Factors preceding CRM readiness in small- and medium-sized tourism enterprises

Abstract

Orientation: Customer relationship management (CRM) is important to organisations striving for competitive advantage through building relationships with their customers. Research purpose: This study identified the factors preceding CRM and assessed selected South African small- and medium-sized tourism enterprises’ (SMTEs) readiness for CRM. Motivation: CRM is likely to enhance SMTEs’ competitiveness. However, successful adoption and implementation of CRM is unlikely unless the organisation is ready for it. Research design, approach and method: A quantitative research approach and survey questionnaire yielded primary data from 332 respondent organisations selected by systematic sampling. Exploratory factor analysis was used to identify the latent factors preceding CRM readiness. Organisational CRM readiness was assessed based on CRM maturity in terms of data collection, use and sharing throughout the organisation. Main findings: Respondent-organisations performed well on the four factors preceding CRM readiness − business strategy, customer strategy, touch points and competencies, skills and technology and also on data collections and use, but not on data sharing. Practical/Managerial implications: CRM practice is believed to assist organisations in tailoring products and services to customers’ needs, providing customer satisfaction, enhancing customer retention and ultimately improving the organisation’s competitiveness and profitability. CRM might fail if SMTEs do not have CRM-enabling conditions in place and a CRM readiness audit should therefore be performed. Contribution: The study contributes to a largely under-researched area concerning CRM in SMTEs by providing an improved understanding of the factors that will enable SMTEs to engage in CRM activities.

Keywords

• customer relationship management, operational factors, organisational factors, small to medium tourism enterprises, strategic factors.