With profitability returning to the airline industry the battle is on to win each and every customer. Businesses know that
success is not just a result of understanding their customers. They also need to try and understand what those same
customers are doing with their competitors and what those competitors are doing to win those customers.
Airline Information, in conjunction with ICLP, conducted a survey to establish how airlines are addressing these issues and
improving their profitability. Understanding the customer experience is crucial to that and how airlines are looking to extract
greater value beyond the customer journey.
Nearly every region was represented and the majority of respondents were from the more “traditional” and “full service”
airlines. Perhaps this is because full service carriers are not at the same level as others in exploiting value from the full
customer journey, or maybe, they view this as a way of differentiating themselves from the low cost carriers? However, the
survey generated some very interesting results that offer food for thought in the battle for customers.
Business priorities and opportunities
The respondents put the customer firmly at the centre of their priorities with improving the customer experience being the
number one choice. This not only supports the retention of existing customers but the acquisition of new ones. And if you
have more customers, you can then cross and up sell more to them.
Increasing revenue was also a key priority, however, what was interesting was that the sale of ancillary products came ahead
of selling more tickets. This reinforces the commercial significance of partners in helping to achieve these objectives. Interestingly enough, reducing cost of providing customer support was the second least important priority with reducing mileage liability being of the least concern.
Just focussing on revenue doesn’t necessarily drive profitability unless you can control costs. It was not unusual to learn
that
airlines were most keen to reduce costs through continuing to drive a customer behaviour shift to more self-service
channels.
This trend has been seen in other surveys of both airlines and passengers although the second choice came as a surprise
– evaluating the activities and performance of the loyalty program. It seems that loyalty is important but not at any cost.
Indeed the third most popular choice is to outsource back office services and processing supporting the view that airlines
are refocusing on their expertise on core activities and efficiencies.
To be able to improve the customer experience means being able to understand and see the journey through the customers
eyes. A fascinating insight was that whilst just over 50% of airlines have identified all of the touch points, 25% of them had
not implemented any improvements. At least those airlines are ahead of the 21% of respondents who haven’t yet mapped
out the customer journey! This reveals a huge opportunity for airlines to make a real difference to their customer experience
at the touch points which matter most to their passengers.
Improving customer interaction
Much has been written and spoken about in terms of airlines and social media and what is being called “social loyalty”.
So, we were keen to get an idea of how the airlines view particular communication channels, including Twitter and Facebook.
Managing inbound customer queries, whether on the phone or via email were the most resource intensive channels.
No
wonder airlines are keen to move people to self service and online channels.
Web chat was regarded as the least resource intensive channel by a long way with Twitter and Facebook slightly behind.
Those which are the most resource intensive are not necessarily the channels which should receive more focus and
investment to encourage greater interaction and customer loyalty. For example, whilst the website was not particularly
resource intensive, almost 70% of respondents think is the best channel for interaction and should have the focus for
investment.
Facebook is the next most popular vote for further investment, probably due to its widespread use and acceptance within the
airline’s customer community. Whilst many airlines have a presence, they could perceive a significant opportunity to
generate greater engagement through more attention and proactivity.
Customer experience is clearly something that resonates with airlines and especially the respondents to this survey. When
asked where their efforts will be focussed in the year ahead it was perhaps not surprising that they wanted to improve
service
and support to customers and FFP members across all channels – which given that passengers don’t make a
channel distinction is good news.
However, it seems that there is an increasing focus on new channels such as mobile and social media given that this is
now
what customers expect and are demanding. Airlines also want to improve the customer experience from delivering
greater relevant and personalised communications. This clearly will result from applying the insights of sophisticated data
analysis and modelling activities.
The final surprise is that increasing engagement across more traditional channels is of least interest. Airlines have
numerous ways to interact with customers in the real world and given that this is often where it really matters, it would be a
sure way of making a great customer experience! |
