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Customer Relationship Management Systems *

Market Summary – Customer Relationship Management

Market Overview

Managing the information and communications associated with your customers and prospects is a cornerstone of nearly any business and central to a CRM. The accommodation and restaurant sectors are no exception. Digital customer, prospect, and partner data is now applicable across all channels and functions, whether it drives campaigns in sales and marketing or supports customer service touchpoints across an organization. Companies usually go to great lengths to collect and protect their customer data, but along with this comes the need to manage it responsibly.

CRM solutions are deepening their involvement with omnichannel marketing communications as vendors innovate in this direction. However, all communication methods carry a level of regulation. In recent years, more privacy laws have added to the complexity of storing and disseminating messages that rely on this data.

This Capsolve report emphasizes the 27 solutions that address customer relationship management across the restaurant and hotel industries, with influences from vendors also providing solutions to vacation rentals, clubs, and spas. CRM, as a concept, shares different meanings and definitions within each company that places it into action. This category contains many flavors of software and represents a diverse set of products to choose from as companies begin or enhance their use of it. Many vendors also now have extensive partner networks. These networks may extend the core product’s capabilities in nearly any company division or functional area but regularly focus on sales and marketing features, such as sales enablement and outbound marketing programs.

Capsolve identified CRM Solutions designed for these specific industries and classified the category size as Small. This analysis includes numerous solutions from the hotel and restaurant industries and those solutions’ coverage of the associated Vacation Rental, Spa, and Golf amenities. However, the report excludes customer information management functionality built within Hotel PMS and Restaurant POS solutions unless it represents a fully functional, individual CRM product provided by the same company.

CRM companies are located in selected parts of the world. Given these pockets of concentration, Capsolve classified this category as having Low geographic dispersion. The top 5 countries represent 78% of the companies, including Spain, Portugal, Canada, the United Kingdom, and the United States. While beyond the scope of this research, it is enlightening to note that more than 30% of the Hotel PMS category has positioned its software to include some level of CRM functionality. This is slightly less rampant in the restaurant industry yet is visible within the POS category.

Viewing the complete marketplace landscape, including those beyond this analysis, shows numerous solutions that are not industry-specific and could be applied to nearly any business.

Marketplace Context

This category is diverse in its feature set and addresses a comprehensive set of needs across each industry. As a result, we classify it as having a Medium requirements complexity. Variations in the scope of these solutions introduce complexity when considering how these solutions fit into an existing technological infrastructure, as does the central position of these systems regarding customer data. Capsolve researched this category of solutions for you and provides services to find the best solutions for your team and company. Additionally, the research will provide context regarding where other technologies, such as Customer Data Platforms, Marketing Automation, and Loyalty solutions, fit in relation to CRM software.

All solutions in this research are designed to cover the needs of the industry segments shown in the following graph and the data originating from their associated amenities and systems. The research uncovered most systems in the Hotel and Restaurant segments, giving those industries many choices in addition to the CRM modules sometimes provided as part of a core PMS or POS. While most module solutions were excluded from this analysis, a portion was included if purchasable as individual products.

Solution Paths

Changing your Customer Relationship Management system can feel rather daunting. However, the key element is deciding what scope of guest information and marketing efforts you want to transform as part of your project. While it is not required to take this approach, the most common path is to choose a system that will support your most important strategic and tactical technology capabilities and then decide what new or existing technology should complement it. A few standard approaches enabled by today’s technology solutions within this category include:

• Comprehensive Core: a solution with multiple modules designed to provide a fully integrated approach to covering most or all marketing and communications needs
• Best Fit Core: a solution with multiple modules covering the minimum fundamentals in combination with important strategic capabilities
• Minimized Core: a solution typically covering the most crucial strategic and operational needs but providing significant flexibility to connect to other best-of-breed solutions to complement the core
• Best Strategic Fit: a solution providing a balance between comprehensiveness and long-term strategic needs

These solution paths are not necessarily mutually exclusive. Solutions within the marketplace may create the opportunity to combine one or more paths and meet more of your selection criteria. Appropriately formulating an RFP to share with potential vendors will help to ensure you ask the best questions specific to your business while allowing you to learn about the depth of each potential vendor partner.

Pricing Information

Numerous pricing models exist in the marketplace, and it is crucial to understand how each one will affect your total ownership cost. The standard pricing structures are:

• Base Software Price plus a Maintenance Charge: This pricing is usually charged for on-premise software installed on local servers and is significantly less effective for CRM implementations today. It is usually charged based on the number of servers, user licenses, or user accounts and has an ongoing charge for modifications and upgrades based on the percentage of the base software.
• Subscription Price: This pricing is more common with the adoption of Software-as-a-Service. The price is often charged annually, quarterly, or monthly and applied to each location or user account. This type of pricing is sometimes aligned with the number of properties or rooms. Additional fees may also be present to cover limited-time costs or volume-related costs such as messaging volume.
• Revenue-Based Price: This type of pricing is usually experienced as part of a brand affiliation, where the CRM is provided as part of the agreement. It may be defined by a flat transaction fee or a percentage of revenue.

As you might expect, a combination of these pricing approaches may be applied to any given software.

Sales & Marketing Considerations

The CRM was traditionally considered a customer information center for businesses. However, it may also house a great deal of additional functionality as the scope of most systems continues to increase based on the changing needs of the industry. These complementary capability categories include Guest Information, Vendor Information, Partner Information, Marketing Channel Communications, Sales & Catering Tracking and Messaging functionality.

Many hotel CRMs also delve into guest communications by facilitating messaging conversations before, during, and after the on-property stay experience. It may also use interfaces with Marketing Automation tools and even Loyalty Systems to track rewards and other customer metrics important to guest satisfaction and reputation management. Furthermore, guest communications have entered the mobile world, and connecting a CRM to a mobile solution may be necessary.

Current Trends

1. Multi-Channel: The number of communication channels continues to increase, causing marketers and other functional areas of business to adapt to customers’ preferred channels and fragment their messages across these channels.
2. Data Privacy: Legislative changes worldwide continue to influence the responsible use of consumer data. Selecting systems that are flexible and capable of adjusting to this area of business need is paramount to success.
3. Interconnectivity: Many technologies in this category are inter-reliant on the foundational CRM software, creating a need for experienced planning as a proper step in due diligence efforts.
4. Vendor Activity: While Capsolve classifies this key technology component as a Small market, the expense of market entry is not insignificant. While the category certainly has room to grow, this natural barrier to entry is real.
5. Data Infusion: CRM solutions have begun to combine the power of lead-oriented data into the solutions, enabling companies to actively contact people within their industries of interest directly from data sets included within or accessible from the CRM.