What Is CRM?
A technology for managing all your company’s relationships and interactions with customers and potential customers.
With a CRM system, you can automate and integrate your customer-facing activities: sales, marketing, customer service and e-commerce. Best-in-class CRM software also offers tools for customer analytics, personalization, social media, collaboration and more.
The principles, practices and guidelines that an organization follows when interacting with its customers. From the organization’s point of view, this entire relationship encompasses direct interactions with customers, such as sales and service-related processes, and forecasting and analysis of customer trends and behaviors. Ultimately, CRM serves to enhance the customer’s overall experience.
Customer relationship management tools are conquering the corporate world, and the implications for managed travel are profound. Service providers like travel management companies and suppliers like airlines and hotels are using CRM to decide whether to respond to buyer RFPs, determine pricing and track the performance of accounts they win. Better information about customers and prospects alike is making suppliers more discriminating about whether to bid or not, based in large part on how much they know about the client. As a result, buyers are coming under pressure to engage more continuously with the marketplace and to disclose more data about their programs to attract bids.
But that’s just the beginning. CRM technology also is starting to manage traveler profiles and power bots that serve travelers. There is even speculation CRMs could become business travel booking portals.
Total spend on CRM software grew 13.7 percent to $48.2 billion in 2018, according to Gartner. Investment is accelerating not just because more companies are adopting CRM but because they are doing so much more with it.
By far, the largest CRM is Salesforce, which has 150,000 corporate customers. Gartner estimates Salesforce’s market share in 2018 was 19.5 percent, more than double its next closest rival, SAP, with 8.3 percent. “Salesforce was originally introduced as a sales administration tool to register leads and prospects, send proposals and close deals,” said SalesTrip founder and CEO Manoj Ganapathy. “Then they realized they had accidentally built a digital platform which could be extended in a similar way to the Apple App Store or Google. Salesforce has become the primary tech hub for many companies, providing sales, financial and operational data about customers all on one platform. Previously, businesses had no real information about how much they were spending on servicing a customer.” As a result, said Ganapathy, businesses can assess profitability per customer “and try to understand: Am I spending money in the right place to win a customer?”
Ganapathy’s own career illustrates the radically widening remit of CRM. In 2014, he sold a billing software app, Invoice IT, to Salesforce, where it is now branded as Salesforce Billing. This year, he launched SalesTrip, a booking and expense tool/TMC hybrid that is built and operates inside Salesforce. SalesTrip aims to help clients understand the relationship between sales revenue and travel spend and therefore assess the ROI in travel.
FCM Travel U.K. general manager Graham Ross, a customer of Salesforce for the past seven years, agreed with Ganapathy’s assessment. “Over the past two years, it has grown arms and legs for us because we have realized the capabilities of using Salesforce are pretty vast,” said Ross. His team has offsite consultation days with Salesforce management to focus on how FCM can better leverage Salesforce, “which isn’t something we do with, say, Microsoft,” he said.
At its most basic level, CRM provides what IHG global accounts VP Nick Grandvoinet calls “hit by the bus” security. His company white-labels Salesforce as IHG Javelin. “If one of our people gets hit by a bus, you’ve got all their customer info in the CRM.”
The information Salesforce logs includes details of all interactions with prospects and customers. “Historically what I got out of Salesforce was only what I put in there myself,” said Ross, but FCM users now also channel external data about companies, such as employees, turnover, competitors, press releases, news feeds and, through a LinkedIn feed, who has responsibility for travel. Consequently, “suppliers have better visibility of their customers,” said Ganapathy. “For example, Brexit might mean a company opens a second office in Europe, which means there is more travel that could produce a bigger contract.”
Breadth and depth of knowledge enable travel sales teams to refine their strategies. “We look at verticals which are doing well, like consulting,” said Grandvoinet. “We can ask ourselves questions like whether we need to win more accounts in a particular vertical as we go into a global economic slowdown. Our work has always been a combination of science and art, but CRM makes it more of a science now.”
Suppliers also load into the CRM everything they know about businesses’ travel programs. Intelligence on spend, market share, destinations, supplier choices and class of travel are all grist for the CRM mill. When FCM receives an RFP, it uploads information from the tender, such as existing technology and tech requirements for the future, plus invoicing requirements. The TMC then creates what it calls a Know Your Prospect score based on all this information and on the extent and quality of previous engagements with the company. The system even takes into account highly granular information, such as how many people at the prospect have clicked on e-mails sent by FCM and how many have downloaded its white papers. Based on this score, and the views of FCM salespeople around the world, the TMC arrives at a determination it calls BNB, which stands for Bid/No Bid. Salesforce-driven decision-making has changed the ratio for FCM. “We’re definitely no-bidding more than we used to, and as a result, we have a higher conversion rate,” Ross said. “Salesforce gives us a more educated ability to say yea or nay.”
Grandvoinet concurred. “You can only have so many salespeople. You have to make sure you focus on the opportunities that will have the biggest benefit to the business,” he said. “It enables you as a manager within sales to much more clearly get an objective of which accounts you should focus your effort on: the ones which will deliver more market share and be a good fit with where we are.”
CRM also influences supplier pricing. Einstein, Salesforce’s artificial intelligence-driven business analysis tool, “tracks all RFPs and the price points for different customers,” said Ganapathy. “It gives pricing predictions based on all the information in the system. It will look at the data and say pretty accurately, ‘This is 20 percent more than you are charging other clients in this sector or country.'”
Once an account is up and running, CRM monitors performance. IHG uses Salesforce insights to judge whether the amount and spread of spend by a corporate client corresponds to the sales support it receives. IHG could move those spending less than scheduled to a less bespoke sales service.
Salesforce travel, transportation and hospitality VP Taimur Khan believes CRM also is shifting suppliers and buyers to more dynamic management of their agreements. “CRM provides that insight on: How far ahead or behind am I in the plan?” Khan said. “You can take actions as they are needed and not wait until the quarterly review.”
The question for travel buyers is how they should respond to this brave new CRM-led world, which makes suppliers far better informed. The consequences are nothing to be scared of, in the view of GoldSpring Consulting associate Chris Pouney, who also is Midlands branch chair of the U.K.’s Chartered Institute of Procurement & Supply. “The quality of sales has increased immeasurably over the last few years, either through better salespeople or more likely through companies deploying this kind of technology,” Pouney said. “I can think of global bids in the past where the TMC did not know it was serving me elsewhere. I am seeing a lot more joined-up thinking.”
Pouney believes travel buyers need to respond by providing in the RFP the data that suppliers check for in their CRMs. But buyers also must arm themselves with similar levels of intelligence. “In many ways, CRM and supplier relationship management are two sides of the same coin,” said Pouney. “They both talk to understanding the full breadth of the relationship along with needs and wants. You may not be wanting to beat up British Airways to get a better deal if another part of your business is lending it the money to buy new engines.”
He added: “Having better information and trust on all sides leads to better procurement outcomes and a reduction in TMCs conducting a ‘quote by rote’ exercise or not bidding at all, both of which infuriate buyers. On the buyer side, there’s no worse place to be than if everyone no-bids you. You need a good number of suppliers to bid. Otherwise you are giving a licence to the incumbent to push up its prices.”
Grandvoinet supports full disclosure. “Be open about what you want us to deliver and how you view where the hotel company fits into your program,” he said. “CRM enables us to objectively measure that in a way we couldn’t before. The companies we have the best relationships with are the ones prepared to be transparent.”
If CRM is reshaping suppliers’ sales and account management strategies, it’s also evolving in new directions, including helping businesses improve and personalize the customer experience. One such application is profile management, or, in Salesforce-speak, “the customer 360-degree view.” According to Khan, this view includes “my preferences, my level within the organization and my sentiments. My last five experiences-were they good or bad?”
FCM will introduce traveler profile management powered by Salesforce over the next few months. “When you call our team, your profile will come up on their screen,” said Ross. “It will get to a level where we can see that, if you fly to New York every month, we know your favorite restaurant there and can ask if we should book it again for you.”
In a recent interview with PhocusWire, which like BTN is owned by Northstar Travel Group, BCD Travel SVP of product strategy and development Yannis Karmis referred to this concept as a “digital travel identity, [which] is not the same as a traditional profiles. It’s a suite of capabilities which include traveler identification and access management, travel consent management and traveler personalization.”
BCD has signed a deal to build digital travel identities on SAP’s data cloud platform. Karmis said this will allow his company stitch identities “across multiple silos of data within our systems so we can create new levels of intelligence for not only our human agents but the countless bots automating tasks for travelers and travel agents.”
Where next? Ganapathy predicts Salesforce within five years will become a seller of corporate travel or at least some aspects of it, allowing suppliers to connect directly to their corporate customers. “Suppliers will be able to use the platform as a marketplace for corporate travel.” He added: “If an airline supplier knows a customer always buys Wi-Fi on a particular flight, there could be an opportunity through the platform to upsell to selected travelers. Other technologies like New Distribution Capability are trying to get there, but they are reactive. Nothing happens after the transaction is completed. [Global distribution systems] lack context: why a traveler is going somewhere, sales budget and so on. There is only visibility at the time of shopping. Once the transaction happens, on a CRM you can proactively analyze the data and make further offers. A platform like Salesforce could become the next big thing for the travel industry.”
Salesforce’s Khan, however, downplays that prediction. “A lot of technology is needed to be successful with this: reservation systems, [airline] passenger service systems, GDS, [hotel] property management systems. Today, a lot of them are part of our ecosystem to connect information, but we’re not in the distribution business ourselves. That’s not part of our road map.”
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