Customer retention management in the hospitality industry: a profile of the hotel industry in Donegal

Abstract

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