Q1.What do you understand by Employee Organization Relationship?

Explain its types

Employee Organization Relationship is an overarching term to describe relationship of employee and
the organization including both micro concepts such as psychological contracts and perceived
organizational support, and micro concepts such as the employment relationship
Types of Employee Organization Relationship
Exchange Relationship
Communal Relationship
Conventional Relationship
Contractual Relationship
Exploitive Relationship
Manipulative Relationship
Symbolic Relationship
Essentials of Building Employee Relationship
Improved Communication
Offer challenges
Give Recognition
Training & Career Development
Fair Treatment
Employee Customer Linkage
It is the factor refers to relating activities the employee accomplishes a service organization that
connects or links the customer to the organization. The concept of building on customer loyalty is
critical in developing long term relationship.
Q2.What are the factors that affect employee customer oriented behaviour?
Factors Affecting Employee Customer Oriented Behavior:

Customer-Oriented Behavior- Customer-oriented behavior as the extent to which service

employees use their marketing concepts for helping customers to make purchase decisions as
well as satisfying their needs customer-orientation is the degree to which an organization or
its employees focus their efforts on understanding and satisfying customers.
Job satisfaction and its effect on customer-oriented behavior- We define job satisfaction
as an extent of affective reaction to which customer-contact employees like their jobs
Job involvement and its effect on customer-oriented behavior- We define job
involvement as the extent to which customer-contact employees consider their job to be an
essential part of their lives
Job stress and its effect on customer-oriented behavior- We define job stress is an extent
of harmful affective reaction to which service employees do not match the job requirement
with their capabilities or resources themselves. We expect job stress will negatively affect
customer-oriented behavior.
Emotional intelligence and its moderated effect- Emotional intelligence can be defined as
the abilities concerning the recognition and regulation of emotion in the self and others. We
argue that customer-contact employees emotional intelligence would moderate the
relationship between job stress and customer-oriented behavior
We found that job satisfaction and job involvement can positively enhance customeroriented behavior of customer-contact employee; job stress can negatively affect customeroriented behavior. We also found evidence supporting an adaptive mechanism to explain
why some customer contact employees may react more favorable customer-oriented
behavior than others. That is, emotional intelligence was a significant moderator of the
relationship between job stress and customer-oriented behavior. As the emotional
intelligence increased, the higher emotional intelligence customer-contact employees have
the lighter influence of job stress on customer-oriented behavior. Because higher emotional
intelligence affords them the ability to adjust their harmful affections (e.g.,job stress), and
thereby show the better customer-oriented behavior than others.

Q3. What do you understand by service recovery management?

Service Recovery Management
Service Recovery refers to the actions taken by an organization in response to a service failure.
Service Recovery is a planned process or strategy of returning an aggrieved or dissatisfaction client
to a state of satisfaction with company
Service Failure
It includes the instances where service is either not performed or is performed poorly. Service failure
results in service performance below the adequate expectation of service and consequently
dissatisfaction, negative word-of-mouth, restricted future purchases and firm switching behavior
occurs from customers.
Service Recovery: What it is, why it mattersand its unrealized potential
Service recovery refers to the actions a provider takes in response to a service failure (Grnroos,
1988). A failure occurs when customers perceptions of the service they receive do not match their
expectations. According to this definition, service recovery is not restricted to service industries, and
similarly, empirical research shows that dealing with problems effectively constitutes the most
critical component of a reputation for excellent (or poor) service for a broad range of industries
(Johnston, 2001b). Thus, any company that serves external or internal customers must accept that
failures happen and institute systems and processes to deal with them.
Process Recovery
Learning from failures may be more important than simply recovering individual customers, because
process improvements that influence customer satisfaction represent the most significant means of
creating bottom-line impacts through recovery.
Collect failure data
Analyze and interpret service failure data
Employee Recovery
We use the term employee recovery to refer to management practices that help employees succeed
in their attempts to recover customers or recover themselves from the negative feelings they may
experience in recovery situations.
Limit negative spillover from employees to customers
A large body of evidence now links employee and customer attitudes and suggests various
mechanisms by which employee attitudes can spill over on to customers For example, when
employees believe they are treated fairly, they tend to display organizational citizenship behaviors
(OCBs) toward customers, which results in customer satisfaction Alternatively, when employees
believe management does not support them by failing to prepare them to engage in successful
service recovery, they feel unfairly treated and therefore treat customers unfairly; In other words,
fairness spills over, and justice emerges as essential for both external customers and internal
employees.
Customer Recovery
The vast majority of service recovery literature focuses on customer recovery. We do not attempt to
summarize this entire rich body of research herein but instead highlight two key, far-reaching
findings. First, perceived fairness is a strong antecedent of customer satisfaction with the recovery
effort by the firm. Second, though companies may recover customers after one failure, it is very
difficult to recover from multiple failures.
Fairness is key
Do not fail twice
Essentials of Service Recovery Management
1. Anticipate the needs of Recovery

2.
3.
4.
5.
6.

Build on Organization that prompts in decision making and respond

Train front line employees
Recovery procedure need to be planned
Recovery skills must be taught
Recovery requires Empowered Employees

Q.4 What do you understand by customer profitability? Explain methods of assessing

customers profitability.
Customer Profitability
It is the difference between revenue earned from the costs associated with the Customer Relationship
in a specific time period.
According to Philip Kotler a profitable customer is a person, household or a company that overtime,
yields a revenue stream that exceeds by an acceptable amount the companys cost stream of
attracting, selling and servicing the customers.
Methods of assessing Customers Profitability
1. Customer Life Time Value
LTV Calculation and Customer Acquisition Cost Calculations:
Say the average customer buys for 2 years, and then stops for at least 1 year. Therefore, we define the
Life time of a customer as 2 years. Over 2 years, the average customer makes 16 purchases.
16 x $1.20 Profit per Unit = $19.20 LTV of the average customer
The average customer recruits 3 other customers. The maximum acquisition cost of a new customer
should be 4 x $19.20 = $76.80 to breakeven.
2. Customer Equity
3. Customer Product Profitability Analysis
4. Value Profit Chain
5. Recency, Frequency & Monetary Value Model

Q.5 Explain the Significance of Customer Experience

Customer experience is the set of perceptions a customer has with a company throughout the buying
and owning interactions. Positive customer experiences enable businesses to attract more, retain
more, sell more, sell for more, and do more. Every company in every industry can leverage great
customer experiences to:

Establish trust while building lasting customer relationships through positive service and sales
interactions.
Eliminate waste and add maximum value for efforts performed while serving needs in the most
cost effective manner.
Deliver experiences that leverage your customers in growing your business, improving
revenue, and adding customers, while selling more products to current customers.

Q.6 What are the Challenges of Customer Experience?

Most successful companies would say that they try to create a good customer experience and
have invested in the systems, people, and training to develop it. So whats missing? Why is it
so much more difficult to meet customer expectations every day in every way?
Customers want to do business with companies in more ways than before social, digital,
direct, in-store, mobile, and call center
The customer buying and owning lifecycle has become more complex
Creating a Great Customer Experience
Customers want simple, consistent, and relevant experiences across all channels, touch points,
and devices. Creating a great customer experience means delivering these qualities

consistently over time across the entire customer lifecycle. Exceptional customer experiences
create the loyalty, advocacy, and repeat business that drives success.
Q.7 Why Customer Expectations should be fulfilled?
Happy consumers are willing to pay more. Positive engagements create long-standing, loyal
relationships and this is so important to consumers that they are willing to pay for it. In fact,
according to the CEI survey, 86 percent of consumers will pay more for a better customer
experience.
Customer expectations are rarely met consistently. With only 1 percent of consumers
feeling that their expectations for a good customer experience are always met, it is easy to see
why the relationship between brands and consumers often flames out.
When expectations are not met, brands get dumped. Poor experiences are due to unmet
expectations, leading consumers to take their business elsewhere. 89 percent of consumers
began doing business with a competitor following a poor customer experience. 50 percent of
consumers give a brand only one week to respond to a question before they stop doing
business with them.
Bad experiences travel fast. After a poor customer experience, 26 percent of consumers
posted a negative comment on a social networking site like Facebook or Twitter for hundreds,
even thousands, of their friends and followers to see.
Most online complaints go ignored by the company. 79 percent of consumers who shared
complaints about a poor customer experience online had their complaints ignored.
A simple response can make a tremendous difference. Of those customers who did get
responses to complaints, more than 50 percent had positive reactions to the same company
about which they were previously complaining. And 22 percent even posted a positive
comment about the organization.
Q.8 Write a note on CRM in Banking Sector
Over the last few decades, technical evolution has highly affected the banking industry. For
more than 200 years, banks were using branch based operations. Since the 1980s, things have
been really changing with the advent of multiple technologies and applications. Different
organisations got affected from this revolution; the banking industry is one of it (Sherif, 2002).
In this technology revolution, technology based remote access delivery channels and payment
systems surfaced. ATM displaced cashier tellers, telephone represented by call centers replaced
the bank branch, internet replaced the mail, credit cards and electronic cash replaced
traditional cash transactions, and interactive television will replace face-to-face transactions
(Sherif, 2002).
In recent years, banks have moved towards marketing orientation and the adoption of
relationship banking principles. The key motivators for embracing marketing principles were
the competitive pressure that arose from the deregulation of the financial services market
particularly in India. This essentially exposed clearing banks and the retail banking market to
increased competition and led to a blurring of boundaries in many traditional product markets
(Durkin,2004). The bank would need a complete view of its customers across the various
systems that contain their data. If the bank could track customer behaviour, executives can
have a better understanding, a predicative future behaviour and customer preferences. The data
and applications can help the bank to manage its customer relationship to continue to grow and
evolve (Dyche, 2001). According to Stone et al. (2002) most sectors of the financial services
industry are trying to use CRM techniques to achieve a variety of outcomes. In the area of
strategy, they are trying to:
Create consumer-centric culture and organisation;
Secure customer relationships;
Maximize customer profitability;
Integrate communications and supplier customer interactions across channels;
Identify sales prospects and opportunities;
Support cross and up-selling initiatives;
Manage customer value by developing propositions aimed at different customer segments;
Support channel management, pricing and migration.

CRM is a sound business strategy to identify the banks most profitable customers and
prospects, and devotes time and attention to expanding account relationship with those
customers through individualised marketing, reprising, discretionary decision making, and
customised service through the various sales channels that the bank uses. Any financial
institution seeking to adopt a customer relationship model should consider six key business
requirements (Chary & Ramesh, 2012), they are:
1. Create a customer-focused organisation and infrastructure.
2. Gaining accurate picture of customer categories.
3. Assess the lifetime value of customers.
4. Maximise the profitability of each customer relationship.
5. Understand how to attract and keep the best customers.
6. Maximise rate of return on marketing campaigns.
The general discussion can be said that the bank is yet to develop an integrative approach
which focuses on the customer needs and to deliver to it. As shown by the study, the bank is
far from developing a customer centric approach both for the customer as well as for the
employees. Thus, for customer relationship management to deliver to its expectations, it
should play an integrative role within the bank and ensure that all processes are integrated in
the bank global strategy, which is far from reality in the study above. In view of this, to
implement a CRM integration strategy, the following recommendations can be adopted:
1. The Indian Banking Sector is flooded with different banks of the same molecule. In such a
competitive environment, the Banks should adopt suitable marketing skills rather than
depending on the trading skills. Hence, new services should be constantly introduced to ensure
the growth of the Banks and to be competitive in the market and to keep up the enthusiasm of
the employees and customers etc.
2. Implement a Customer Centric Process in Banks.
3. Employee Relationship Management first before Customer Relationship Management.
4. Increase customer experience through the web site.
5. Develop channel integration for effective Customer Relationship Management.
6. Proper training should be given to the bank personnel regarding the behavioral patterns by
the Banks before they come and work in the field.
7. More importance should be given to handling online transaction and using E-commerce and
mobile banking services.
8. It should be realised that customer relation cannot be built overnight. CRM should be
considered as Continuous Relationship Management.
9. Data gathered from the customers should be given proper value and it should be properly
utilised. Decision making authority should be extended to field force and some resources
should be given for faster implementation.
10. The Banking sector is developing and getting higher day by day in urban and semi urban
areas; there is large number of customers using the services in the urban and semi urban areas.
So a wide scope in rural areas is expected in the days to come.
Q.9 Write an essay on CRM Practices in Hospitality Sector
The Indian hotel industry is experiencing increased globalization, competition, higher customer
turnover, growing customer acquisition costs and rising customer expectations, meaning that hotels
performance and competitiveness is significantly dependent upon their ability to satisfy customer
efficiency and effectively. In the hotel industry the basic products (rooms) are very similar, when
comparing the same quality level the customer focuses are on soft factor like personal treatment,
personalization, one to one marketing and attention by the hospitality professions. The hotel industry
enjoys easy data access as the guests need to register their name and address during check-in and in
some countries, guests even need to provide their passport data and more detailed private
information. In addition, people are very likely to share their personal preferences with hotel staff to
make their stay more enjoyable. The hotel can make use of this database combined with IT and give
the guests a unique experience. They can establish a close relationship with customers and meet their
needs perfectly. In order to be able to compete on a highly competitive market a hotel has to meet
every single customer's needs and expectations. To do this it is important to understand the aspects of
business performance that persuade customers to become repeat purchasers and to exhibit behavioral
loyalty as it costs five to ten times more to sell to a new customer than to an old customer. To
enhance profitability and guest satisfaction and loyalty, the organizations (hotels) should focus on

implementing Customer Relationship Management (CRM) strategies that aim to seek, gather and
store the right information, validate and share it throughout the organization Dominici and Guzzo
(2010) said that to be successful in the market it is not sufficient to attract the new customers but to
concentrate on existing customers implementing effective policies of customer satisfaction and
loyalty. Appiah and Kingsley (2010) stated that as the world economy is becoming
globalized, competition has intensified and the differences in products have faded. Consequently,
businesses have become fixated on customer relationship management (CRM) as it has become a
central orienting point with organizations increasingly focusing on managing customer relationships
as a strategic capability to achieve market leadership and profits. Parvatiyar and Sheth (2001) in their
conceptual framework said that the two most important process of Customer Relationship
Management include proactive customer business development and building partnering relationships
with the most important customer.
Hotel industry is a highly flourishing, lucrative and competitive market. To compete in such a
market, the hotels should focus on maintaining good relations with the customers and satisfying the
customers. Increasingly, the organizations are using Customer Relationship Management (CRM) to
help boost sales and revenues by focusing on customer retention and customer loyalty. The present
research was undertaken to study the Customer Relationship Management (CRM) practices in hotel
industry. The benefits of CRM are increased customer satisfaction and increased customer loyalty.