To succeed in the marketplace, companies must embrace a competitive strategy. Michael Treacy and Fred Wiersma in their book, The Discipline of Market Leaders describes three generic competitive strategies, or value disciplines: operational excellence, customer intimacy and product leadership (Treacy & Wiersema, 1995).
1-Soutwest Airlines uses operational excellence as a competitive strategy.
2-Virgin Atlantic uses customer intimacy as a competitive strategy.
3-Australia’s domestic airline uses product leadership as a competitive strategy.
Nowadays, the market in the airline industry is more competitive than it used to be. Therefore, airlines have to find a way to differentiate them selves from the competition. Product and prices are just not cutting it anymore. People want the services that are provided to them to be adequate and of great quality. A questionnaire, which was completed by over a 100 service organizations gave the results that over 80% said they were either pursuing a strategy of operational excellence, customer intimacy, or a combination of the two (“Review Critical Eye”, 2005)
Using Virgin Atlantic as an example. Virgin Atlantic can’t hold a candle if we compare it to United Airlines, American Airlines or Delta. Yet, they have a good competitive strategy as the focus on customer intimacy. “So Virgin Atlantic set out to cater to this target audience and make their experience fun and ultra cool. They put a bar onboard, passengers can get a massage, or a nail clean up and food and drink are always top quality (“How Virgin Atlantic’s Marketing Nails It”, 2013).
KLM is another great example of an airline that focuses on customer intimacy. They also made great use of the data that they have acquired from their passengers to make the experience more personal and with more value. The example that is being talked about was the ‘KLM Surprise’. In this campaign KLM used social media as their source of information to get on a more personal level of interaction with their customers. “As passengers arrived at security checkpoints and gates, flight attendants were there to greet them by name and give them a personalized gift — something that the passenger could use on his or her trip, or enjoy when they returned home” (“KLM Surprise: How a Little Research Earned 1,000,000 Impressions on Twitter”, 2011). This a great way to show how organizations can use data to create customer intimacy.
It is believed that airlines still have a window of opportunity to improve by using the data. They have to focus more and more on the customer intimacy. Especially now that technology is still rapidly evolving day by day. They have to think of ways to connect and stay connected with their customers to give that individual value preposition to their customers. They have and can get the data, now they just have to use it in their own creative ways in their CRM strategy.
How Virgin Atlantic’s Marketing Nails It. (2013). Inc.com. Retrieved 18 September 2016, from http://www.inc.com/janine-popick/how-virgin-atlantics-marketing-nails-it.html
KLM Surprise: How a Little Research Earned 1,000,000 Impressions on Twitter. (2011). Digett. Retrieved 18 September 2016, from http://www.digett.com/2011/01/11/klm-surprise-how-little-research-earned-1000000-impressions-twitter
Review Critical Eye. (2005). Retrieved 18 September 2016, from https://www.ashridge.org.uk/Media-Library/Ashridge/PDFs/Publications/OperationalExcellence-CustomerIntimacy.pdf
Treacy, M. & Wiersema, F. (1995). The discipline of market leaders. Reading, Mass.: Addison-Wesley Pub. Co.