Sample Business Studies Paper on Customer relationship management (CRM)


Customer relationship management (CRM) is vital for a business entity such as Airbnb for it facilitates connecting and building a relationship with the customers (Rahimi, 2017). Mobile, cloud and social media are fundamental elements of reinventing CRM in the hotel industry. Fundamentally, CRM is vertical business, if companies seek for automation and optimization. If any person is leasing a vacation home, they and the hosts develop and enter into a relationship that should be managed from booking the home to addressing corresponding paperwork. Airbnb offers a platform for travellers and hosts that facilitates interaction, hence no need for paperwork. Airbnb is a comprehensive CRM given that it lets its travellers and hosts to manage all aspects of the relationship effectively. CRM is associated with potential benefits to the hotel business, though there are impending challenges. Such challenges are often associated with a significant risk of failure. These risks become more prevalent in Airbnb as a budget hotel. The present report explores on CRM loyalty management implementation, strategies, challenges, issues and benefits concerning Airbnb.


The need for an effective CRM loyalty management scheme for Airbnb is critical given that it operates in a customer-driven industry. Customer satisfaction plays a significant role in any business (Smith, 2015). It is the Airbnbs customers’ feedback on the services and products that determines the firm’s success, which eventually translates to profit. Airbnb’s website and social media comprise the comprehensive package of its CRM scheme. The corporate actively relates with its customers and potential clients regularly ranging from sharing of information to booking to customer service (Peppers & Rogers, 2016).

Consequently, the brand has over the years of its operations managed to continuously develop and sustain a relationship with customers through a CRM loyalty management scheme from new to regular customers. Considerably, the brand adopted an effective CRM loyalty management strategy that was implemented with the introduction of its new website and smartphone application. The mobile app is considered as the solution to customer-facing problems, given that it is designed to help travellers and hosts in booking and uploading needs without any difficulties. Today, most people use social media platforms mostly for interacting. Therefore, the brand utilised this platform for interacting with its customers and with the use of HootSuite, it successfully connects with customers on a real-time basis. Besides, Airbnb uses Twilio to initiate connections with hosts on booking decisions which considerably improves and speeds the process of the transaction. The brand gets to learn customer behaviour and patterns through the use of many CRM software. Through its corporate CRM strategy, Airbnb gets to determine and understand customers by tapping into their experiences which helps serve them better.

The CRM loyalty management strategy implemented by Airbnb allows for a profound interaction allowing for the brand’s collaboration with its customers, travelers and hosts. Once a traveler successfully signs up an account with Airbnb, an automated mail is sent for double opt in login. Upon confirmation, the system sends a welcome mail with accompanying offers to rent out. Airbnb gets to connect with the customers on a regular basis and initiate conversation. For instance, if a person books their stay at London, within the course of the week prior to their arrival, Airbnb will send a simple postcard-design email linking to curated events and activities commendations in London city.

The brand uses Twilio, as a CRM system to facilitate easy connection and relation with hosts. In an event where a traveler sends a booking request through Airbnb, the host has only 32 hours to respond. Before the introduction of Twilio, hosts who did not have access to their computers would take long before responding, regardless of whether they were interested in the booking. Airbnb customer care would have to manually call the hosts, requesting them to either deny or approve the request. However, through the use of Twilio the brand systematizes mobile communications between the travelers and hosts via text messages. An automated SMS messages is usually sent to the host if for any reason they fail to respond to the request. The automated SMS from the system with information of the travelers and booking request. Eventually hosts can get to send their reply with their decision.

Airbnb relies on HootSuite social media management systems to facilitate the management of the conversations globally. Such analytical tools help in monitoring Airbnb’s follower’s growth and social CRM. The system is capable of tracking specific keywords over a predetermined timeframe to help the brand in strategising social campaigns accordingly. Also, these tools are also used in educating and spreading information about what is offered, where it is good, and how differentiated its services are (Liang et al, 2018). Through the use of these tools, Airbnb gets to develop relationships, strengthen the community as well as communicate with global networks. Any person joining Airbnb on Facebook or Twitter and initiates a conversation, HootSuite helps the brand fully engage and be part of it.

Challenges and Solution

Customer retention for the Airbnb brand is critical for long-term success (Lee & Kim, 2018). It is for this reason that CRM loyalty management strategies are implemented. The brand continually has to deal with the ever-changing consumer expectations and evolving technologies. Consequently, the contemporary marketplace is increasingly saturated with various loyalty programs, making differentiation a challenging goal to attain (McCrory et al., 2017). Therefore, for a brand such as Airbnb, the main challenge would be determining the most effective ways of remaining relevant and continuing to deliver consistent value to members in the industry. The increasing customer acquisition costs attributed to third-party distribution sites present a great challenge for the brand in how it implements a full-scale customer retention strategy (McCrory et al., 2017).

The changing technology and consumer behaviour are one of the challenges affecting CRM strategy. Loyalty marketers across the world including, Airbnb, face similar challenges (Varma et al., 2016). As a loyalty market brand, Airbnb would require constantly adapt their approaches to meet consumers irrespective of their location. Such technological realignments present a challenge to the brand. Increased familiarity with digital platforms and digital interactions with CRM loyalty management programs, has resulted in a change of consumer’s expectations at the pace of technology (Varma et al., 2016). For instance, a few years ago, the idea of managing a CRM loyalty program via a mobile app would not have been possible. However, today, it is a commonplace and a loyalty program no offers its members that feature is outdated. Moreover, the customer would most likely abandon the program due to inconvenience (Varma et al., 2016).

The solution to these challenges would involve having a profound understanding of the pace and rate of technological change. Remaining relevant and meeting consumer’s expectations would be a suitable approach towards addressing these issues. Besides, the implemented programs should fully integrate technology into every aspect of the adopted CRM loyalty management strategy. For a loyalty marketer brand such as Airbnb, it would be necessary partnering, therefore selecting the suitable technology partner would be vital to overcoming these challenges.

As Airbnb implements its loyalty program, several operational challenges may be encountered. For the brand, the specific problems related to operations tend to vary by region. These common challenges arise from customers’ expectations and technology, financial and organizational buy-in concerns, and operational difficulties, though they can be overcome. How Airbnb approaches such problems determines how successful its programs would be in the future. In most scenarios, managing the pace of change with technology and the right loyalty technology partner would help the brand in gaining a competitive advantage over its competitors. However, it should primarily focus on delivering value to its customers, increasing engagement continuously and positively impacting its bottom lines.

Loyalty program managers in different regions have a commonality in terms of the difficulty faced in determining suitable rewards and pricing levels. Typically, pricing and rewards would have a significant impact on consumers and the value perceived in a program, though it would also affect the feasibility of the loyalty program. The implementation of an overly generous reward may be attractive to the current and potential loyalty program entities. Conversely, the brand may turn the program into a cost center for the business hence undermining its effectiveness from the perspective of the critical stakeholders. Such concerns directly affect executive buy-in, which could jeopardize Airbnb’s CRM loyalty program at any phase of implementation. The best solution for this challenge would be communication and cooperation. Ensuring that all stakeholders are actively involved from the start at the planning phase and through the implementation of the CRM loyalty management program would help ensure that the necessary buy-in and the support making a decent program successful.

Issues and Benefits

Airbnb’s CRM loyalty program was implemented for purposes of gaining competitive advantage and because product distinction does not apply to services anymore due to a rise of similar services and products (He et al., 2019). In the hotel and hospitality industry, having loyal customers, it has become increasingly problematic given the differentiated services offered by various companies. Examining the issues and benefits of e-commerce CRM loyalty programs is critical to ensure that Airbnb chooses the most suitable for its brand and audience (He et al., 2019).


Airbnb’s loyalty programs help improve customer retention. The implementation of a CRM loyalty management strategy by the brand is retaining customers by rewarding them for repetitive purchase trends. The existence of loyalty manifests where a person regularly patronizes a particular brand that they like, know and trust. Essentially, Airbnb’s CRM program is a platform or tool used in retaining customers by presenting them with a convincing motive to seek services over again from the brand and forming habits. The direct impacts of customer retention strategies on the bottom line of Airbnb’s business operation is a well-established fact. For instance, a business featuring a 60% customer rate is subject to losing three times as many customers compared to a company with an 80% retention level. When a business entity increases its customer retention by only 5%, it results in increased and boost if profits by 25 to 95% (Goodman, 2019).

Airbnb’s customer data is usually recorded in the business’s database once a client signs up for a loyalty package. These data can then be used for offline, and ecommerce segmentation, hence allowing for outlining of best customers and adapting its services to a specific market group of consumers. As the CRM loyalty program gives Airbnb a comprehensive view of its customer’s behavior, travel patterns, and preferences, this information may be useful for invigorating the inventory management and advertising schedule. Also, the data could be used in measuring the results for specific promotional needs with regards to the additional purchases and use of other channels.

A CRM loyalty management program allows for better customer communication for it provides a direct channel to customers, which makes communication effective. Other than announcing of destinations, services, and promoting sales Airbnb, benefits from the program given that it facilitates recalls when required. Such is possible because the booking date and other relevant data are recorded. The corresponding recall notice accrues more impact because it is founded on the customer’s authentic purchase or booking of the affected services.


A significant issue with loyalty programs would be the problem of identifying the actual source of loyal behavior (Shulga & Tanford, 2018). It is quite difficult for Airbnb’s loyalty framework to break away from the transactional code. Regularly, it appears that the person who appears as a frequent customer is the loyal one. However, this may be incorrect, for they may be buying or accessing the brand’s services for convenience reasons. They may also be accessing the services because of the accompanying benefits of the loyalty program in the form of rewards. Therefore, loyalty, which is an attribute of emotion, can be entirely determined by a CRM loyalty management policy (Shulga & Tanford, 2018). However, this issue may be addressed by merging Airbnb’s loyalty programs with advocate marketing tactics. Rewarding customers for referrals and writing of reviews. Such practices would make it easier to identify and differentiate frequent buyers and loyal customers (Shulga & Tanford, 2018).

Market saturation is a major issue with loyalty programs. Similar to products, loyalty programs have become increasingly identical and everywhere. Typically, most contemporary loyalty programs feature similar benefits, membership provisions, and purchase requirements. Therefore, in the present-day highly competitive business world, most firms including Airbnb may not entirely be at a position of withdrawing from its loyalty program commitments because of the fear of losing sales. There is the need for business creating and implementing programs that are unique and distinguishable. However, designing a CRM loyalty program centered on the sustainable competitive advantage that having full copyright entities is quite difficult. Advocate CRM loyalty programs are a suitable way of a brand such as Airbnb standing out from its competitors, because it can easily reward customers for their unique actions that work for its specific audience.

Reference List

Goodman, J., 2019. Strategic customer service: Managing the customer experience to increase positive word of mouth, build loyalty, and maximize profits. Amacom.

He, W., Tian, X. and Wang, F.K., 2019. Innovating the customer loyalty program with social media: A case study of best practices using analytics tools. Journal of Enterprise Information Management.

Lee, S. and Kim, D.Y., 2018. Brand personality of Airbnb: application of user involvement and gender differences. Journal of Travel & Tourism Marketing, 35(1), pp.32-45.

Liang, L.J., Choi, H.C. and Joppe, M., 2018. Exploring the relationship between satisfaction, trust and switching intention, repurchase intention in the context of Airbnb. International Journal of Hospitality Management, 69, pp.41-48.

McCrory, B., Pilcher, N. and McMillan, J., 2017. A holistic framework to embed good company practice for customer retention. The TQM Journal, 29(2), pp.257-275.

Peppers, D. and Rogers, M., 2016. Managing customer experience and relationships: A strategic framework. John Wiley & Sons.

Rahimi, R., 2017. Customer relationship management (people, process and technology) and organisational culture in hotels: Which traits matter?. International Journal of Contemporary Hospitality Management, 29(5), pp.1380-1402.

Shulga, L. and Tanford, S., 2018. Measuring perceptions of fairness of loyalty program members. Journal of Hospitality Marketing & Management, 27(3), pp.346-365.

Smith, G.E., 2015. The Opt-Out Effect: Marketing Strategies that Empower