CRM opportunities in Airline Industry
CRM opportunities in Airline
Industry
Trends impacting airline industry
CRM for Airlines
From Satisfaction to Loyalty
Bridge the divide
Bottom-line
Trends impacting airline industry
CRM for Airlines
From Satisfaction to Loyalty
Bridge the divide
Bottom-line
Decrease in Customer
Satisfaction
TRENDS IMPACTING AIRLINES & STRATEGIC
IMPERATIVES
Rising cost
Constraints in existing infrastructure
Global passengers to rise by 5 billion in 2010 and more than 9 billion by 2025
Passenger traffic in Africa forecasted to increase by at- least 7% and Asia –Pac by 6.8% a year, respectively, by 2010
Asia will be the world’s largest aviation market by 2025trends – manifold increase
in air travel !!!
40% of satisfied customers
switch suppliers without
hesitation
65% to 85% of customers
who choose a new supplier
claim to be satisfied and
very satisfied with former
supplier
trends – customer satisfaction
.
85% of customers claim to
be satisfied, yet willing to
switch to other suppliers
In the 12 months before
Feb 07, there was a
49.6% increase in the
number of passenger
complaints
trends – customer satisfaction
trends - customer satisfaction
Airlines
P ostal Service
Network/Cable TV News
Hotels
Limited-Service Restaurants
Energy Utilities
Express Delivery
Newspapers
Motion P ictures
Computer Software
Fixed Line Telephone Service
Wireless Telephone Service Cellular Telephones
Cable & Satellite TV
Hospitals
-2,0%
-1,0%
0,0%
1,0%
2,0%
50 75 100
Q1 2006 customer satisfaction (out of 100 points)
CA
GR
199
4-20
05
Source: “The American Customer Satisfaction Index” University of Michigan. 2006. IBM analysis, “Air Travel Consumer Report.” U.S. Department of Transportation. April 2007
.
Customers View• “While consumers agree that price is important, they
would choose a slightly higher rate for added service”
• 83% of the travellers say that personalised service & attention to their needs provides value, rather than price- defines a good deal for customers
• Service differentiation is the foundation of brand equity.
• Brand is a source of sustainable competitive advantage
CUSTOMERS EXPECTATIONSFrequent flyers expect-
1- Allow me to contact you through the channel of my choice
2- Recognize & Reward my value
3- Use the information you have about me.
4- Treat me as an individual.
5- Treat me consistently
6- Solve my problems in first time
7- Make amends when things go wrong.
Trends impacting airline industry
CRM for Airlines
From Satisfaction to Loyalty
Bridge the divide
Bottom-line
agenda
CRM In Airlines for… Operational purposes-
Automation of basic business processes (marketing, sales, service)
Analytical purposes-Analysis of customer data
and behavior using business intelligence
Collaborative purposes-Communicating with
clients CRM - ideology
crm for airlines
Pre-Airport Airport In-Flight Post-Flight
Promotion notification
Travel planning
Reservations and booking
Ticketing
Flight delay notification
Virtual check-in and seat assignment
Transportation to airport and parking
Frequent flyer account management
Airport check-in and seat assignment
Baggage check
Security
Airport shopping or dining
Club room access
Airport waiting areas
Boarding pass and boarding
Gate location
Baggage storage
Entertainment
Meals
Shopping
Connectivity
Gate connections
Baggage claim information
Baggage pick-up
Customer service and complaint management
Transportation from airport and parking
Frequent flyer account management
Trends impacting airline industry
CRM for Airlines
From Satisfaction to Loyalty
Bridge the divide
Bottom-line
agenda
securing customer value
Customers who are “satisfied” may still switch
Customers who are “dissatisfied” may ‘stay loyal’
Majority of customers can be “transformed” into loyal customers
To secure your customer….
Accumulate guest-
centric customer
intelligence
Market to your most
valuable customers
Trends impacting airline industry
CRM for Airlines
From Satisfaction to Loyalty
Bridge the divide
Bottom-line
agenda
Bridge the divide….
Member
Value
Seg
men
tati
on
Communication
Reta
in
Customer
Value
Con
vers
ion
Seg
men
tati
on
Communication
Example-
KLM MEETS CRM
• KLM differentiates itself from its competition by offering a superior customer experience at every interaction point with its customers.
• Every customer interaction was to be perceived as both a great opportunity to bond with customers or prospects.
• The ultimate aim for KLM was to infuse CRM – as a business philosophy into the complete KLM Circle of Contacts and make the relationship with its customers as intimate as possible.
• A first major CRM project was set up in 1997.
KLM Circle of Contacts
CRM benefits1- Decreased service costs2- Reduced Brand marketing spend3- Increased revenue from target customers.4- An increase of 2.5 % in Revenue.5- Increase in $ 5bn for passenger revenue6- 40% of tracked customer
This all turns out to be $ 50 million per year
Trends impacting airline industry
CRM for Airlines
From Satisfaction to Loyalty
Bridge the divide
Bottom-line
agenda
Bottom-line !!!!
THANK YOU
Thank You