CRM is Not a Software "Solution"
by Cindy Green — Partner, Adventurocity Inc.

It costs less to retain a current customer than to gain a new one. In fact, it's three to five times more expensive to acquire a new customer.

Okay, you probably know that already.

Travel organizations have been establishing customer relationship management (CRM) solutions given increasingly intense competition. In a primarily service-based industry, it makes sense to manage relationships with customers more effectively in order to gain their loyalty. In turn, these businesses experience lower customer turnover and higher profitability-per-customer.

Is your company one of them? If so, is CRM fully supported and actually practiced in order for the benefits to be realized?

A key point to bear in mind is that relationship management is about people. It seems self-evident, but it's easy to lose sight of that.

The more value that your business brings to prospective and current customers, the more value your customers will place on your travel products, services, and information [see "Online Marketing: It's the Principles"]. It's a basis for developing a mutual long-term relationship.

CRM, in its entirety, is a way of doing business. Managing customer relationships and information is an intricate task. CRM across the organization requires an elaborate core system of people and processes focused on delivering value to customers and effectively managing customer information. It's more than technology.

The various "CRM solutions" touted are actually software that can be used as tools to help your people achieve specific solutions. You still need competent people to apply these tools effectively to the relevant business application. You need streamlined processes for your organization to deliver your services efficiently, within the right context and at the right time, to your prospective customers — via the Web site, e-mail, snail mail, online discussion forums, telephone, etc.

Customer life cycle planning is also a requisite. Travelers come from various backgrounds and locales and have different travel needs and interests. As a business discipline, your marketers need to establish best practices and customer profiling, segmentation, and behavior models to determine the lifetime value and growth potential of customers.

Each customer segment, therefore, represents different levels of profit and, in some cases, strategic value to your business. Knowing and understanding the value of your customers enables your organization to prioritize marketing and sales efforts and capital allocation.

As a process, CRM means that your business is closer to customers: to better determine travel needs and interests, test the market, improve sales efficiency, ascertain changes, and more readily adapt. You're in a better position to cross-sell, up-sell, or change the service mix of your travel offerings. It's like an ongoing conversation with your current customers and a more appealing invitation for prospective customers.

Each interaction that customers have with your organization is an opportunity to add value to the relationship.

Value your customers. After all, your customers are the focus of your travel business.

Contact us with your comments on this article or find out how human-centred technology can work for you and your customers.