Airline Customer Experience Leadership, by Rainer Uphoff (Keynote at Worldticket's 2010 Copenhagen Customer Conference)
Post on 20-Oct-2014
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Sell-More-Seats®
Customer Experience Leadership: The ultimate strategic alignment tool
My name is Rainer Uphoff and I am avionline
Let’s go!
Customer Experience
Leadership
Customer Experience Leadership
What is so new about Customer Experience
Leadership?
“Customer is King” is not new at all!
Customer Experience Leadership
1980s – Customer Centric Company 1990s – CRM, Loyalty Management 2000s – Customer Experience
Customer Experience Leadership
RESULTS?
Customer Experience Leadership
Surprise!
The customer is less loyal than ever.
Customer Experience Leadership
2000: Customer Experience Management (CEM) was born
In the airline industry, this
coincided with something else
?
Customer Experience Leadership
Let’s look at aviation history
Customer Experience Leadership
1930s – 1970s Regulated Environment:
the pilot-CEO is King!
Customer Experience Leadership
1970s – 2010s Deregulation and Competition:
The CFO-CEO is King!
Customer Experience Leadership
And then, something happened:
Key words slide
Customer Experience Leadership
Customer Experience Leadership
Where is the limit?
Customer Experience Leadership
What can we do when shaving the skull is no longer an
option ?
Customer Experience Leadership
The time of the
customer-CEO has come
!
Customer Experience Leadership
Let’s remember: 1980s – Customer Centric Company 1990s – CRM, Loyalty Management 2000s –
Let’s talk about STRATEGY
Differentiate!
LISTEN, LISTEN, LISTEN
Manage expectations (learn from Ryanair)
Offer VALUE, VALUE, VALUE
Deliver what you promised!
Differentiate!
Michael Porter:
either chose cost leadership or differentiation strategy.
Some leaders are doing both.
Differentiate!
Porter: either chose cost leadership or differentiation
strategy.
Some are leaders for doing both.
Differentiate!
I know, you are a regional carrier.
Is geographical differentiation enough?
Anybody here wanting to be the
SIA, Jetblue, Ryanair of the regionals?
Differentiate!
Strategic imperative: regional startup airline reaches competitive relevance in YEAR 3
Competition recognises opportunity
LISTEN, LISTEN, LISTEN
Do you know what your customers really want?
Do your surveys say what you
want to hear?
Even family businesses need to LISTEN!
LISTEN, LISTEN, LISTEN
10 million views! You can’t hide… (If you can’t see the video, search or click for “United breaks guitars” on Youtube).
LISTEN, LISTEN, LISTEN
Social Media are EFFICIENT
and FREE LISTENING
tools.
Are you using them?
Manage expectations
Go back to the drawing board!
Perceived service quality – Expectation (created)
= Value –> Profit
Manage expectations
Learn from Ryanair!
Expectations MUST be thoroughly managed.
Otherwise, you have NO CONTROL
over your value proposition.
Manage expectations
Overpromise: long term problem
⇒ Brand equity declines
Underpromise: short term problem
⇒ unrealised yield potential
Offer VALUE, VALUE, VALUE
Passengers…
-buy through the same booking system (except WorldTicket’s!)
-are extorted to pay the same fees
-are “dispatched” by the same handling agent
-fly on the same aircraft…
Offer VALUE, VALUE, VALUE
CFO-CEOs (+consultants) are the scientists of the XXI century: They discovered the SERVICE ATOM =the perfect COMMODITY
Offer VALUE, VALUE, VALUE
Service unbundling and cost cutting has COMODITISED air
transportation.
Only COST LEADERS are successful in the commodity
business.
But there is only ONE Ryanair.
Offer VALUE, VALUE, VALUE
Go back to the drawing board…
DESIGN services VALUED by customers.
Find IT systems to support the value creating processes.
Be INNOVATIVE.
Offer VALUE, VALUE, VALUE
Which meal do your prefer?
THIS
OR THIS? PRICE: 9 € VALUE: !?!
Watch out for AA’s practical jokes on napkins
Offer VALUE, VALUE, VALUE
Ancillary revenues must
generate VALUE, not be a TAX
Offer VALUE, VALUE, VALUE
You LOVE to check-in your baggage and appreciate the value when being invited to pay for this beloved service, don’t you?
Offer VALUE, VALUE, VALUE
Fortunately, some airlines have changed their mindset already from thinking COST to thinking VALUE!
Offer VALUE, VALUE, VALUE
Repeat with me:
Don’t (only) think cost.
THINK VALUE!
Deliver what you promised!
Go back to the drawing board…
Deliver beyond your promises.
Deliver what you promised!
Let’s do it!
(The Customer Experience Journey starts in the WEB!)
Deliver what you promised!
First, get the basics right!
Hey guys, we’re in 2010 !
Quirks – WHAT?
C’mon – you can’t afford to do that!
Deliver what you promised!
Second, understand your customer+his/her preferences!
That’s smart.
NG pax prefer
chat over phone
Deliver what you promised!
Third, get your organisation ready.
Make the customer your strategic goal.
Gain support from the top.
Obtain buy-in from all stakeholders.
Deliver what you promised!
Without an adequate strategic alignment model, you will lose efficiency.
Environment
Strategy
Competencies
Organisation
Process
People
Structure
Culture
are executed by…
is supported by…
determines aligned…
Deliver what you promised!
Fourth: know your corporate silos.
Is maintenance as urgency driven as the gate agent?
Is marketing making promises that operations can’t keep?
Do you even analyse this?
Deliver what you promised!
Fifth: get the metrics right.
Do you know what to measure?
Do you use industry best practice metrics, such as the NPS?
Do you measure perception gaps?
Deliver what you promised!
Sixth: align the organisation
Do you have clear customer related targets?
Do you link these targets to the corporate motivation system?
Do you hire the right people and know how to find them?
Deliver what you promised!
Seventh, know and apply the tools
Voice of Customer
Customer Experience Journey Mapping
Service Design
Audits
…
Customer Experience Mapping
Scenario 1
« We have seen promotions. We need a lowcost flight for a weekend in Prague »
Scenario 2
« We have a business meeting in Lisbon on 02/11. »
Deliver what you promised!
Get Customer Experience Leadership
Are you using Customer Experience Management as a STRATEGIC
alignment tool?
Is the president / CEO your customer champion?
(BTW, he can be coached into the role…)
Customer Experience Leadership
Nice, but
SHOW ME THE MONEY!
Show me the money!
Customer Excellence to strengthen the organization vs. the FIVE COMPTETITIVE FORCES:
1. Customer negotiation power 2. Provider negotiation power 3. Threat of New Market Entrants 4. Threat of substitutive products 5. Rivalry among competitors
Show me the money!
Customer Experience Leadership is not “nice to have”.
Show me the money!
1. Customer negotiation power Give value: customers will WANT to buy from you
2. Provider negotiation power Grow, be reliable: providers will WANT to work with you
3. Threat of New Market Entrants Differentiate by value: give new entrants a HARD TIME
4. Threat of substitutive products Innovate to solve customers’ real needs: they’ll stay with you
5. Rivalry among competitors If your business is built around “the customer”, you have NOTHING TO FEAR
Show me the money!
Customer-ROI is KING!
Are you able to recognise toxic profits?
Are you computing CEM value creation?
What about customer equity, brand equity, stockholder value?
Think long-term!
Show me the money!
Without CEM, brand credibility deteriorates and customer equity declines.
This destroys long term value while short term cash flow still remains positive.
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Example: 5% yearly decline in brand credibility translates into slow cash flow reduction, but customer NPV disaster.
Show me the money!
And remember:
Ancillary Revenues must come from value you generated.
Otherwise you are charging a TAX.
Who loves the taxman?
Visit ourpax.com (not “theirpax.com”)
Customer Experience Leadership
Any questions? Thank you!
Email: rainer@uphoff.com
Skype: ruphoff Blog: www.ourpax.com
Twitter: rainerup
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