Impact of customer relation management on customers retention in the hospitality industry, evidence from hotels in Takoradi Metropolis

Abstract

Customer relationship management (CRM) has currently become one of the hottest issues and a focal-center in the business field. In fact, due to the competitive environments among hotels sector, it is essential that hotels should adopt new strategy such as CRM. Based on this the study aimed at assessing the impact of customer relation management on customers retention in hotels in the Takoradi Metropolis. A descriptive survey research design was used. The research covers a population of customers and staff of five (5) hotel in Takoradi Metropolis. A sample of 150 customers and 110 staff members were selected. Purposive and convenient sampling technique were employed for this study. Questionnaire was used as data collection instrument. The study discovered that 78.4% of hotels and 76.2% had adopted commitment strategy, and customer-centered strategy. Also, it appeared that 69.3% had adopted process-driven approach, whereas 70.4% of the hotels had adopted reliability strategy and 72.7% of the hotels had adopted technology orientation strategy in retaining its customers. The study showed that inconsistent and inaccurate customer data, and frequent changes of hotel management are the major challenges to effective implementation of CRM strategies. The study found that hotel commitment is found to have the greatest influence on customer retention (β=0.358, t=4.704, p=0.00<0.01). Hence, hotel commitment is a significant predictor of customer retention. The next contribution is made by customer-centered (β=0.124, t=2.293, p=0.024<0.05), process-driven approach (β= 0.357 t=2.154, p= 0.034<0.05), and then technology (β =0.138, t =-0.212, p =0.002<0.01). However, there was no relationship between reliability and customer retention (β =-0.027, t=-0.183, p=0.197>0.05). The study concluded that improving CRM practices has the potential of enhancing customer retention. It was recommended that the hotels should invest resources and capacity to intensify the management of customer relationships as this has been shown to impact on profitability.