Social media tools that support the social media arena within the airline industry.

The airline industry has three different engagement arenas: physical arena, which is mostly about the appearance of the industry, the digital arena which includes websites and mobile applications of the industry or business and lastly there is the social media arena, the engagement arena which became very important over the past few decades, and includes all the different social media platforms (Peelen, E. & Beltman, R., 2013).

Within the airline industry, the social media arena has grown extensively. Most airlines are having their own business accounts on Facebook, Twitter, Instagram and even Pinterest. The social media platforms and their interesting tools have enabled the airline industry to engage with their customers in a more direct way.

An effective tool on Twitter is the Retweet button. An airline can post a tweet and a customer has the ability to Retweet the tweet, in order to show their followers what the airline just tweeted. The tweet that the airline just posted, will be seen by their followers as well. Basically, the follower who retweeted the tweet of the airline company, helped the business to reach more people. The prospects, the potential customers (Peelen, E. & Beltman, R., 2013), can be reached as well and might be brought in the customer relationship pyramid when he or she starts to follow the airline’s account and get more information about the company and might eventually purchase a product or service.

Moreover, airlines have set their own hashtags in order to create more awareness and to reach a bigger audience. Turkish airlines are using the hashtag #GuessWhere on their posts on Twitter. This ensures engagement with the customer. They are asking a question, and use an additional hashtag to it. Many followers respond or retweet the post, which gives the post a higher reach (Business2community, 2015).
p 1

Source: Business2community

Furthermore, there is the phenomenon of User Generated Content. According to Mangold & Faulds (2009), around half of the content on airline’s Facebook accounts is content produced and delivered by the customer. This material is being used to advertise in a further stage on one of the social media platforms, including the name of the customer who took the photo. Transavia uses #wingletwednesday, this hashtag is being used on Wednesdays, and basically asks the customer to share a photo from “above the clouds”. Many people liked and shared the post, which means that besides the followers of the Transavia page, the friends of the customers who had shared or liked the picture will see the post as well. All those extra features such as the like and share option, is another asset for the airline industry as the customers help the airline to spread their messages with more people then only their followers, who can be seen as prospects. This is also called the multiplier effect (piportent, 2010).

p 2

Source: Facebook Transavia

All those effective social media tools such as sharing, liking, using a hashtag and User Generated Content lead to a a movement in the customer relationship pyramid. Customers get more loyal to a business through Facebook as they display often what customers like. By displaying interesting content and use material from the customer itself, a stronger connection will be created between the customer and the business (Heller Baird, C., & Parasnis, G., 2011).

Bibliography

Photo credits: Eezer Data Lab used under cc 2.0

Ashraf, S. (July, 2015). How The World’s Top 7 Airlines Use Social Media. Retrieved October 8, 2015 from: http://www.business2community.com/social-media/how-the-worlds-top-7-airlines-use-social-media-01272008#TAUlxgzjXDQd4dqC.97

Heller Baird, C., & Parasnis, G. (2011). From social media to social customer relationship management. Strategy & Leadership, 39(5), 30-37

Hubspot. (October 9, 2015). How New Technology is Changing the Way We Earn (And Retain) Customers Online. Retrieved October 9, 2015 from: http://blog.hubspot.com/marketing/technologies-customer-acquisition?utm_campaign=blog-rss-emails&utm_source=hs_email&utm_medium=email&utm_content=22724152

Luri, I. (2010). Social media and the multiplier effect. Retrieved October 10, 2015 from: https://www.portent.com/blog/internet-marketing/social-media-multiplier-effect.htm

Mangold, W. G., & Faulds, D. J. (2009). Social media: the new hybrid element of the promotion mix. Business horizons, 52(4), 357-365

Advertisements

Making the airline industry more profitable, by using customer data

Nearly every business aims for a high profit as their main goal, but this might be a hard working process, especially within the airline industry, where a high occupancy rate is necessary to remain profitable. According to Porter, for several decades, the airline industry is the least profitable due to highly capital intensive service industry, that only makes a profit when the occupancy rates are high, one can think of 85 to 90%. Therefore, it is important within the airline industry to sell additional and/or more expensive products in order to reach a higher profit – which can be identified as up-selling as well (Monetate, n.d.). Though, this is also a time-management thing because customers won’t always purchase more products. According to CTICO (2013), 48% are sometimes interested in upgrades or additional services in the airline industry, 0% is always interested. This means that the business should indicate the customer’s preferences in order to select the right extra products or services in order to sell more – and become more profitable. Ryan Air is a good example of up-selling. After the customer has selected a date and time to fly to a specific destination, Ryan Air offers the option to book a hotel, pre-order a car etc. In this way, Ryan Air makes sure to offer more products prior to the destination.

Oracle has published a report on how to maintain a valuable airline experience for the guests, as they see it as a top priority to maintain valuable customers. Moreover, to improve the customer’s satisfaction it is important to find the different touch points in a customer journey (Customer journey mapping article reference). When those are identified, they have to be implemented in an airline’s strategy which takes time as well. Moreover, when an airline has enough and valuable data from their guests, regarding each touch point, the business is able to personalize their offers to its guests and improve the guest‘s satisfaction accordingly (Oracle, 2012).

In the process described above, it is of crucial importance to collect the right information. According to Ed Peelen, one of the best methods is to follow the database management steps. Firstly, the data from the customer has to be of the right quality which means: current (is the data up to date?), complete (aren’t important demographics missing?), correct (aren’t there any mistakes?) and last but not least it should be unique – does the business have a competitive advantage if collected a specific piece of data, to create the most valuable product (Peelen, E., & Beltman, R., 2013)? As can be seen in the image, Oracle has created their own customer experience model, where one can see that they pay a lot of attention to knowing the customer in order to create a valuable offer aligned with the customer’s needs. Something very important within the airline industry is that enough and extra information from the guest is collected such as preferences regarding food and beverage, to complete the experience for the guest. Though, this might be a hard challenge as the business has to find out those extra bits of valuable information, and a time-consuming one. Nowadays, a guest has just such high expectations from a service or a product provided to them, and therefore it is important to make that expectation true.

Oracle, (2012)

(Oracle, 2012)

Moreover, the airlines face a difficult balance system as they have to take into consideration their customer’s demands, flight schedules and fare structures. To keep the customer happy, and profitable, it is important for the airline industry to keep all those three factors in such a line that the customers will remain loyal to your airline (Teradata, n.d.).

how to make it profitable

(Teradata, n.d.)

Bibliography

CTICOWW. (2013. Upselling and Cross-Selling in the Travel Industry. Retrieved from: http://cticoww.com/upselling-cross-selling-in-the-travel-industry-infographic-report/

Dent, J. (2013). Customer Journey Mapping: A walk in customers’ shoes, Ascend.

Monetate. (n.d.). Upsells and Cross-Sells in Travel: It’s a Timing Thing. Retrieved from: http://www.monetate.com/blog/upsells-and-cross-sells-in-travel-its-a-timing-thing/

Oracle. (2012). Oracle Data Airline Model. Retrieved from: http://www.oracle.com/technetwork/database/options/airlines-data-model/airlines-data-model-bus-overview-1451727.pdf

Peelen, E. & Beltman, R. (2013). Customer Relationship Management (Second Edition). Amsterdam: Pearson Education Benelux BV

Teradata. (n.d.). Airlines and travel. Retrieved from: http://www.teradata.com/industry-expertise/travel/

Photo credit: Retrieved from Ryanair.com (2015)

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.

Blog 2 CEM

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

The entity – creating a closer relationship with the customer

There are a trillion ways to book a flight to your favorite holiday destination. Every individual has its own preferred way of finding the right flight. One might choose the offline way, and visit a travel agent who will book a flight and a hotel in one simple click. The other one likes to accept the challenge and find the cheapest flight possible to the destination. Lastly, there are others who book directly via the website of the airline itself, for example klm.com or transavia.com.

Though, the business’s main motive is to create long-lasting relationships with their customers. When having created this, the business is certain that they will have loyal customers who are willing to return. This relationship has to develop during doing business between the company and the customer.

Here, a problem arises when thinking of airlines that are cooperating with other third party online travel agents such as Expedia or Travelbird. No direct contact between the airline and the customer is available as the travel agent is executing the booking from the customer. One can say that there is a secondary relationship between the customer who is booking a holiday via a third party online travel agent, and the airline. A secondary relationship can be defined as a short-term relationship, there is a limited degree of social interaction and there is no deep emotional feeling (Peelen, E., & Beltman, R., 2013). The term “secondary relationship” can be applied to this case.

To create a “primarily relationship”, where a long-lasting relationship and direct and continuously contact is crucial, it is important that the airline industry put more effort on working on independently and as an entity rather than working with third party online travel agents. When having a major focus on marketing purposes of the airlines, a stronger relationship can be created with the customers instead of trying to create a relationship through a third party. Moreover, trust has to be created between the customer and the business. This can be done through exchange of resources and emotional responses (Moorman C., 1993), which is only possible by having direct contact, without the third party.

Moreover, a customer-supplier relationship can be defined as a relationship that exists of the interactions that take place between at least 2 parties (Peelen, E., & Beltman R., 2013). It is important to take past and future interactions into account to have a positive influence on the relationships. To create this customer-supplier relationship, there should definitely not be a bridge between airlines and their customers – the third party.

Furthermore, to maximize the engagement between the customer and the business, there shouldn’t be a third party involved, in-between. This leads to insufficient communication between the business, in this case the airline, and the customer. The business should become more independent so that they can focus on all their customers on one line. Having implemented that, the business is more able to establish and develop a close and long-term relationship with their customers, instead of trying to reach them through the process of booking a holiday by a third online travel agent.

References

Moorman, C., Deshpande, R. and Zaltman, G. (1993) Factors affecting trust in market research relationships, Journal of Marketing, 57, January, 81-101.

Peelen, E., Beltman, R. (2013), Customer Relationship Management, 2nd edition, UK: Pearson

Photo credits: Joe the Goat Farmer used under cc 2.0