An Examination of Relation between Management of Customer Relationship with Quality of Relationship and Customers' Lifetime Value in Hotel Industry (Case study: City of Ilam)

Document Type : Research Paper

Authors

1 Assistant Professor, Faculty of Humanities, University of Ilam

2 MSc, Department of Management, University of Ilam

Abstract

Extended Abstract
Hotel industry is an important pillar of tourism which needs modern technologies such as customer relationship management, quality of relationship and customer lifetime value. The aim of the present study is to study customer and management relationship. Research method used for present study is a descriptive- correlative and structural equations model type. Population of study consists of customers of hotels in city of Ilam that is infinite number and among them 384 subjects selected based on Cochran formulae for infinite population through simple random sampling method. Data collecting tool was a standard questionnaire, whose reliability of 90% was obtained by Cronbach's alpha. Research findings in analyzing Lizrel software indicated that customer's relationship management has a significant effect on quality of relation and also quality of relation has effect on customer's lifetime value. And finally quality of relation has a significant effect of aspects of customer's lifecycle value (the level of applying services, loyalty, advertising, and tendency to refer).
 
Introduction
Customer's relationship management as a new term is traced back to 90s. Customer's relationship management is regarded as a business policy for managing mutual relations with customers with the aim of optimizing the value and long-term satisfaction of customers (Bohling et al, 2006). The quality of relationship is considered as an important indicator for evaluating the power of relationship between provider (supplier) and customer. Many researchers believe that trust, satisfaction, and commitment of customer are considered as key factors for evaluating quality if relation. Crosby et al (1990) suggest that satisfaction and trust are key aspects of relation's quality. One of sub-factors and requirements in customer's relationship management is customer's lifecycle management. It can be defined as; cycles starting from managing customers' information to define customer's behaviors encompassing completely processes of a company from attracting customers to selling product/services and retain a long-term relationship (Bargar and Nasser, 1998). Of course, it must be noted that each customer has a unique value to the organization and customer's relationship management can contribute customers through categorizing them based on the level of value they may have to the organization (the value of customer's lifecycle). Respecting the importance of customer's relationship management and quality of relationships with it and also the level of value making by each customer during his lifecycle, it has been tried during present study to examine the relations between customer's relationship management (CRM), relationship quality (RQ) and customer's lifetime value (CLV) from customer's point of view in hotel industry.
 
Materials and Methods
This study is regarded as an applied research in terms of purpose and in terms of data collecting it is a survey. It is accomplished according to analytical descriptive methods. Population of study consists of customers in hotels of Ilam with an infinite number, among which 348 subjects were selected using sampling formulae for infinite population with simple random sampling way. In order to collect data a questionnaire package including three standard questionnaires was applied. In order to analyze data, structural equations and Lisrel software were used.
Discussion and Results
Research hypotheses
1. Customer relationship management has a significant effect on quality of relationship in hotels.
2. Quality if relationship has a significant effect on customer's life cycle value in hotels.
 
 
 
 
 
 
 
 
 
Model at state of standard estimation
 
 
 
Figure.1: significance model of main hypothesis at state of standard estimation. Source: authors
 
Model at state of significance coefficients
 
 
 
Figure.2: significance model of main hypothesis at state of significance coefficients. Source: authors
 
As indicated by figures1 and 2, the level of effect for customer's relationship management on relationship quality among customers of hotels in Ilam is 70% and the level of its significance equals 5.06.
The level of effect for relationship quality on customer's lifetime value among customers of hotels in Ilam is 75% and the level of its significance equals 4.77.
Secondary hypotheses
1.2. Relationship quality has a significant effect on using services in hotels.
2.2. Relationship quality has a significant effect on loyalty in hotels.
3.2. Relationship quality has a significant effect on oral advertising in hotels.
4.2. Relationship quality has a significant effect on tendency to refer in hotel.
 
Model at state of standard estimation
 
 
 
Figure.3: significance model of main hypothesis at state of standard estimation. Source: authors
 
 
 
 
 
 
 
 
 
 
 
 
 
Model at state of significance coefficients
 
 
 
Figure.4: significance model of main hypothesis at state of significance coefficients. Source: authors
 
 
As shown in figures 3 and 4; the level of effect for relationship quality on the level of using services among customers on Ilam's hotels is 83% and the level of significance equals 5.89.
The level of effect for relationship quality on the level of loyalty among customers on Ilam's hotels is 74% and the level of significance equals 6.35.
The level of effect for relationship quality on the level of advertising among customers on Ilam's hotels is 60% and the level of significance equals 5.45
The level of effect for relationship quality on the level of tendency to refer among customers on Ilam's hotels is 57% and the level of significance equals 4.49.
 
Conclusion
This article is has been done for study and explanation of correlation of variables such as customer's relationship management and value of customer life cycle and relation quality as moderating variable for this correlation in hoteling industry. After review the respected literature, using the field method and questionnaire tool data were gathered for determine the relations of variables and hypotheses of research were tested by Lisrel software. The result of first main hypothesis that is: customer's relationship management has a significant relation to relationship quality, respecting modeling structural equations, standard coefficient between two variables of CRM and RQ equals 0.70 that with t-5.06 (greater than 1.96) indicates that this hypothesis is approved. This finding is accordance to finding by Moslehi, et al (2014) and Verdgo and Verpermal (2009). The second main hypothesis.2 that is: RQ has a significant effect on CLV. Respecting results from structural equations modeling, standard coefficient between two variables of RQ and CLV equals 0.75, which with t-4.77 (greater than 1.96) indicates that this hypothesis is confirmed. This is accordance to findings by Mahdavi and Mousavi (2014), Barari and Ranjbarian (2011), and Verdgo and Verpermal (2009). Secondary hypotheses were tested too and the results were: Secondary hypotheisis.1: RQ has a significant effect on the level of using services. Respecting results by structural equations modeling, standard coefficient between two variables of RQ and the level of using services equals 0.83, which with t-5.89 (greater than 1.96) indicates that this hypothesis is confirmed. This finding is along to finding by Mousavi et al (2011), Vergo and Verpermal (2009). Secondary hypotheisis.2: RQ has a significant effect on the level of loyalty. Respecting results by structural equations modeling, standard coefficient between two variables of RQ and the level of loyalty equals 0.74, which with t-6.34 (greater than 1.96) indicates that this hypothesis is confirmed. This finding is along to finding by Barari and Ranjbarian (2011), Vergo and Verpermal (2009).Secondary hypotheisis.3: RQ has a significant effect on the level of advertising. Respecting results by structural equations modeling, standard coefficient between two variables of RQ and the level of advertising equals 0.60, which with t-5.45 (greater than 1.96) indicates that this hypothesis is confirmed. This finding is accordance with finding by researchers such as Barari and Ranjbarian(2011) and Vergo and Verpermal (2009). The hypothesis.4 that is the RQ has significant effect on on desire to return. Respecting results by structural equations modeling, standard coefficient between two variables of RQ and the level of advertising equals 0.57, which with t-4.49 (greater than 1.96) indicates that this hypothesis is confirmed. The result of this hypothesis is accordance with the findings of studies of  Mousavi et al (2011), Barari and Ranjbarian (2011), Vergo and Verpermal (2009).
 
Keywords: Customer's Relationship Management (CRM), Relationship Quality (RQ), customer life cycle, hotels of Ilam
 
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