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