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Manage Customer RelationshipsIn 1996 Frederick Reichheld published his now famous book, "The Loyalty Effect." Today, the vast majority of business executives accept his once-radical theories that - "loyalty makes economic sense" and that - "achieving profitable growth is impossible without building a loyal base of customers." He showed that companies with the most loyal customers are also the most profitable. So while many hotels focus primarily on attracting new customers - heads in beds - the more profitable ones have a balanced approach toward customer acquisition and retention and are actively managing customer relationships to create loyalty. In the end they look to maximize the lifetime value of each guest. Managing customer relationships is becoming increasingly sophisticated and requires a tremendous amount of coordination and marketing discipline. It also requires a global plan for how all the various marketing disciplines will work together to help move individuals through the customer lifecycle from awareness to loyalty. This chart offers an overview of the customer relationship marketing (CRM) approach. It shows marketing actively managing the customer lifecycle while integrating selling messages for cumulative gain turning guests into loyal brand advocates. Deceptively simple, but it does require a great deal of cross-functional marketing and sales-channel integration to make it work. Having various marketing suppliers (ad agencies, PR, DM, etc.) providing services on an ad hoc basis with little or no central coordination of tactics, timing or messaging simply won't cut it in today's environment. The larger and more successful hotels will have the cross-functional discipline needed to coordinate all marketing activities for CRM in-house. Smaller, yet still successful hotels will have a marketing partner who understands and can implement CRM for them. Loyalty (and the resulting profitability) doesn't just happen - it comes as a result of:
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