Customization for business travelers

The airline industry offers many products and services for their customers. For their business travel customers, they have customized more expensive products and services. Those customers will eventually be more profitable to the company because they pay more to the airline industry. The company does consider the business passengers as more valuable customers than the regular ones, as the business passengers are more profitable.

In the highly competitive airline industry, it is important to get the right customers in to their business. The customer lifetime pyramid can reflect on this case. Most of the customers will start at the bottom of the pyramid, this is in the timeframe of when they are in the business. Over the time, it is important that the company is pushing the customer up in the pyramid and sell them products and services, in the case of the business travelers: more expensive products and services. Last but not least, the top of the pyramid indicates the customers that have been kept into the business by the company. Here, the customers are loyal as well as valuable, and most profitable for the business.

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To maintain a valuable relationship between a company and a customer, customization is an important aspect that has to be taken into consideration, especially in the airline industry.

According to the article Navigate the future of customer service by Kate Leggett (2013), nowadays customers have higher expectations when it comes to personalized service from companies that they interact with. When the customer has a question regarding a product or service, they want to find an answer as soon as possible for example on the company’s website.
The new United Airlines CEO Oscar Munoz has contacted his loyal customers and promised them that the airline will do better in the future. Those loyal customers he reached out to are a member of United’s frequent flying program “MileagePlus”. He promises the loyal customers to restore faith in the company again, after a number of negative publicity such as many delays. Especially for the business class travelers who might have an important meeting, it is important to arrive on time and have a flexible time schedule. The customer is having its expectations of an airline and most of the time assumes that everything will go in the right order. Oscar has said that he is committed to get to know their customers’ needs and desires in order to fulfil them with United’s services (Chew, J., 2015)

Stuart Crawford-Browne (2013) has concluded that a company should focus on the experience of the guest to ensure loyalty from the customer’s side and that they will remain profitable. A company can make sure to be profitable when selling high-standard products to the upper market. Via customization, a product or service will become more personal to a customer. An example in the airline industry is Sky priority, a customized service, created for the more up-market travelers from KLM and many other airlines. This service is a new way to satisfy their luxury – business class customers. During the customer’s trip, he has priority at the moments where other passengers have to wait in line, for example at the luggage drop off and when boarding on the plane (Sky team, 2012).
This type of customization ensures returning and loyal business class customers for the company. Sky priority offers a personalized experience, which nowadays is an important asset within the airline industry. Moreover, Sky priority has chosen an exceptionally well market – the luxury business passengers. They are more profitable as they are able to spend more money on products and services.

Bibliography

Stuart Crawford-Browne, Designing a branded customer experience, GfK, March 2013

Chew, J., (2015). United’s new CEO to customers: ‘We can do better’.Fortune. Retrieved from: http://fortune.com/2015/09/16/united-ceo-letter-munoz/

Photo credits: Oliver Kramp used under cc 2.0
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2 thoughts on “Customization for business travelers”

  1. The airline industry is already for several decades one of the least profitable industries, according to Porter. One of the reasons is that it is a highly capital intensive service industry, that only makes a profit when the occupancy rates are high (in the traditional aireline companies above 85-90%). The consequence is that yield management plays a very dominant role in this industry. The domiance of capacity management can ofcourse have a negative influence on the desire to service (business) travelers in a way you exceed there expectations. How can we deal with that?

    Liked by 1 person

    1. Dear Mr. Peelen,

      Thank you for taking your time to express your opinion on the blog. I very much appreciate it. Regarding your point of view on the high expecations of the customer, I think it is of crucial importance for the airline industry to track your customers in the right way. This means that the business should collect interesting data from the customer, to create the right and most applicable product or service. For example, United Airlines does have a new approach regarding customer data collection: “collect, data, act”, which gives them the opportunity to collect customer data from the past (such as previous destinations and product purchases) and create tailor made products for the customer, based on past experiences. United’s new approach has led to an increase in year-over-year ancillary revenue of more than 15 percent, according to Fortune.

      Like

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