CUSTOMER RETENTION ON HOSPITALITY MANAGEMENT. A RESEARCH PROJECT MATERIAL ON TOURISM AND HOSPITALITY MANAGEMENT
Customer retention management (CRM) is imperative to the success of today’s hotel sector in Donegal, as it is more cost efficient to retain valuable customers than to gain new one’s and in the current economic climate this is of high importance. The Donegal hotel sector currently implements CRM strategies that have been updated since the economic downturn. The most common CRM strategy used in the hotel sector is Customer Loyalty Programs, which theory suggests that in the hospitality sector Loyalty Programs are common. There is confusion of marketing in the Donegal hotel sector and a factor influencing this is the reductions in marketing budgets and that marketing personnel tend not to be marketing managers but rather owners and managers. Customer retention management has important elements in order to be effective. Customer satisfaction, relationship marketing, loyalty programs, data collection, complaints handling services, recovery strategies and post purchase follow up. The research process carried out by two phases, one descriptive in approach and one exploratory in approach. The researcher identified that by using triangulation it allowed the data from both phases to be corroborated and analysed with reference to theory highlighted in the literature review. The apparent themes that arose from the research processes included that loyalty programs were the most common method of customer retention in the Donegal Hotel sector. It was also apparent that external initiatives available by Failte Ireland and other local and national bodies had high usage. Finally in relation to the measurement of marketing initiatives, 25% of hotels stated that they do not measure the performance of the marketing used. In phase two of the research process respondents commented that marketing metrics is where the Donegal hotel sector fall. The researcher recommends that hotels develop written marketing strategies that combine CRM initiatives with other marketing processes and to implement the use of marketing metrics to measure the performance of all marketing activities implemented in order to be cost efficient and effective in the marketing budgets.
Chapter One begins by clarifying the terminology used in this study. The background to the study, which contextualizes the topic under consideration, is then presented. This is followed by the formulation of the problem statement, and the goals and objectives of the study. After which the formulation of the research question and its hypothesis and the significance of the study then the definition of terms is provided.
1.1 Background of the Study
Blattberg, Getz and Thomas (2001:68) state that customer retention occurs when customers continue purchasing a product or service over an extended period of time. For products with short purchase cycles, they define customer retention as occurring when ‘the customer continues to purchase the product or service over a specified time period’.