In today’s hotel business, managers have recognized that it is more profitable to retain existing customers than to attract new customers (Garrido-Moreno and PadillaMeléndez, 2011; Wang, 2007). It costs five times as much to attract new customers than keeping existing ones (Ko et al., 2008; Abraham and Taylor, 1999).
This increased profitability comes from reduced marketing, increased sales and reduced operational costs (Bowen and Chen, 2001). Also, the organization success depends on their ability to maintain effective relationships with customers (Nguyen et al., 2007). Furthermore, the customers’ needs and purchase patterns have dramatically changed (Ko et al., 2008). Therefore, one of the management’s goals is that their employees shall always satisfy the customers, because they are always right (ibid.).
Another important tool for organizations when creating loyalty is technology. Nowadays, technology has increased and can provide businesses with systems that can follow the customers’ interactions with the organization. Hereafter, the systems can forward this information to the employees.
That is why customer relationship management (CRM) has gain momentum in the hotel business sphere and it is an important issue for hotel managers (Wu and Li, 2011). If the system is used correctly it can enhance the organization ability to achieve goals of maintaining customers and expanding a strategic advantage over competitors (Nguyen et al., 2007). This new technology process can be interpreted as digitalizing employees’ knowledge about customers. Normally, personnel would be required to remember customers’ needs, preferences and behaviors (ibid.).
The main goal with CRM is to achieve long-term relationships that give value to both customers and company. CRM can shorten the distance between customer and company if used properly. Hence, the CRM process contributes to success in the firm through customer loyalty, superior service and better information gathering (Nguyen et al., 2007). Further, CRM systems help the organization to better understand their customers’ needs and preferences. Moreover, this process system is widely accepted among businesses because organizations have understood the importance of keeping strong customer relationships and that these customers are more likely to bring profitability (ibid.).
Hence, to the best of our knowledge has loyalty among business travelers have not been investigated through organizational factors effect on CRM activities via the quantitative method. Hence, the most important organizational factor affecting CRM activities and the major CRM activity which increases loyalty are the main contributions of this research.