Back to Air Transport IT Review - Issue 2, September 2009
Placing the customer at the centre of the business
Industry Insight: The role of IT and the customer relationship
Technology has changed the balance of the relationship between airline and passenger in favour of the passenger. As a result, airlines need to re-think their approach to putting the customer at the centre of their world. And that means mastering IT in new ways.
In recent years, both passenger processing and services and improving customer service have been key elements highlighted for airline investment. However 'reducing costs' has consistently topped 'customer service' in the list of drivers. Now there is concern that cost measures may have hindered service improvements that take advantage of the new technology lifestyle of passengers.
It is now possible for passengers to handle every part of their "pre-flight" journey automatically using new technology. In fact, passengers may only see members of the airline's staff as they board the aircraft so these staff members have critical responsibility for delivering to the passenger's expectations of the airline. Yet typically they will know nothing of the passenger, and nothing of the potential importance that passenger has in past, current and future value.
The airline's relationship to the passenger and the passenger's technology is critical to the success of any customer service strategy. The truth is that brand-loyal travellers are rapidly disappearing as their ability to define their own travel plans through a variety of technology-driven media provides them with greater choice and power. The mindset has reversed - passengers increasingly expect the airline to show loyalty to them before they are prepared to show loyalty to the airline.
The need for data
Among the presenters were Henry H. Harteveldt, Vice President at the US analysts Forrester Research; Len Lubbe, CEO of South African company LoyaltyPlus; and SITA Senior Product Manager Anna Almqvist.
It was suggested that a lack of integrated customer data has exacerbated matters, leading to a fall in travellers identifying themselves as being loyal to any single travel company. This lack of data covers relevant, actionable information - information usable by executive, management and front-line employees.
Len Lubbe of LoyaltyPlus said: "Customer intelligence that airlines get from frequent flyer programmes is the key to building effective customer relationship management. But it must be acquired and used intelligently.
"Other data must be brought into the mix, so that an airline can properly understand the true lifetime value of the customer - not only according to previous and current value, but also predicted future value. But of course, not all commercially important customers are frequent flyer programme members, so the net for intelligence must be dynamic and responsive to customer reality.
"Once you have that data, it should be shared as appropriate with all of the passenger touchpoints, aligning delivery channels with a passenger's known needs and values."
The panel agreed that this means passenger-facing staff across the airline, from reservations staff to cabin staff, can see and act in making the passenger's journey more pleasurable and effective without the passenger knowing how. This places technology at the core of creating and sustaining passenger loyalty - as the enabler of how the industry's serves its customers.
This inflexion is seen in the positioning of customer relationship management as having moved from the 'trough of disillusionment' to the 'slope of enlightenment' within Gartner's 2008 Air Transportation Industry Hype Cycle.
Getting the culture right
"The key word in all of this has to be 'convincing'," according to SITA's Anna Almqvist. "It means explaining to staff the crucial importance to their own futures of customers whose value to the airline is already proven and is likely to remain high.
"Certainly it's about automation and the use of technology. Without the introduction of new customer-centric IT processes and the creation of a unified, intelligent database none of this is possible.
"But efficiency derives from the use that people make of the technology. Used correctly, customer-centric processes will allow you to offer only what your customer expects, use selling opportunities when your customer is open to receiving them and deploy resources towards the situations with the highest likelihood of return. Crucially, it will allow you to get closer to the right people - those most likely to contribute to present and future value."
SITA offers live data in place of PNR
SITA has responded to the need for customer-centric service with the launch of the first phase of Customer Journey, a live record of the passenger's experience with the airline - including seat preference, meal choice and the last time they made a complaint.
SITA is the first airline passenger management system provider to migrate from the legacy Passenger Name Record (PNR) - the historical standard for data storage - to a new generation Customer Journey record which provides reservations agents with real-time customer data through a single open integrated data base.
In a subsequent phase, Customer Journey will also provide data to support business intelligence gathering, analysis and reporting. Airlines will be able to extract information for use with revenue management and other airline systems and will be further developed to capture data such as hotels, car hire, trip insurance and other travel related services. It will display all revenues attributed to the customer, so helping determine the customer's overall value to the airline.
Customer Journey is an early deliverable in SITA's next generation passenger management programme on which it is collaborating with Oracle, the world's largest software company.
For more information, go to www.sita.aero/horizon.
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