The way to become excellent in CRM – Case study on KLM

The excellent customer relationship management that airline company KLM performs nowadays, is connected with a history dating back to the beginning of the 21st century. Although the competitive aviation industry in Europe started around 1992 when the European Union passed legislation to deregulate the industry (Viaene & Cumps, 2005), this caused that all airline companies could fly where and when they wanted. Since then, the market became competitive, though it took 10 years for KLM to implement a CRM strategy.

Their first successful attempt was not until 2003 with the new Executive VP Commercial, at the time KLM was more focussed on operational excellence rather then customer intimacy, when they realized the opportunities of personalized services and consistent service delivery. Their goal shifted to becoming a truly customer centric organization, where a customer database was essential in executing their new customer centric operations. The name of this new project was Customer Insight, Analysis and Opportunities (CIAO). KLM claims that CRM is impossible without a customer database, and that there is always more valuable information in such a database then the information used for example for frequent fliers or rewarding systems. KLM could, due to the integrated customer database, campaign more targeted instead of launching one huge campaign every year, this increased KLM’s sales a lot and at the same time reduced costs in other aspects.

KLM’s strategy is translated into this mission: “We enable optimal customer interaction and profitability by shaping the KLM into a customer centric organization”. Within this strategy they defined three goals: more personalized and consistent service delivery across all interaction points; more customer profit based steering; more customer centric KLM organization. This was set up in 2003/2004, when social media was not that present yet as it is nowadays, but also in this regard KLM responds very well, launching social media campaigns too.

An example of a success story of KLM was the setting up of the “surprise team” who took care of analysing social media (Twitter, LinkedIn and Facebook) to then research the customers that were mentioning KLM on their social media so that they were able to come up with a personalized gift that the surprise team could give when the customers made use of KLM’s services. This resulted in that KLM was mentioned over a million times on social media just because connections of the ones surprised also mentioned KLM and so the campaign spread quickly.

KLM has learned many lessons over the years, trying to become a customer centric organization which was a success because of among other things: targeted and personalized campaigns, a systematically integrated customer database and a strong head with a great vision for the CRM department. So although it took quite some time for KLM to realize the opportunities of CRM and to actually implement and perform CRM in an excellent way, in the end it has been very profitable for KLM to do so, not only looking at ROAS but also operations that were simplified for the good of the customer and thus required less money.

Sources:
Hudson, S. & Thal, K. (2012) The Impact of Social Media on the Consumer Decision Process: Implications for Tourism Marketing
KLM Royal Dutch Airlines (2004) Annual report 2003/2004, KLM Royal Dutch Airlines, Amstelveen, The Netherlands.
Unknown, (2010) KLM Surprise, Youtube KLM Royal Dutch Airlines, retrieved from: https://www.youtube.com/watch?v=pqHWAE8GDEk

 

 

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