Can the airline industry further improve their CEM in the social media arena?

In the last years some airline companies have done a magnificent work using the social media arena to engage with their customers. A well-known example is Dutch airline company KLM. They have truly tried to grasp the growing of the technology and implement it in their strategy. KLM has used social media to further develop their business based on the customer feedback. An example is the lost and found team where a dog is used to return the lost items to the passengers faster and more efficiently. Still you have to wonder, will the airline industry ever reach a roadblock in the social media arena?

We have seen a lot of unique and creative use of the social media arena by airline companies, but perhaps the use of social media is not enough as they had expected. Just as it has been said by Thomas (2010), “social media is “CRM for millennia” but not just a simple marketing tool and its form may be different in the future, but it’s not going away.” Most likely airlines use the three strategic criteria to assess their current channel combinations (Wilson et al., 2008). Assessing if they are reaching all the potential customers with their strategy. Are the customers having the experience that the airline wants to provide with them and the costs to serve the relationship during contact?

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(Wilson et al., 2008)

The gap right now that can be used in the social media arena to further engage with customers is the use of videos and texting. Video and texting is becoming the new language in the travel industry. There is the possibility of using the 360 degrees video to further improve the engagement with customers. However, airline companies of course have to find a unique creative way to make that engagement. Regarding the mobile messaging companies might want to use the innovation wheel of the multichannel strategy (Wilson et al., 2008) and focus on the last section of the innovation wheel, to stimulate the customers to use the channel of mobile messaging even further. If of course, the airline company sees it as a beneficial investment and as an opportunity to improve the customer engagement.

In conclusion there is a chance that the airline companies might hit a roadblock regarding the social media arena. There is only so much you can do with social media. It’s the trends that keep developing during the years in combination with social media that keeps the success of social media going. Because, if you just use social media in the basic way that it is intended to, you won’t really be able to engage with your customer in a unique way.

References

Haar, G. (2015). What Has KLM Learned From 5 Years of Social Media Service? – KLM Blog. KLM Blog. Retrieved 10 October 2016, from https://blog.klm.com/what-has-klm-learned-from-5-years-of-social-media-service/

Kirtiş, A. & Karahan, F. (2011). To Be or Not to Be in Social Media Arena as the Most Cost-Efficient Marketing Strategy after the Global Recession. Procedia – Social And Behavioral Sciences, 24, 260-268. http://dx.doi.org/10.1016/j.sbspro.2011.09.083

Peelen, E. (2005). Customer relationship management. Harlow, England: FT Prentice Hall.

Thomas LM. 2010. Sending marketing messages within social networking, Journal Of Internet Law

How can the airline industry use data mining in order to develop a better one-on-one relationship with their customers?

“In the current time most of the airline industries are using frequency-marketing programs as a strategy for retaining customer loyalty in the form of points or miles. Frequent Flyer Program presents an invaluable opportunity to gather customer information. It helps to understand the behavioral patterns, unveil new opportunities, customer acquisition and retention opportunities. This helps Airlines to identify the most valuable and the appropriate strategies to use in developing one-to-one relationships with these customers” (UkEssays, 2015).

Evolutionary computation (EC) is one of the data-mining techniques. With EC one can divide the population into groups and it can then be determined to which group each individual member belongs: the group of continuing buyers, or the dropouts? One can also ask questions such as: Who is about to change from a light to a heavy user? Who is likely to multiply (bring along new customers through word-of-mouth)?

Frequent flyer programs can be used as the base for using data mining. Airline industries can analyze the travelling behavior of their customers. Furthermore, they can analyze in what period they make bookings and also the reasons for their booking. Are they booking business class or first class? When are they booking for business or first class is for short flight or long flights? From what region are they coming from? All these types of information can be analyzed using the data mining techniques.

After doing the analysis airline companies can use this information to create a more engaging one-on-one relationship with customers. An example could be that an airline company sees that a customer is travelling a lot for business purposes. As such, perhaps they can send the customer an email stating what flights might be of interest to them or other services.

This information could be really helpful for an airline as they can try to make a strategy in order to gain the customers of other airlines based on assumptions from their analysis. The only limitation is that they are using data mining on the frequent flyer programs. There are for sure many other customers that don’t have a frequent flyer program with their own flying patterns. Therefore, they are limited in the information they have acquired and in a way excluding a large part of their customers needs. However, what they manage to find from data mining can be used as a basis with additional research to meet the needs of customers that don’t have frequent flyer programs.

References

(2015). Retrieved 3 October 2016, from           https://www.ukessays.com/essays/tourism/applications-of-data-mining-techniques-in-airline-industry-tourism-essay.php

Peelen, E. (2005). Customer relationship management. Harlow, England: FT Prentice Hall.

Pritscher, L. & Feyen, H. Data Mining And Strategic Marketing In The Airline Industry. Retrieved 3 October 2016, from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.124.7062&rep=rep1&type=pdf

How can empathy be used in order to create a more emotional engagement with customers in the airline industry?

As the years slowly pass the tourism industry always keeps changing and transforming itself in order to meet the needs and wants of the customers. For the upcoming years memorable experiences is going to be the trend and keep rising in the tourism industry. This is what the tourists want and this is what they are giving their money for (Fuggle, 2015). That being said it is up to tourism companies to create that memorable experience in order to acquire and retain its customers. One way to increase the possibility of this happening is by using empathy. Now the question remains, how can the airline industry use empathy in order to have a more emotional engagement with its customers?

Well before we can start answering that question that was stated in the last paragraph. We first have to ask the question, what is empathy? Empathy according to Merriam-Webster, “is the feeling that you understand and share another person’s experience and emotion or the ability to share someone else’s feelings” (“Definition of EMPATHY”, 2016). If you look at it empathy actually goes pretty well together with the customer journey by Boswijk et al.’s (2011). “To walk in another’s shoes is to understand and live what they are doing, thinking, and feeling; these details are all part of the journey mapping process. When we know this, we can deliver a great customer experience for them, for the individual” (Franz, 2014).

We now understand overall what the definition of empathy is and that it can be related together with the customer journey. Now for the airline industry it means that they would need to train their employees to able to use empathy in order to create great customer experience. Additionally, they would need to know when it’s appropriate to use empathy. This can be done by using the Readjustment Rating Scale by Holmes and Rahe (1967).

Right now an example will be given of a flight attendant working for United Airlines. This took place a few years back according to an article on Skift (“Why Smiling Flight Attendants Need to Be Part of Airlines’ Fee Strategies”, 2015), when a flight attendant working for United Airlines announced prior to a nine-hour flight to the customers that the food supply that can be ordered in-flight is low. Therefore, the flight attendant suggested that the passengers should buy food in the terminal prior to boarding. With this the passengers welcomed the empathetic connection the flight attendant established with them and said the airline gained more of their trust.

This is an example that shows us that airline still have windows of opportunities in creating an emotional engagement with the customers. It doesn’t have to be something over the top. Yet, just like the example of the flight attendant the smallest thing on an emotional level has the possibility of gaining the trust of the customers and giving them an experience.

References

Boswijk, A., Peelen, E., & Olthof, S. (2012). Economy of experiences. [Bilthoven]: European Centre for the Experience and Transformation Economy.

Definition of EMPATHY. (2016). Merriam-webster.com. Retrieved 25 September 2016, from http://www.merriam-webster.com/dictionary/empathy

Franz, A. (2014). CEM Toolbox: Empathy, Journey Mapping, and the Platinum RuleCx-journey.com. Retrieved 25 September 2016, from http://www.cx-journey.com/2014/05/cem-toolbox-empathy-journey-mapping-and.html

Fuggle, L. (2015). 6 travel trends for 2016 that will drive the global tourism industry. Trekksoft.com. Retrieved 20 October 2016, from https://www.trekksoft.com/en/blog/travel-industry-trends-2016

Why Smiling Flight Attendants Need to Be Part of Airlines’ Fee Strategies. (2015). Skift. Retrieved 25 September 2016, from https://skift.com/2015/02/05/why-smiling-flight-attendants-need-to-be-part-of-airlines-fee-strategies/

Using Data for the Customer Intimacy in the airline industry

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).

Examples are:

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.

References

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.