 101–109.
Romano, A., 2000. Customer relations management in information systems research. In: Chung, H. (Ed.),
Proceedings of the Americans Conference in Information Systems (AMCIS), 10–13 August,
pp. 811–819.
Sigala, M., 2003a. Competing in the virtual marketspace: a strategic model for developing e-commerce in
the hotel industry. International Journal of Hospitality Information Technology 3 (1), 43–60.
Sigala, M., 2003b. Developing and benchmarking internet marketing strategies in the hotel sector in
Greece. Journal of Hospitality and Tourism Research 27 (4), 375–401.
Sigala, M., 2003c. The information and communication technologies productivity impact on the UK hotel
sector. International Journal of Operations and Production Management 23 (10), 1224–1245.
Sigala, M., Christou, E., 2002. The transformative power of e-commerce on hotel brands. In: Proceedings
of the Annual European Council for Hotel, Restaurant and Institutional Education (Euro-CHRIE)
Conference, Cross-cultural Challenges in the Tourism Industry, Escola Universitaria St. Ignasi,
Barcelona, Spain, 31 October–1 November, 2002.
Sigala, M., Connolly, D., 2004. In search of the next big thing: IT issues and trends facing the hospitality
industry: a review of the Sixth Annual Pan-European Hospitality Technology Exhibition and
Conference (EURHOTEC 2001); International Hotel and Restaurant Association, 19–21 February
2001. Palais Des Congress, Paris, France; Tourism Management 25 (6), 807–809.
Sigala, M., Lockwood, A., Jones, P., 2001. Gaining advantage from yield management: strategic
implementation in the rapidly developing world of IT. International Journal of Contemporary
Hospitality Management 17 (3), 364–377.
Siguaw, J.A., Enz, C.A., 1999. Best practices in marketing. Cornell Hotel and Restaurant Administration
Quarterly October, 31–59.
Siguaw, J.A., Enz, C.A., Namasivayam, K., 2000. Adoption of information technology in US hotels:
strategically driven objectives. Journal of Travel Research 39 (2), 192–201.
Stefanou, C., Sarmaniotis, C., Stafyla, A., 2003. CRM and customer-centric knowledge management: an
empirical research. Business Process Management Journal 9 (5), 617–634.
Sveiby, K.E., 2000. What is knowledge management? [accessed 19/9/03 www.sveiby.com.au/Knowledge.
Management.html].
Thomson, B., 2002. What is CRM. www.crmguru.com/members/primer/01.html [accessed 01/07/01].
Tiwana, A., 2001. The Essential Guide to Knowledge Management: e-business and CRM Applications.
Prentice-Hall, Englewood Cliffs, NJ.
Weill, P., 1992. The relationship between investment in IT and ?rm performance: a study of the valve
manufacturing sector. Information Systems Research 3 (4), 307–333.
Wells, J.D., William, L.F., Choobineh, J., 1999. Managing information technology for one-to-one
customer interaction. Information and Management 35 (1), 53–62.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 412
Winer, R., 2001. A framework for customer relationship management. California Management Review 43
(4), 89–106.
Zack, M.H., 1999. Developing a knowledge strategy. California Management Review 41 (3), 125–145.
Marianna Sigala, B.Sc., Pg Dipl, M.Sc., Ph.D., is a Lecturer of Operations and Production Management
at the Department of Business Administration at the University of the Aegean, Greece. Her interests
include productivity and service quality management, Information and Communication Technologies
(ICT) applications in tourism and hospitality operations, strategy and education. Before joining the
University of the Aegean, she had been lecturing at the Universities of Strathclyde, Westminster and
Surrey in the UK. She has professional experience from the hospitality industry in Greece, while she has
also contributed to several international research and consultancy projects. Her work has been published
in several journals and international conferences and awarded with several ‘‘Best Papers Awards’’. She is
the co-chair of the Euro-CHRIE Special Interest Group (SIG) in ICT in Hospitality and she currently
serves at the Board of Directors of Euro-CHRIE and IFITT.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 413
doc_938941311.pdf
As travelers are becoming more price sensitive, less brand loyal and more sophisticated, Customer Relationship Management (CRM) becomes a strategic necessity for attracting and increasing guests’ patronage. Although CRM in hospitality has overstated the importance ofICT, it is now widely recognised that successful CRM implementation should effectively combine and align ICT functionality with business operations
Hospitality Management 24 (2005) 391–413
Integrating customer relationship management in
hotel operations: managerial and operational
implications
Marianna Sigala
Ã
Department of Business Administration, University of the Aegean, 82100 Chios, Greece
Abstract
As travelers are becoming more price sensitive, less brand loyal and more sophisticated,
Customer Relationship Management (CRM) becomes a strategic necessity for attracting and
increasing guests’ patronage. Although CRM in hospitality has overstated the importance of
ICT, it is now widely recognised that successful CRM implementation should effectively
combine and align ICT functionality with business operations. Given the lack of a widely
accepted framework for CRM implementation, this paper proposed a model for managing
and integrating ICT capabilities into CRM strategies and business processes. The model
argues that successful CRM implementation requires the management and alignment of three
managerial processes: ICT, relationship (internal and external) and knowledge management.
The model is tested by gathering data from Greek hotels, while ?ndings provide useful
practical implications and suggestions for future research.
r 2004 Elsevier Ltd. All rights reserved.
Keywords: Customer relationship management; Model; Implementation; Hotel industry
1. Introduction
Information and Communication Technologies (ICT) crucially impact on
travellers’ knowledge, attitudes and behaviour. The increased online price/product
ARTICLE IN PRESS
www.elsevier.com/locate/ijhosman
0278-4319/$ - see front matter r 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.ijhm.2004.08.008
Ã
Tel.: +30 2310 801615; fax: +30 2310 801625.
E-mail address: [email protected] (M. Sigala).
transparency and the new e-business models (e.g. online auctions) enhance tourists’
purchasing power, who are becoming more price sensitive, less brand loyal, more
sophisticated and experience seekers (Gilmore and Pine, 1997; Sigala and Christou,
2002; Sigala, 2003a; Christou, 2003a; Christou and Kassianidis, 2003). The hotel
industry is also experiencing increased globalisation, competition, higher customer
turnover, growing customer acquisition costs and rising customer expectations,
meaning that hotels’ performance and competitiveness is signi?cantly dependent on
their ability to satisfy customers ef?ciently and effectively (e.g. Olsen and Connolly,
2000; Gilmore and Pine, 1997). To enhance pro?tability and guest loyalty, hotels
must nowadays focus on implementing Customer Relationship Management (CRM)
strategies that aim to seek, gather and store the right information, validate and share
it throughout the entire organisation and then use it throughout all organisational
levels for creating personalised, unique guests’ experiences (Sigala and Connolly,
2004; Olsen and Connolly, 2000; Siguaw and Enz, 1999).
Since ICT are a major catalyst for developing one-to-one experiences and
implementing CRM strategies, CRM in the hospitality industry has been primarily
de?ned by the myriad of ICT suppliers that overstate ICT’s role. Consequently,
many hotels have dif?culty in implementing effective CRM strategies, because they
allow software vendors to drive their approach to CRM, or retro?t a CRM strategy
to match the CRM technology they have purchased. However, CRM is not a
technology problem but a business problem that requires ICT tools and functionality
to be aligned, designed and effectively co-ordinated along with the business
operations and strategy. Indeed, several CRM projects have failed due to the lack of
robust implementation approaches and measurement tools, the bad exploitation and
integration of ICT tools with processes, people and business strategies as well as the
inappropriate ICT and business re-engineering and management practices (Rigby et
al., 2002; Corner and Hinton, 2002; Rheault and Sheridan, 2002). In the lack of a
widely accepted framework for effective CRM implementation (Adebanjo, 2003),
this paper aims to develop a model for managing and integrating ICT capabilities
into CRM strategies and business operations. To that end the concept, aims and
crucial factors for implementing CRM in general as well as in the hotel industry are
analysed and summarised into a model that integrates three crucial managerial
processes: knowledge, relationships and ICT management. The model’s usefulness
and applicability in the hospitality sector are illustrated by gathering data from
Greek hotels. Managerial implications, suggestions for improving CRM strategies
and directions for future research are also provided.
2. CRM: concept and implementation
CRM has its roots in relationship marketing inaugurated by the in?uential work
by Berry (1983) and Christopher et al. (1991). Relationship’s marketing rational is to
enhance long-term pro?tability by moving from transaction-based marketing and its
prominence in attracting new customers, to customer retention by means of effective
management of customer relationships (Christopher et al., 1991; Heskett et al., 1990;
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 392
Reichheld, 1996). Literature on CRM highlights the diffusion of relationship
marketing practices into organisation-wide operations and multiple customer touch
points with the aim to identify and understand individual customers’ requests and
then customising/personalising customer services. The organisation-wide and
multiple processes of the CRM effects as well as the vital ICT role are easily traced
in the CRM de?nition. Kalakota and Robinson (2000) de?ned CRM as an
integrated sales, marketing and service strategy that prevents ‘‘lone showmanship’’
and relies on coordinated actions. Dodds (2001) argued that CRM is about servicing
customers better across the entire organisation, while CRM experts (Thomson, 2002)
asserted that CRM is a customer-centric business philosophy and culture that
sustains effective marketing, sales and service processes. Couldwell (1998) de?ned
CRM as a combination of business processes and technology.
At a lower tactical/operational level, CRM implementation is found to require the
following procedural steps (Winer, 2001; Kalakota and Robinson, 2000; Loftness,
2001): creation and data mining of a database of customer activity; use of data
analysis for deciding about which customers to target, how to target, contact and
build relationships with them; development of personalised customer experiences;
channel management for enabling ef?cient share of guest knowledge across the
organisation, so that guests can get personalised and consistent service at anytime,
anyplace, anywhere, any platform; management of privacy issues; and development
and gathering of metrics for measuring CRM success.
To achieve all these, businesses may need to undertake major organisational
changes and transformations at a higher level, whose identi?cation has generated
wide interest and in-depth debates. Wells et al. (1999) identi?ed four key elements for
CRM implementation: business process analysis; integration and redesign of
customer data; ICT enabled customer interaction; accessibility/transmission of
organisational information. Hart (1995) highlighted the importance of building
organisational/operational ?exibility and a process technology that would enable
product/service customisation as well as stressed the need of a marketing department
that would support the identi?cation and analysis of customer needs. To achieve
these, Gronroos (1994) emphasised that businesses should be managed from a
process rather than a functionalistic perspective, whereas Mok et al. (2000) stressed
the importance of exploiting and adopting ICT. However, participants in a Tourism
Society’s seminar on CRM (Alford, 2001) concluded that CRM refers to a strategy
that gets together a combination of ICT tools with business processes and services,
e.g. automated call centre, customer data warehouses and data mining, customised
content, targeted banner advertising and targeted e-mail delivery. Stone’s ?ndings
(Alford, 2001) also revealed that people, customer management and detailed
measurement are the most critical elements for successful CRM, while ICT was
found to act as a CRM enabler only when the previous elements were in place.
Loftness (2001) highlighted the development of measurement processes and
organisational culture around customer satisfaction. Tiwana’s (2001) comprehensive
process for implementing knowledge-based CRM strategies stressed again the
complementary role of ICT on other business processes, while it also integrated
many of the previously identi?ed key elements for CRM implementation. Overall,
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 393
Tiwana (2001) argued that CRM implementation requires a co-ordinated manage-
ment and alignment of: strategic and operational (e)-business processes, ICT,
leadership, change, cultural and measurement strategies.
3. An integrated model for CRM implementation
Although an enormous debate has been initiated regarding the identi?cation and
the importance of different CRM implementation determinant factors, there is still
no agreed framework as to how CRM can be best applied and adopted within
organisations. However, previous debates have clearly identi?ed the major issues for
successful CRM implementation, which, coupled with the additional literature
arguments, lead to the development of an integrated model for CRM implementa-
tion. The proposed model has both a strategic and operational value, as: (a) it
identi?es the major managerial areas whereby strategic plans and/or organisational
change need to be developed; and (b) it depicts the tactical actions that the strategy
in each managerial area should address and include. Overall, CRM implementation
requires a co-ordinated and co-aligned management approach among the following
three areas.
3.1. Knowledge management (KM)
The success of relationship marketing heavily depends on the collection and
analysis of customer information that are used for developing highly personalised
offerings. Buttle (1996) pointed out that marketing problems are by nature
information handling problems. Romano (2000) and Massey et al. (2001) strongly
advocated the relation of CRM with KM and speci?cally customer KM, while the
signi?cance of customer knowledge is highlighted in several CRM studies (see review
in Stefanou et al., 2003). However, information should not be confused with
knowledge. Knowledge is produced when information is analysed and used to enable
and leverage strategic actions. Sigala (2003c) argued that this confusion has led
several businesses to make vast investments on ICT projects which have in turn
yielded marginal results. To overcome the ICT productivity paradox, hotel
management needs to embed ICT-generated customer and competitive information
into its decision-making processes. These processes involve three broad phases that
run in parallel (Tiwana, 2001) namely, information acquisition, sharing and
utilisation. Hence, the collection and creation of insights, skills, and relationships
(knowledge acquisition), when they are disseminated and shared (knowledge
sharing) are followed by integration of learning, insights and experiential knowledge
that in turn support effective decision-making processes (knowledge utilisation).
Davenport and Prusak (1988) identi?ed the following KM critical success factors:
ICT and organisational infrastructure; friendly culture for knowledge sharing,
creation and management; change in motivational practices for encouraging and
rewarding staff when information is collected, shared and used; and open
organisational structure. Malhotra (1998, p. 58) stressed the importance of ICT
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 394
for developing KM: ‘‘yICT embodies organisational processes that seek synergistic
combination of data and information processing capacity of information technologies,
and the creative and innovative capacity of human beings’’. Several other authors (Earl
and Scott, 1999; Zack, 1999) also highlighted the importance of a customer KM
strategy and the crucial leadership role that visionary knowledge of?cers should play
for bringing together all the CRM stakeholders (e.g. frontline, ?nance, ICT and
other staff) to share a common platform of beliefs, expectations and commitment.
Tiwana (2001) also stressed that a knowledge-based CRM strategy requires the
development of boundary spanning communities of practice whose members are
empowered and inspired by a culture of trust that in turn fosters cross-functional
collaboration, sharing of expertise and creation of new knowledge. Indeed, building
trust and driving out fear of knowledge management are fundamental issues for
supporting and fostering staff empowerment, as when they are established employees
are con?dent that taking risks and decisions based on new information, customer
insights and knowledge will be rewarded and not penalised. On the contrary, cultures
that do not drive out fear face two side effects: they force employees to focus on
short-term at the cost of long-term performance; and they encourage employees to
focus on the individual rather than the collective organisation.
However, Dev and Olsen (2000) reported that although hotels capture
considerable amount of customer data, those data are rarely assembled to create
useful knowledge about customers. Cline and Warner (1999) also found that the
collection and use of customer information are frequently intermittent, delayed and
fragmented. The lack of ICT applications’ integration and the legacy systems
designed along functional lines creating fragmented guests’ pro?le have been
reported as the major reason of duplication, inconsistencies, incompleteness and
inaccuracies of customer data in hotels (Sigala, 2003a). Overall, knowledge-based
CRM in hospitality requires:
a hotel culture whereby every customer interaction is perceived as a learning
experience and each customer contact as a knowledge-building opportunity and a
chance to collect new information about hotels’ guest (Olsen and Connolly,
2000);
a knowledge information system shaping the technical basis for information
accumulation, retrieval and distribution of explicit knowledge, leadership that will
motivate knowledge workers and orientation and team structures and knowledge
circles that promote the personalised transfer of tacit and explicit knowledge
(Bouncken, 2002);
incentives and rewards to staff’s efforts to capture, use and share knowledge
for personalising customer interactions/experiences (Siguaw and Enz, 1999;
Bouncken, 2002);
a redesign of customer data across the organisation and a customer-centric ICT
integration and infrastructure (Sigala, 2003b);
understanding of guests’ value drivers and requirements as well as of the ways in
which hotels contribute or fail to create customer value (Dube and Renaghan,
2000).
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 395
collection, analysis and use of three type of customer information (Park and Kim,
2003; Bouncken, 2002): information of the customer (personal and transactional
data); information for the customer (product/service/organisational information
that are perceived useful by customers); and information by the customer
(customer feedback, complaints, propositions, claims).
3.2. Relationship marketing (internal and external)
Within this new paradigm, interacting with customers and satisfying customer
needs are vitally important (Christou, 2003b). Customer relationships are not built
and sustained with direct (e)-mail themselves, but rather with the types of
programmes and communication strategies that are available and for which e-mail
may be a delivery mechanism. Winer (2001) argued that a comprehensive CRM is a
collection of integrated components such as customer service (0800 numbers,
faxback/customer comments cards, e-mail, FAQ), frequency, loyalty and reward
programmes, customisation and community building (e.g. virtual communities). The
aim of these integrated customer communication channels is to support the customer
cycle (i.e. acquisition, enhancement/cross-up-selling and retention) by identifying
pro?table customers, differentiating the services/products offered to different
markets of ones, interact with individual customers in an integrated way across
channels and customise/personalise customers’ experiences.
CRM also largely depends on staff attitudes, commitment and performance and
so, success on the external marketplace requires initial success on the internal
business by motivating and getting employees’ commitment (Gronroos, 1994).
Hence, apart from developing the four P’s of the marketing mix, a host of other
resources and as well as of front-of- and back-of-house activities should be achieved
(e.g. handling guests’ complaints and requirements) (Bitner, 1995). Although most of
the people involved in customer-invisible activities are not part of the marketing
department, their attitudes towards customers and their ways of executing their tasks
are imperative. According to Gummesson (1990), these employees must be trained to
become part-time marketers.
While the idea of maximising transactions is nothing new, what is different is that
this style of guest interaction will demand substantial conceptual skills from every
employee. Because it might be impossible to create ideal guest experiences solely
through expert systems, organisations might have to create intelligent-response
teams comprising of employees with broad knowledge bases cutting across
traditional organisations functions. For dealing with guests’ experience-related
desires, employees will be required to have advanced social skills such as
understanding of role con?ict, role theory, communications and personality
identi?cation (Olsen and Connolly, 2000). Employees will need to be content
experts who do not only know how to work with and exploit technology, but also
can manage the information exchange and match guests to experiences. Moreover,
as such knowledge-based work may take place electronically, staff should be able
and know how to work collaboratively and electronically irrespective of their spatial,
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 396
time and cultural differences. For example, on its corporate website, Wyndham
operates a virtual community and discussion forum for its women business
travellers, which requires enhanced and speci?c technocentric communications skills
(e.g. knowing the netiquette discipline) from Wyndham employees who moderate
and operate this online community. Overall, CRM calls for new job descriptions,
organisational structures, motivational thinking and reward systems.
3.3. ICT management
Data warehouses and data mining are the most popular and highly needed systems
for providing CRM capabilities or else for de?ning, developing and managing ‘‘the
segment of one’’. This is because by helping to wade through volumes of information
and decipher meaning, patterns and relationships from many seemingly unrelated
bits of data, they are necessary and valuable tools for trying to determine customer
demographics, buying patterns, market segments, contribution margins, customer
lifetime, etc. ICT is also instrumental for gathering and storing customer data (e.g.
EPOS systems, website analysis), providing ways for one-to-one interactions, e.g.
website, call centre, kiosks, etc., as well as identifying ways for disseminating and
accessing information across the organisation. However, to achieve the latter, a new
ICT infrastructure is required that would enable the creation of consolidated
customer databases and overcome limitations created by functional isolated digital
‘‘?eld-doms’’.
ICT’s supporting role for fostering business process reengineering and restructur-
ing processes around the customer is widely argued and does not stop at the
traditional organisational boundaries. Aligning the ICT with the organisational
infrastructure is critical so that the numerous systems at the customer touch points
(e.g. Internet, PMS, EPOS, CRS, etc) do not become ‘‘islands’’ of useless
information. Within the hotel sector, Sigala et al. (2001) argued the need to
integrate yield management (YM), customer databases, corporate and distribution
systems for maximising yield per individual guest during his/her business lifetime,
per distribution channel and/or per hotel chain or properties-network. Currently,
Fair?eld and LeMeridien integrated their YM and CRM systems for personalising
their rates, products, services and promotions to their frequent guests. Wells et al.
(1999) described how electronic networks allow the distribution and share of guest
databases across Ritz Carlton hotel properties allowing staff to accommodate and
treat individual guests based on preferences from previous visits. Marriott
International hotel chain installed a ‘‘Codi?cation System’’ to virtually convert
what all its employees knew about hotel day-to-day operations and standard
operational procedures in order to provide consistent customer services (Gupta and
Govindarajan, 2000). The company also designed a reward system for those who
shared, created and mobilised new knowledge relevant to the ?rm. Accor is installing
computers to their lounges for providing information access to employees, who do
not have and need computers for their operations. Similar operations are initiated in
Ritz Carlton hotels (Sveiby, 2000) for enhancing customer loyalty through detecting
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 397
and recording their guests’ special interests and requests at the ?rst time encounter
and then providing personalised attention in return visits.
3.4. Summarising
In summarising the previous arguments, Fig. 1 was developed as a graphical
representation of the proposed integrated CRM model. The ?gure identi?es: (a) the
three managerial areas and their roles/aims for implementing CRM; and (b) for each
managerial area, the operational changes and strategies that are required for
achieving the former goals. The arrows illustrate the need to align strategies among
the three managerial areas, which is also evident by the compatibility of the strategies
amongst the managerial areas. The practical applicability of the ?gure is illustrated
by example of initiatives already found in the industry.
4. Methodology
The paper aimed to develop a framework for developing CRM strategies. After
reviewing the literature, arguments are summarised into an integrated CRM model,
whose validity and value were tested by gathering data from Greek hotels.
Speci?cally, based on the model, the study investigated:
how and why Greek hotels are implementing CRM;
the CRM success implementation factors as considered by hotel managers.
A structured questionnaire was developed for gathering information regarding the
three CRM managerial areas as well as the characteristics of the hotels (including
hotel size, star- category and management arrangement, Table 1). In developing the
research questions for the KM and ICT area, the following issues were considered. It
is generally agreed that a survey investigating information management strategies
should include who—what—where—when questions, while KM investigations
should include why and how (strategic) questions. So, KM ‘‘why’’ decisions were
addressed with the questions (in Table 2) investigating the hotels’ strategic motives
for implementing CRM. For investigating the who—where—when—what questions,
hotels were required to indicate (Table 3): the ICT applications/systems used for
information acquisition, storage, retrieval and dissemination; the type of informa-
tion hotels gathered through ICT (based on Park and Kim, 2003); and the
integration of their ICT systems with organisation-wide guest data warehouses
(which actually re?ects ICT management). As in small and family run hotels,
information is frequently gathered manually (Palmer et al., 2000), a research
question was also set for investigating three options for recording/storing
information without ICT support namely ‘‘storing data in business books and ?les’’
(non-computerised), ‘‘collecting data through guests’ observation and interactions’’
(Table 4). The ‘‘how’’ questions of knowledge management were addressed by the
questions set in Table 5 that investigated how guest knowledge is used and the degree
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 398
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Knowledge Management
Role/aim: acquire, store, retrieve, analyze, disseminate data,
Why and How questions
Strategies: knowledge culture/orientation, customer-centric knowledge
information system, leadership, team structure, knowledge circles, incentives/rewards
Examples: Wyndham: financial rewards for data capture and storage, HARMONY customer
database and mining, Byrequest manager at each property
Accor : decentralized Internet-based intranet including data about best practices, services innovations and
training possibilities & schedules, films/videos, knowledge manager, open corporate culture &
decentralization
ICT Management
Role/aim: acquire, store, retrieve, analyze, disseminate data,
who – what – where – when questions
Strategies: customer-centric knowledge information system, business
reengineering, integrated internal and external systems
Examples: Wyndham: HARMONY customer database integrated with internal systems (PMS)
and externally with Internet based systems (Website) and corporate YM systems
Accor : decentralized Internet-based intranet in order to enable both internal and external integration,
business decentralized structure is facilitated with the decentralized ICT infrastructure
Relationship Marketing
Internal & External Relationship Marketing
Integration of 3 managerial areas
Internal Relationship Marketing
Role/aim: motivate and create a knowledge orientation and
Customer centric culture
Strategies: new job descriptions, part-time marketers, organizational cultures
and structures, social and communication skills online & offline
Examples: Wyndham: financial –promotional rewards, training and development
Accor : motivational strategies such as idea contests, bonuses, benchmarks, training and
knowledge circles, meetings with experts decentralized culture/structure
External Relationship Marketing
Role/aim: provision of personalized quality services in every
customer touch point at any time
Strategies: integrated and multiple communication strategies, loyalty and
frequent guest programs, community building
Examples: Wyndham: Byrequest guest loyalty program. Personalized guest communications
Business women virtual community and discussion forum
Accor : frequent guest loyalty program, personalized communications
Fig. 1. An integrated CRM model.
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
3
9
9
to which its use has improved several practices (external marketing). Hotels were
also required to indicate their use of speci?c human resource management strategies
(e.g. management style, reward systems, organisational structure and culture) and
their importance to CRM success (internal marketing, Table 6, Figs. 2 and 3).
Given the low response rate experienced in previous studies in Greece (Sigala,
2003b) and for boosting responses in this research, three methods for data collection
(postal mail, e-mail and telephone) were used for exploiting the advantages of each
method. A convenience sample of 200 hotels, drawn from the Greek National
Tourism Organisation (GNTO) hotels’ directory, was selected. Hotels were initially
telephoned in order to identify those that had initiated efforts that aimed to
personalise their offerings and build customer relationships. Quali?ed hotels were
ARTICLE IN PRESS
Table 1
Pro?le of respondents
Management arrangement 5 stars 4 stars 3 stars Total
No. (%) No. (%) No. (%) No. (%)
Independently managed 16 47 12 54 25 90 53 63
Part of a hotel chain 18 53 10 45 3 10 31 37
Total 34 100 22 100 28 100 84 100
Hotel size
1–60 rooms 8 33 14 54 19 56 41 49
61+ rooms 16 67 12 46 15 44 43 51
Total 24 100 26 100 34 100 84 100
Pro?le of telephone respondents.
Three independent properties: 14 rooms (5 stars), 27 rooms (3 stars), 45 rooms (3 stars).
Two hotels part of a chain: 150 rooms (5 stars), 459 rooms (5 stars).
Table 2
Reasons for CRM implementation (knowledge management)
Indicate the importance of each
statement to CRM
implementation (5 point scale,
irrelevant—essential)
1–60
rooms
SD 61+
rooms
SD t-value p
Increase guests’ loyalty 4.01 0.82 3.91 0.94 0.251 0.802
Increase service quality 4.32 0.76 4.12 0.97 0.054 0.164
Increase guests’ satisfaction 4.65 0.98 4.44 0.99 0.065 0.187
Process improvement 3.73 1.04 4.03 1.09 2.654 0.026*
Increase pro?tability 3.87 1.03 3.66 1.23 1.138 0.393
Reduce guests’ complaints 3.44 1.21 3.79 1.09 0.037 0.039*
Increase product quality 3.02 1.18 2.99 1.43 0.345 0.749
Reduce costs 3.29 1.17 3.65 1.10 3.28 0.001*
Increase employees’ satisfaction 2.92 1.09 2.74 1.14 1.538 0.136
*Indicates signi?cance at a ¼ 0:05:
M. Sigala / Hospitality Management 24 (2005) 391–413 400
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Table 3
ICT availability and infrastructure—Information Management—(ICT and Information Management) (% of hotels)
ICT availability Integration
with
customer
database (%)
Personal data
(%)
Aspects of
hotel stay
(%)
Complaints
opinions (%)
1–60
rooms
(%)
61+
rooms
(%)
Total
(%)
ICT in rooms division
Front of?ce system 34 86 61 44 100 2 0
Property-based reservation system
(PBRS)
32 91 62 71 100 0 0
Customer database 10 74 43 0 67 22 6
Hotel website 88 95 92 2 48 0 1
Central reservation system 0 7 4 2 100 33 0
Yield management 2 72 38 0 0 0 0
Global distribution systems 5 63 35 0 100 0 0
Marketing and sales system
(M&S)
2 65 35 75 97 48 14
Check in/out Kiosks 0 0 0 0 0 0 0
Smart cards 0 0 0 0 0 0 0
ICT in food and beverage division
Electronic point of sale systems
EPOS
7 42 25 0 0 100 0
Stock and inventory systems 0 58 30 0 0 0 0
Food and beverage (FB) 0 49 25 0 0 0 0
Conference and banqueting
systems
0 28 14 0 0 0 0
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
4
0
1
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Table 3 (continued )
ICT availability Integration
with
customer
database (%)
Personal data
(%)
Aspects of
hotel stay
(%)
Complaints
opinions (%)
1–60
rooms
(%)
61+
rooms
(%)
Total
(%)
In-room ICT
TV based services 0 26 13 0 0 0 0
In-room Internet and e-mail
access
5 21 13 0 0 0 0
On demand movies/games 10 67 39 0 0 0 0
Automated mini-bars 15 67 42 0 0 46 0
General ICT
Property management system 22 91 57 42 0 0 0
Intranet 0 7 4 0 0 33 0
Finance and accounting systems
(F&A)
2 86 45 2 0 0 0
Electronic lock systems 27 65 46 0 0 0 0
Management support systems
(MSS)
0 23 12 0
Decision support systems (DSS) 0 14 7 0
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
4
0
2
then inquired about their willingness to participate in the study and their most
convenient method for ?lling in the questionnaire, i.e. post, e-mail or telephone
(30 min conversation). Overall, 147 quali?ed and willing to participate in the study
hotels were identi?ed, of which 43 replied by mail, 36 by e-mail and nine claimed a
preference to respond via telephone. However, due to time and costs limitations,
only ?ve telephone calls were ultimately conducted, but calls were further exploited
for gathering as much as possible qualitative information. Thus, overall 84 usable
questionnaires were collected.
5. Analysis of the ?ndings
The respondents’ pro?le is provided in Table 1. Based on previous studies (Sigala,
2003b) and other governmental publications, the study’s respondents comprise a
representative sample of the Greek hotel sector, as: the majority of the hotels are
independently managed; respondents being part of hotel chains usually represent 5
star hotels; small size hotels (less than 60 rooms) concentrate on the 3 star category,
while larger-scale hotels on the 5 star. Previous studies (Sigala, 2003a) and
governmental statistics (e.g. Paylopoulos, 1999) have also revealed and indicated
that 30 and 60 rooms is a good metric for distinguishing micro/family hotels from
small and bigger hotel properties, respectively. As there were only few hotel
properties having less than 30 rooms the cut off point of 60 rooms was also used in
this study for distinguishing between small and large hotel properties.
When inquired about their motivations for implementing CRM (Table 2),
although all hotels declared a customer-centric approach to CRM implementation,
small and large hotels signi?cantly differ in some speci?c motives, which clearly
indicate hotels’ different operational problems and managerial situation. Analyti-
cally, all respondents claimed that enhancing service quality and so, customer
satisfaction and loyalty are the most important reasons for pursuing CRM, while
they reported less importance in implementing CRM for increasing employee
satisfaction and/or reducing costs. However, a t-test revealed that large hotels
ARTICLE IN PRESS
Table 4
Informal/non-computerised ways of information collection and storage
Personal data Aspects of hotel
stay
Complaints
opinions
1–60
rooms
(%)
61+
rooms
(%)
1–60
rooms
(%)
61+
rooms
(%)
1–60
rooms
(%)
61+
rooms
(%)
Gather guest information
through guests observations
and/or interactions
87 11 98 75 68 57
Store guests information in
business books and/or ?les
97 38 99 21 99 23
M. Sigala / Hospitality Management 24 (2005) 391–413 403
A
R
T
I
C
L
E
I
N
P
R
E
S
S
Table 5
Use and value of guest information for external marketing
The extent to which the use of the
stored guest information helped:
(1 not at all—5 very much)
1–60 rooms SD 61+rooms SD t-value p Do not do it
1–60 rooms 61+ rooms
Understanding guests needs and
requirements
3.41 1.09 3.82 1.1 2.305 0.022* 0 0
Product development and innovation 3.78 1.08 4.56 1.32 2.671 0.027* 0 0
Personalising promotion and
communication strategies
3.6 1.45 4.23 0.87 2.893 0.028* 27 5
Personalising staff-guests encounters 3.51 1.13 3.85 0.89 1.001 0.132 1 2
Developing frequent, loyalty and
reward programmes
4.00 41 42
Personalising guests—ICT
interactions
3.00 41 42
Enhancing customer service 3.10 1.16 3.65 0.99 3.372 0.001* 0 0
Enhancing internal communication 2.10 0.81 3.40 1.07 4.001 0.000 0 0
Personalising reservation process 3.44 1.15 3.66 1.04 2.046 0.041* 1 2
Personalising pricing/yield
management strategies
3.98 1.21 3.20 9 42
Identifying and handling guests’
complaints
3.91 0.99 4.02 1.23 0.251 0.802 0 0
Developing af?liate marketing
strategies with other partners
41 43
*Indicates signi?cance at a ¼ 0:05:
M
.
S
i
g
a
l
a
/
H
o
s
p
i
t
a
l
i
t
y
M
a
n
a
g
e
m
e
n
t
2
4
(
2
0
0
5
)
3
9
1
–
4
1
3
4
0
4
perceived signi?cantly higher than smaller hotels the value of CRM implementation
for ‘‘reducing costs’’, ‘‘guests’ complaints’’ and ‘‘improving processes’’. This ?nding
indicates that CRM in large hotels is greatly driven by a need to streamline and
ARTICLE IN PRESS
Table 6
CRM internal relationship determinant factors
Indicate the importance of the
following factors for successful
CRM implementation (5 point
scale, irrelevant–essential)
1–60
rooms
SD 61+
rooms
SD t-value p
Autonomous and/or
interdepartmental teams
2.42 1.14 3.61 1.04 4.03 0.000*
Assignment of a knowledge/
information of?cer
2.31 1.03 3.34 1.12 3.85 0.002*
Organizational culture 4.04 1.02 4.34 0.87 0.852 0.872
Organizational structure 2.99 1.02 3.30 1.31 1.032 0.056
Structural factors/external
conditions
4.02 1.23 4.12 1.09 2.041 0.991
ICT 2.21 1.06 4.02 0.67 4.967 0.000*
Staff motivation 4.04 0.67 4.23 0.71 1.962 0.978
Staff multi-skilling 4.32 1.21 3.98 0.95 3.032 0.035*
Staff empowerment 2.76 1.23 3.34 1.06 2.945 0.029*
Staff quali?cation 2.04 1.07 2.54 1.11 1.968 0.938
Staff social and communication
skills
4.05 0.86 4.24 0.65 1.095 1.006
Top management support 4.44 0.78 4.56 0.79 1.112 0.995
Training, seminars, further
education
4.03 0.98 4.13 0.98 1.028 1.300
Rewards 4.61 0.77 4.54 0.83 0.984 1.395
*Indicates signi?cance at a ¼ 0:05:
17
78
56
93
2
26
60
91
93
28
0 20 40 60 80 100
Rewards
Promotions
Expansion of activities and
responsibilities
Visualisation of success, e.g.
feedback
Seminars & training
% of hotels
61 + rooms 1- 60 rooms
Fig. 2. Human resource motivation strategies.
M. Sigala / Hospitality Management 24 (2005) 391–413 405
integrate fragmented, disconnected processes and guests’ information for enabling:
enhanced monitoring/control and improvement of processes; handling and reduction
of guests’ complaints; and reduction of errors’ costs.
The latter was also con?rmed during telephone conversations whereby inter-
viewees reported that CRM enabled the formalisation and standardisation of
guest—staff encounters and service processes. This was achieved by using guest
information for updating and writing the standard operational procedures, which
were in turn used for staff training, development and induction purposes as well as
for identifying problematic areas. According to one interviewee CRM was viewed as
a way to incorporate the ‘‘voice of the guest’’ into the operational procedures and to
fostering the ‘‘guest listening and learning’’ hotel. However, the frequency for
updating these documents varied among respondents. Only one interviewee
mentioned that standard operational procedures manuals are reviewed and updated
every summer season, while two others mentioned that reviews are done
occasionally. On the other hand, in smaller hotels, the need to use CRM for
monitoring and managing service encounters and guests’ requirements/complaints
was not reported as very important. This is not surprising when considering that
hotel managers (who are also frequently the hotel owners) are always ‘‘on the hotel
?oor’’. Indeed, all three small hotels claimed that guests’ complaints/requests as well
as ‘‘stories/experiences’’ are always discussed amongst staff and them in the form of
informal and ‘‘gossiping’’ discussions. However, although this personalisation of
guest information is an effective way for ‘‘learning’’ the guest and acting upon his
requests/preferences, it does not allow for wide guest knowledge dissemination but
only for selected staff ‘‘networks’’. To address this, small hotel managers/owners
claimed that developing and maintaining good and personal relationships with hotel
staff is an effective way for participating in such ‘‘gossiping’’ conversations and later
motivating staff to act upon guest requests. Managers/owners also reported that it
was important that they learned about their guests, as it was dif?cult to keep the
ARTICLE IN PRESS
93
78
90
95
100
67
84
93
86
91
0 20 40 60 80 100 120
errors are tolerated up to a certain
extent
our employees act and learn
autonomously
our employees are encouranged to
exchange knowledge
a common language isused
openess and trust have high value
% of hotels
61 + rooms 1 - 60 rooms
Fig. 3. Characteristics of organisational culture contributing to CRM success.
M. Sigala / Hospitality Management 24 (2005) 391–413 406
same staff for more than one summer operating season. Another small hotel owner
also claimed that she had to act as the ‘‘middlemen’’ between back-of?ce
(immigrant) and front-of?ce staff that did not want to socialise or even talk together.
Table 3 provides data regarding respondents’ ICT availability and information
management activities. Data reveal that apart from the wide availability of a hotel
website, small (1–60 rooms) hotels are less computerised than large hotels (61+
rooms). This implies that small properties have fewer possibilities for gathering,
storing and disseminating guest information electronically. Previous research also
indicated that the number of ICT applications in the hotel sector is positively
dependent on hotel size (Siguaw et al., 2000), while other studies provided evidence
of the existence of a threshold level of ICT investment that is also dependent on
business size (Weill, 1992; Sigala, 2003c). Findings also revealed that hotels have a
very fragmented ICT infrastructure. The low integration levels between the different
ICT systems and the customer database indicate that even when ICT is available
there is no seamless transferability and accessibility of guest information to different
ICT applications and hotel staff. As a result, several manual, laborious and time-
consuming data entries and retrieval are required.
A clear pattern also emerges regarding the use of ICT systems for the collection of
different types of guest information. Hotels tend to heavily use: reservation,
distribution and M&S systems for collecting personal data regarding their guests;
EPOS for gathering aspects of hotel stay; and customer databases, the website and
the M&S systems for collecting guests’ complaints and feedback. Hence, several
opportunities of gathering guest information are being lost (e.g. gather guest
behaviour and preferences through website ‘‘cookies’’ technologies, guests’
preferences on TV programmes mini-bars, etc).
Hotels also reported that they heavily collect guest information by observing and
interacting with guests and then store data into books and other ?les (Table 4). The
latter was reported more frequently by small than large hotels. However, manual
collection and storage of guest data limits large hotels’ ability to disseminate and
share information across staff, hotel properties and time. Interviewees from small
hotels highlighted again the need to gather guest information in informal and
personalised ways, while large hoteliers noted that although all staff is motivated to
gather information, fewer staff store information in databases. Hoteliers claimed
that this was mainly due to the fact that data collection is considered as a
‘‘competitive race’’ among staff, who perceive guest information as a technique for
personalising the quality of their services and getting higher tips or promotions.
Consequently, staff are reluctant to share guest information with colleagues. This
coupled with the high labour turnover in hotels signi?cantly impacted in CRM
implementation. However, respondents from small hotels did not feel that staff
turnover posed problems in information sharing and gathering, because they usually
develop ‘‘family’’, informal and long-term employment relationships with their staff.
On the other hand, in small hotels personalising guest experiences and increasing
guest satisfaction is not viewed as a staff incentive and motivation, as staff are
inherited with the problem of no ‘‘promotion’’ in small hotels (that are very
?at organisations with owners almost always being the managers). However,
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 407
respondents generally agreed that staff was usually reluctant to share and report
information and ideas when these involved changes in their daily routines or may
increase in their work load. Finally, few respondents also highlighted staff inability
to understand which knowledge is required and how it can be integrated into their
daily operations.
Table 5 provides data regarding the use and importance of guest databases for
developing external relationship marketing strategies in respondents’ hotels.
Generally, ?ndings revealed that guest databases are not exploited for developing
frequent, loyalty and reward programmes, personalising guests-ICT encounters and
af?liate marketing. Consequently, numerous opportunities for fully exploiting guest
data (e.g. welcome message in TV sets, personalised website content/reservation
process) are missed. Moreover, t-tests revealed that the importance of guest
databases was perceived stronger in large rather than small for the following
practices: understand guests’ needs and requirements; product development and
innovation; personalising promotion and communication strategies; enhancing
customer service; and personalising the reservation process. This is not surprising
when considering the greater number of guests/staff and high labour turnover that
large hotels have to address daily. Indeed, all telephone interviewees highlighted the
need to adopt and use ICT for minimizing the loss of intangible knowledge assets
due to high staff turnover and providing a way of accessing/sharing organisational
knowledge amongst their properties and operating seasons. On the contrary, in small
hotels personalisation of hotel rates and guests’ services is guaranteed by the owner
who is always present and ‘‘remembers’’ his/her frequent guests.
Findings regarding the human resource practices of respondents also con?rmed
several of the previous ?ndings (Table 6). Overall, organisational structure, staff
motivation, social and communication skills rather than quali?cations, top
management support and rewards were perceived as the most important internal
relationship factors contributing to CRM success. However, some differences
between large and small hotels were found once again. Staff multi-skilling was noted
as more important in small than large hotels, while respondents from large hotels
gave signi?cantly higher importance to ICT on CRM success. Autonomous and
interdepartmental teams and knowledge of?cers were considered as more crucial in
large than small hotels. Interviewees also claimed that multi-skilling is more dif?cult
to achieve in large properties as a minimum number of staff is required in certain
departments. On contrary, boundary spanning teams are more valuable in large
hotels. Small hotels reported that it was easier to rotate staff in different
positions and they usually required staff to change between posts, e.g. breakfast
service, reception and bar area. However, staff rotation may also be related to the
star-category of hotel respondents, since small hotels represented low category
properties that need to provide fewer services, e.g. not a 24 h reception or a cafe´ /bar
service.
Overall, the importance of organisational aspects on CRM success is highlighted
by a substantial majority of the respondents. Speci?cally, concerning staff
motivation (Fig. 2) the most heavily used motives reported to be the visualisation
of success, promotion and expansion of activities and responsibilities, while rewards
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 408
and seminars/training were reported less frequently particularly amongst small
properties. However, since staff social and communication skills were previously
reported as crucial determinants of CRM success, hotels should consider staff
training and rewards more seriously. Respondents also highlighted the importance
of all CRM culture characteristics on instilling employee empowerment (Fig. 3).
However, some differences between small and large properties were also noted.
Small hotels gave more weight on the existence of openness, trust and tolerance for
errors than large hotels. Interviewees contributed this to the fact they are frequently
very closely related to their staff and so, it is more dif?cult for them to practice more
formal managerial procedures. Moreover, because owners of small properties
frequently want to give a personal touch and way of running their hotels as well as
prefer to act and behave on their own style, they are more reluctant to release staff
autonomy. According to an owner, she viewed the hotel as ‘‘an extension of her
house’’ and so hotel decoration, quality and operations were treated with a personal
?air and interest. Another owner’s claim revealed more patriarchal and authoritative
management styles: ‘‘this is my business and I want to serve guests according to my
personal spirit and character. I do not want my employees behave on their way’’.
However, such approaches may sometimes inhibit staff empowerment and
innovativeness.
6. Conclusions, discussion and recommendations
The service industry is undergoing remarkable developments. Marketing strategies
shift from acquisition to customer retention; product strategies are built around
customisation; the internal organisation is reengineered around customer focused
processes; and ICT is applied to gain customer insight, build relationships, enable
customisation and provide new opportunities for service distribution. CRM is a
crucial strategy for sustaining competitive advantage in the current marketplace.
However, theory has been unsuccessful to provide so far an overall framework on
how businesses can better adopt and implement CRM. This paper developed a
model for CRM implementation, which instead of overstating the role of ICT, it
suggests that an integrated managerial approach among three areas namely ICT,
relationship and knowledge management, should be adopted. The applicability and
value of this approach is illustrated by several examples and cases from the
international hotel industry.
Moreover, data from the Greek hotel sector provided evidence that ICT is not the
panacea and the exclusive CRM determinant factor. So, ICT are more important in
large than small hotels, while other organisational and managerial factors such as
culture, staff motivation and development also play a vital role on CRM’s success.
CRM implementation may also be driven and so affected by different (strategic)
motivations. Indeed, CRM in small hotels was found to frequently adopt the
owner’s/manager’s personal style and ?air, whereas in large properties CRM is
usually viewed as a way for formalising processes, enhancing customer service and
reducing costs. However, because such a patriarchal and authoritarian leadership
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 409
style of hotel managers sanctions open knowledge transfer, it is imperative that hotel
managers establish knowledge oriented leadership, foster empowerment and
minimise hierarchical boundaries. To generate knowledge and empower employees
to identify and solve problems, hotels can also learn and bene?t from small hotels.
The ‘‘institutionalised’’ informal and ‘‘gossiping’ way for sharing guest information
and commenting on staff experiences may also be an effective and personalised way
for disseminating knowledge in large hotels.
Analytically, although hotels have traditionally perceived codi?cation and
personalisation of knowledge as opposing knowledge strategies, evidence has
revealed that personalisation, codi?cation and digitisation of guest knowledge can
co-exist as a hybrid solution. This is because tacit knowledge and skills (embedded in
service routines) can only be transferred in direct personal relationships, while ICT is
only effective for the effective storage and dissemination of explicit knowledge.
Similar to the quality circles, the informal networks and ‘‘gossiping’’ discussions
groups in small hotels, hotels can institutionalise knowledge circles between
employees that enable them to discuss problems, insights and new ideas. In turn,
this can increase the transactive memory and lead to meetings with experts that can
further transfer more tacit knowledge. Moreover, input regarding new challenges
and ideas, as well as commitment and maybe leadership from hotel management into
knowledge circles can further promote learning and staff motivation.
As in any study, the ?ndings present some limitations, but which in turn identify
and provide ideas and directions for conducting future research. So, although
respondents represented a representative sample of the Greek hotel sector, the small
and convenience sample that was used eliminates the possibilities for generalising
?ndings to the whole Greek hotel industry. Moreover, although the data collection
methods guaranteed the return of a respectable number of usable questionnaires,
they did not allow for the collection of more qualitative data. Some in-depth
information was gathered through telephone conversations, but that was not always
easy and feasible since respondents were busy and the limit of the 30 min telephone
call had to be respected. Finally, ?ndings revealed and represent the perceptions and
opinions of hotel managers/owners only and not of a wide sample of different
operational and managerial hotel staff.
In this vein, future research of a greater sample scale and qualitative data nature is
required. A topic of great interest that future studies could investigate is the
implications of CRM and KM strategies on hotel staff skills, competencies and
working environment. As such skills may also differ depending on the hotel
characteristics, opportunities to conduct more in-depth research into the ?eld of
small business management are also revealed. The different styles as well as
the motives behind CRM implementation in the two different hotel sets also
suggest that studies and theories in entrepreneurship can signi?cantly contribute to
the body of knowledge regarding CRM implementation. Cross -industry and -sector
research is also valuable for examining the impact of any cultural and contextual
factors on CRM implementation. Future research can also be enhanced by
gathering and comparing data from a multi-level and multi-departmental sample
of hotel staff.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 410
References
Adebanjo, D., 2003. Classifying and selecting e-CRM applications: an analysis based proposal.
Management Decision 41 (6), 570–577.
Alford, P., 2001. eCRM in the travel industry. Travel and Tourism Analyst 1 (1), 57–76.
Berry, L., 1983. Relationship marketing. In: Berry, L., Shostack, GL., Upah, GD. (Eds.), Perspectives in
Services Marketing. American Marketing Association, Chicago, pp. 89–123.
Bitner, M.J., 1995. Building service relationships: it’s all about promises. Journal of the Academy of
Marketing Science 23 (4), 246–251.
Bouncken, R., 2002. Knowledge management for quality improvements in hotels. In: Bouncken, R., Pyo,
S. (Eds.), Knowledge Management in Hospitality and Tourism. The Haworth Hospitality Press,
Binghampton, NY, pp. 25–59.
Buttle, F., 1996. Relationship Marketing: Theory and Practice. Chapman&Hall, London.
Christopher, M., Payne, A., Ballantyne, D., 1991. Relationship marketing: bringing quality, customer
service and marketing together. Butterworth-Heinemann, Oxford.
Christou, E., 2003a. On-line buyer’s trust in a brand and the relationship with brand loyalty: the case of
virtual travel agents. Tourism Today 3 (1), 95–105.
Christou, E., 2003b. Guest loyalty likelihood in relation to hotels’ corporate image and reputation: a study
of three countries in Europe. Journal of Hospitality and Leisure Marketing 10 (4), 85–99.
Christou, E., Kassianidis, P., 2003. Consumer perception and adoption of online buying for travel
products. Journal of Travel and Tourism Marketing 12 (4), 93–107.
Cline, R., Warner, M., 1999. Hospitality 2000: the Technology a Global Survey of the Hospitality
Industry’s Leadership. Arthur Andersen Consultancy, New York.
Corner, I., Hinton, M., 2002. Customer relationship management systems: implementation risks and
relationship dynamics. Qualitative Market Research: An International Journal 5 (4), 239–251.
Couldwell, C., 1998. A data day battle. Computing 21, 64–66.
Davenport, T., Prusak, L., 1988. Working Knowledge. Harvard Business School Press, Boston, MA.
Dev, C., Olsen, M.D., 2000. Marketing challenges for the next decade. Cornell Hotel and Restaurant
Administration Quarterly February, 41–47.
Dodds, B., 2001. CRM at no charge. www.dmreview.com/master.cfm?NavID=193&EdID=3477
[Accessed 11/07/01].
Dube, L., Renaghan, LM., 2000. Creating visible customer value. Cornell Hotel and Restaurant
Administration Quarterly February, 62–72.
Earl, M., Scott, I., 1999. What is a chief knowledge of?cer. Sloan Management Review Winter, 29–38.
Gilmore, J.H., Pine, J., 1997. The four faces of mass customization. Harvard Business Review 75 (1),
91–101.
Gronroos, C., 1994. Quo vadis, marketing? Toward a relationship marketing paradigm. Journal of
Marketing Management 10 (3), 347–360.
Gummesson, E., 1990. The Part-time Marketer. Centre for Service Research, Karlstad.
Gupta, A., Govindarajan, V., 2000. Knowledge Management’s social dimension: lessons from Nucor steel.
Sloan Management Review 42 (1), 71–80.
Hart, C.H.L., 1995. Mass customisation: conceptual underpinnings, opportunities and limits. Inter-
national Journal of Service Industry Management 6 (2), 36–45.
Heskett, J.L., Sasser, W.E., Hart, C.W.L., 1990. Service Breakthroughs. Free Press, New York.
Kalakota, R., Robinson, M., 2000. E-business: the Roadmap to Success. Addison-Wesley Publishing
Company, Reading, MA.
Loftness, M., 2001. Once you have caught it, what are you going to do with it? Hospitality Upgrade
[accessed 8 August 2001, www.hospitalityupgrade.com].
Malhotra, Y., 1998. Deciphering the knowledge management hype. Journal for Quality and Participation
21 (4), 58–60.
Massey, A., Montoya-Weiss, M., Holcom, K., 2001. Reengineering the customer relationship: leveraging
knowledge assets at IBM. Decision Support Systems 32 (2), 155–170.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 411
Mok, C., Stutts, A., Wong, L., 2000. Mass customisation in the hospitality industry: Concepts and
applications. In: Proceedings of the Fourth International Conference, Tourism in Southeast Asia and
Indo-China: Development Marketing and Sustainability, 24–26 June 2000, Singapore, pp. 123–139.
Olsen, M.D., Connolly, D.J., 2000. Experience-based travel. How technology is changing the hospitality
industry. Cornell Hotel and Restaurant Administration Quarterly February, 30–40.
Palmer, A., McMahon-Beattle, U., Beggs, R., 2000. A structural analysis of hotel sector loyalty
programmes. International Journal of Contemporary Hospitality Management 12 (1), 54–60.
Park, C., Kim, Y., 2003. A framework of dynamic CRM: linking marketing with information strategy.
Business Process Management Journal 9 (5), 652–671.
Paylopoulos, P., 1999. The size and capacity of the Greek tourism industry. Research study, Research
Institute for Tourism (RIT), Athens, Greece.
Reichheld, F., 1996. The Loyalty Effect: the Hidden Force Behind Growth, Pro?ts and Lasting Value.
Harvard Business School Press, Boston.
Rheault, D., Sheridan, S., 2002. Reconstruct your business around the customer. The Journal of Business
Strategy 23 (2), 101–109.
Rigby, D., Reichheld, E., Schefter, P., 2002. Avoiding the four perils of CRM. Harvard Business Review
80 (2), 101–109.
Romano, A., 2000. Customer relations management in information systems research. In: Chung, H. (Ed.),
Proceedings of the Americans Conference in Information Systems (AMCIS), 10–13 August,
pp. 811–819.
Sigala, M., 2003a. Competing in the virtual marketspace: a strategic model for developing e-commerce in
the hotel industry. International Journal of Hospitality Information Technology 3 (1), 43–60.
Sigala, M., 2003b. Developing and benchmarking internet marketing strategies in the hotel sector in
Greece. Journal of Hospitality and Tourism Research 27 (4), 375–401.
Sigala, M., 2003c. The information and communication technologies productivity impact on the UK hotel
sector. International Journal of Operations and Production Management 23 (10), 1224–1245.
Sigala, M., Christou, E., 2002. The transformative power of e-commerce on hotel brands. In: Proceedings
of the Annual European Council for Hotel, Restaurant and Institutional Education (Euro-CHRIE)
Conference, Cross-cultural Challenges in the Tourism Industry, Escola Universitaria St. Ignasi,
Barcelona, Spain, 31 October–1 November, 2002.
Sigala, M., Connolly, D., 2004. In search of the next big thing: IT issues and trends facing the hospitality
industry: a review of the Sixth Annual Pan-European Hospitality Technology Exhibition and
Conference (EURHOTEC 2001); International Hotel and Restaurant Association, 19–21 February
2001. Palais Des Congress, Paris, France; Tourism Management 25 (6), 807–809.
Sigala, M., Lockwood, A., Jones, P., 2001. Gaining advantage from yield management: strategic
implementation in the rapidly developing world of IT. International Journal of Contemporary
Hospitality Management 17 (3), 364–377.
Siguaw, J.A., Enz, C.A., 1999. Best practices in marketing. Cornell Hotel and Restaurant Administration
Quarterly October, 31–59.
Siguaw, J.A., Enz, C.A., Namasivayam, K., 2000. Adoption of information technology in US hotels:
strategically driven objectives. Journal of Travel Research 39 (2), 192–201.
Stefanou, C., Sarmaniotis, C., Stafyla, A., 2003. CRM and customer-centric knowledge management: an
empirical research. Business Process Management Journal 9 (5), 617–634.
Sveiby, K.E., 2000. What is knowledge management? [accessed 19/9/03 www.sveiby.com.au/Knowledge.
Management.html].
Thomson, B., 2002. What is CRM. www.crmguru.com/members/primer/01.html [accessed 01/07/01].
Tiwana, A., 2001. The Essential Guide to Knowledge Management: e-business and CRM Applications.
Prentice-Hall, Englewood Cliffs, NJ.
Weill, P., 1992. The relationship between investment in IT and ?rm performance: a study of the valve
manufacturing sector. Information Systems Research 3 (4), 307–333.
Wells, J.D., William, L.F., Choobineh, J., 1999. Managing information technology for one-to-one
customer interaction. Information and Management 35 (1), 53–62.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 412
Winer, R., 2001. A framework for customer relationship management. California Management Review 43
(4), 89–106.
Zack, M.H., 1999. Developing a knowledge strategy. California Management Review 41 (3), 125–145.
Marianna Sigala, B.Sc., Pg Dipl, M.Sc., Ph.D., is a Lecturer of Operations and Production Management
at the Department of Business Administration at the University of the Aegean, Greece. Her interests
include productivity and service quality management, Information and Communication Technologies
(ICT) applications in tourism and hospitality operations, strategy and education. Before joining the
University of the Aegean, she had been lecturing at the Universities of Strathclyde, Westminster and
Surrey in the UK. She has professional experience from the hospitality industry in Greece, while she has
also contributed to several international research and consultancy projects. Her work has been published
in several journals and international conferences and awarded with several ‘‘Best Papers Awards’’. She is
the co-chair of the Euro-CHRIE Special Interest Group (SIG) in ICT in Hospitality and she currently
serves at the Board of Directors of Euro-CHRIE and IFITT.
ARTICLE IN PRESS
M. Sigala / Hospitality Management 24 (2005) 391–413 413
doc_938941311.pdf