Sample Business Paper on CRM loyalty management in Airbnb

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
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
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.,
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
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