Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

Key Words:
Customer relationship management (CRM), information technology, customer loyalty, service quality, 
perceived value, quality-value-loyalty chain model. 
INTRODUCTION 
Many hotel brands are implementing frequent guest programs that allow their hotel guests to accumulate 
redeemable points and/or miles. For example, Hilton HHonors and Marriot Rewards offer cumulative points or 
miles to their patrons, so their guests can redeem them later for complimentary hotel stays or hotel room upgrade.
Also, frequent guest programs present member-exclusive privileges such as dedicated reservation service, expedited 
check-in, late checkout and other devoted services (
Hilton HHonors
, 2006; 
Marriott Rewards
, 2006).
The key objectives of such frequent guest programs, which are often called loyalty programs, are to retain 
existing customers and to motivate customers to remain loyal and to buy again (Dyché, 2002). While a loyalty 
program rewards repeated patronage, its impact on customer loyalty towards an entity (i.e. brand, product, or 
service) is often questionable (Baloglu, 2002; Dick & Basu, 1994; Mattila, 2006; Yi & Jeon, 2003). Rewarding 
repeated purchases makes customers loyal to the program rather than to an entity, and program loyalty is less 
desirable because repeated patronage will not last when competitors offer a better deal (Baloglu, 2002; Dowling & 
Uncles, 1997; O'Brien & Jones, 1995; Yi & Jeon, 2003). Therefore, affective antecedents such as emotion and 
affective commitment, rather than rewards themselves, may be determinants to facilitate customer loyalty (Baloglu, 
2002; Mattila, 2006). 
While frequent or rewards programs are often developed under customer relationship management (CRM) 
technology (Chen & Popvich, 2003; Fitzgibbon & White, 2005; Winer, 2001), few research studies have been 
completed to examine CRM and its impact on customer loyalty. CRM technology tracks and analyzes customer 
history and behavior, so loyalty programs driven by CRM technology can identify and reward valuable customers 
(Chen & Popvich, 2003). However, that is not the overall function of CRM. CRM can deliver a higher level of 
customer satisfaction via customization, simplicity, and convenience for completing transactions (Chen & Popvich, 
2003; Winer, 2001). Fitzgibbon and White (2005) examined CRM and loyalty strategy in financial services firm 
while Lee-Kelley, Gilbert and Mannicom (2003) investigated the relationship between CRM and customer loyalty in 
an e-retailer context.
In this paper, CRM technology and its impact on customer loyalty in hospitality context will be examined 
using Parasuram and Grewal’s quality-value-loyalty chain model (Parasuraman & Grewal, 2000). The purpose of 
this research was to investigate how CRM affects customer perceptions of service quality (i.e. reliability, 
responsiveness, assurance, empathy and tangibility), to examine how the five service dimensions consequently 

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