Airline Loyalty Marketing, FFP, Ancillary Revenue, eCommerce, Payments:
At the end of what has been a banner year in terms of airline revenues, now is a good time to look at the history of how airlines look at their customers. After decades of initiatives about "customer centric organisations" (the 1980s), "loyalty and CRM" (the 1990s) and "customer experience management" (the 2000s), business leaders are finally discovering with dismay that the customer of the 2010s is less loyal than ever. What happened?
What has happened is actually the logical consequence of the brutal commoditization of the airline business. All (well... most) airlines are basically offering the same thing- transporting loads of people from Point A to Point B, using the same types of aircraft, the same airports and even the same handling agents! Satisfying customers no longer guarantees their loyalty, as competitors satisfy the same needs. But, does this mean that only the cheapest airlines survive?
Well, of course not! Sure, costs are key to remaining competitive, but only one airline can be "the cheapest". Luckily, the others have no need to be just another Ryanair. Commoditizing yourself is a formula for disaster unless you are the real cost leader! However, it is amazing to watch to what extent many airline companies are losing opportunities to create new value propositions for their customers.
We are experiencing the second revolution of the airline industry. The first happened after deregulation starting in the 1970s. With the arrival of true competition, the age of "pilot-CEOs" ended, giving way to a new reality, dominated by "financial CEOs".
But now, as the low-cost-revolution hardly permits any new turns of the "cost screw,"
the age of the "customer CEO" has arrived. It's a new breed of leader genuinely concerned about serving customers, employees and now, for the first time, also the communities the airline is operating to. Reputation is about genuine leadership, not
PR stunts orchestrated by external consultants.
Only Southwest Airlines has been able to combine both revolutions consistently now for nearly 40 years - any doubts about ROI for consistent customer experience management? Today, airlines must be able to create new value-driven propositions
for which customers will be happy to pay. Obsession with cost must give way to obsession with offering value.
This requires a whole new strategic alignment of the organisation. You can generate active customer loyalty only by managing expectations and service levels. It's okay to define a zero-expectations policy (like Ryanair). However, not managing them is not
an option as you lose control over your value proposition.
This is only one perspective of why Customer Experience Management is giving way to Customer Experience Leadership. It's a holistic strategic management approach and, yes; it's finally penetrating the airline industry.
Many airlines are creating Customer Experience VP roles. Some are doing so because they genuinely want to inject a new customer value centered leadership style into their organisations. Others only re-label their old-style "customer service department" or
bury it somewhere in their organisation chart at the same level as "female marketing," sending a message to employees and customers that Customer Experience guided value creation is just "one more thing".
Customer Experience Leadership provides airlines both with a strategic realignment opportunity and a set of practical management tools to focus on value for customers and stakeholders, generating a measurable ROI. You may want to have a look at my airline customer experience management leadership blog: http://ourpax.com
But, how does an airline get started with a customer experience corporate strategy?
A number of good books, consultants, workshops and seminars are available, but few are focused on the airline industry specifically. As a result of the increasing industry specific demand, AI and airline Customer Experience specialist, avionline, have teamed up to publicize industry best practices and provide you with tools, resources and forums to effectively implement customer experience leadership in your airline.Stay tuned in 2011!
Rainer Uphoff, MBA in Aviation Management by Embry-Riddle & ESADE PMD. Businessman, consultant and senior executive/board member of several aviation and communications companies. Was CEO of Iberline and executed several airline corporate turnaround projects.
What has happened is actually the logical consequence of the brutal commoditization of the airline business. All (well... most) airlines are basically offering the same thing- transporting loads of people from Point A to Point B, using the same types of aircraft, the same airports and even the same handling agents! Satisfying customers no longer guarantees their loyalty, as competitors satisfy the same needs. But, does this mean that only the cheapest airlines survive?
Well, of course not! Sure, costs are key to remaining competitive, but only one airline can be "the cheapest". Luckily, the others have no need to be just another Ryanair. Commoditizing yourself is a formula for disaster unless you are the real cost leader! However, it is amazing to watch to what extent many airline companies are losing opportunities to create new value propositions for their customers.
We are experiencing the second revolution of the airline industry. The first happened after deregulation starting in the 1970s. With the arrival of true competition, the age of "pilot-CEOs" ended, giving way to a new reality, dominated by "financial CEOs".
But now, as the low-cost-revolution hardly permits any new turns of the "cost screw,"
the age of the "customer CEO" has arrived. It's a new breed of leader genuinely concerned about serving customers, employees and now, for the first time, also the communities the airline is operating to. Reputation is about genuine leadership, not
PR stunts orchestrated by external consultants.
Only Southwest Airlines has been able to combine both revolutions consistently now for nearly 40 years - any doubts about ROI for consistent customer experience management? Today, airlines must be able to create new value-driven propositions
for which customers will be happy to pay. Obsession with cost must give way to obsession with offering value.
This requires a whole new strategic alignment of the organisation. You can generate active customer loyalty only by managing expectations and service levels. It's okay to define a zero-expectations policy (like Ryanair). However, not managing them is not
an option as you lose control over your value proposition.
This is only one perspective of why Customer Experience Management is giving way to Customer Experience Leadership. It's a holistic strategic management approach and, yes; it's finally penetrating the airline industry.
Many airlines are creating Customer Experience VP roles. Some are doing so because they genuinely want to inject a new customer value centered leadership style into their organisations. Others only re-label their old-style "customer service department" or
bury it somewhere in their organisation chart at the same level as "female marketing," sending a message to employees and customers that Customer Experience guided value creation is just "one more thing".
Customer Experience Leadership provides airlines both with a strategic realignment opportunity and a set of practical management tools to focus on value for customers and stakeholders, generating a measurable ROI. You may want to have a look at my airline customer experience management leadership blog: http://ourpax.com
But, how does an airline get started with a customer experience corporate strategy?
A number of good books, consultants, workshops and seminars are available, but few are focused on the airline industry specifically. As a result of the increasing industry specific demand, AI and airline Customer Experience specialist, avionline, have teamed up to publicize industry best practices and provide you with tools, resources and forums to effectively implement customer experience leadership in your airline.Stay tuned in 2011!
Rainer Uphoff, MBA in Aviation Management by Embry-Riddle & ESADE PMD. Businessman, consultant and senior executive/board member of several aviation and communications companies. Was CEO of Iberline and executed several airline corporate turnaround projects.
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