Mapping and valuing airline customers

Going on a trip starts by coming up with ideas for the destination, fantasizing about all the things you will experience during your travels. After you start searching for accommodation and transportation, deciding what to book and which company you want to spend your money on. This process is called ‘the customer journey’, they are all the steps a customer takes in building their relationship with a particular brand (DJS Research, 2012).

Especially for airline customers the complete experience of travelling by airplane matters as much as the final destination. Every touchpoint with the airline should be at least satisfactory, otherwise the chances of the customer returning are very small. 91% of customers who have a bad experience with an airline, in any step of the customer journey, will opt for another airline next time they are flying and no less than 12 positive experiences are needed to forget about a bad one.

Something that could help airlines improve these touchpoints is to adopt the customer journey mapping strategy. It helps to clarify what each individual customer expects at each touchpoint and what the fitting service or product is the airline could offer to fulfill these expectations. The idea of customer journey mapping is to focus on the responses customers have while reaching each touchpoint. To separate the customers, airlines should formulate personas. These personas should represent the primary groups of travelers who fly with the airline. After this has been established and the entire customer journey has been mapped, each customer should be treated differently based on their needs and wants.

By taking these steps airlines will also be able to determine the value of each persona to the company. They will probably discover that some groups bring more value than others, and that the value will also differentiate per touchpoint (Dent, n.d.). In the past businesses used to determine the value of each customer solely based on the transactions they made with their firm, but this is not sufficient anymore. Instead, a Customer’s Engagement Value (CEV) should be valued, this is essential to avoid over- or undervaluation of customers.

A customer’s CEV is comprised of four separate elements:

  1. Customer Lifetime Value (purchase behavior);
  2. Customer Referral Value (tendency to refer new clients);
  3. Customer Influencer Value (how does the customer influence other customers, current and future, by word of mouth etc.);
  4. Customer Knowledge Value (added value by providing feedback).

When CEV is implemented in the right way it can create a setting where customers are highly engaged with the airline, which will, in the long run, drive higher profits. CEV is a relatively new concept, but has already proven to build more efficient and effective marketing strategies to keep, gain and target customers. (Kumar et al, 2010)

Author: Eva Manrique

Sources:
Dent, J. (n.d.). Customer Journey Mapping: A Walk In Customer’s Shoes. Retrieved September 26, 2016 from http://www.ascendforairlines.com/sites/default/files/article_0.pdf
Kumar et al. 2010. Undervalued or Overvalued Customers: Capturing Total Customer Engagement Value. Retrieved September 26, 2016 from http://jsr.sagepub.com.proxy1.dom1.nhtv.nl/content/13/3/297.full.pdf+html
What is the Customer Journey? (n.d.). Retrieved September 26, 2016, from http://marketresearchworld.net/content/view/3684/78/
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