Airline Customer Experience Leadership, by Rainer Uphoff (Keynote at Worldticket's 2010 Copenhagen...

Sell-More-Seats®

Customer Experience Leadership: The ultimate strategic alignment tool

My name is Rainer Uphoff and I am avionline

Let’s go!

Customer Experience

Leadership

Customer Experience Leadership

What is so new about Customer Experience

Leadership?

“Customer is King” is not new at all!


1980s – Customer Centric Company 1990s – CRM, Loyalty Management 2000s – Customer Experience


RESULTS?


Surprise!

The customer is less loyal than ever.


2000: Customer Experience Management (CEM) was born

In the airline industry, this

coincided with something else

?


Let’s look at aviation history


1930s – 1970s Regulated Environment:

the pilot-CEO is King!


1970s – 2010s Deregulation and Competition:

The CFO-CEO is King!


And then, something happened:

Key words slide


Where is the limit?


What can we do when shaving the skull is no longer an

option ?


The time of the

customer-CEO has come

!


Let’s remember: 1980s – Customer Centric Company 1990s – CRM, Loyalty Management 2000s –

Let’s talk about STRATEGY

Differentiate!

LISTEN, LISTEN, LISTEN

Manage expectations (learn from Ryanair)

Offer VALUE, VALUE, VALUE

Deliver what you promised!

Differentiate!

Michael Porter:

either chose cost leadership or differentiation strategy.

Some leaders are doing both.

Differentiate!

Porter: either chose cost leadership or differentiation

strategy.

Some are leaders for doing both.

Differentiate!

I know, you are a regional carrier.

Is geographical differentiation enough?

Anybody here wanting to be the

SIA, Jetblue, Ryanair of the regionals?

Differentiate!

Strategic imperative: regional startup airline reaches competitive relevance in YEAR 3

Competition recognises opportunity


Do you know what your customers really want?

Do your surveys say what you

want to hear?

Even family businesses need to LISTEN!


10 million views! You can’t hide… (If you can’t see the video, search or click for “United breaks guitars” on Youtube).


Social Media are EFFICIENT

and FREE LISTENING

tools.

Are you using them?

Manage expectations

Go back to the drawing board!

Perceived service quality – Expectation (created)

= Value –> Profit

Manage expectations

Learn from Ryanair!

Expectations MUST be thoroughly managed.

Otherwise, you have NO CONTROL

over your value proposition.

Manage expectations

Overpromise: long term problem

⇒ Brand equity declines

Underpromise: short term problem

⇒ unrealised yield potential


Passengers…

-buy through the same booking system (except WorldTicket’s!)

-are extorted to pay the same fees

-are “dispatched” by the same handling agent

-fly on the same aircraft…


CFO-CEOs (+consultants) are the scientists of the XXI century: They discovered the SERVICE ATOM =the perfect COMMODITY


Service unbundling and cost cutting has COMODITISED air

transportation.

Only COST LEADERS are successful in the commodity

business.

But there is only ONE Ryanair.


Go back to the drawing board…

DESIGN services VALUED by customers.

Find IT systems to support the value creating processes.

Be INNOVATIVE.


Which meal do your prefer?

THIS

OR THIS? PRICE: 9 € VALUE: !?!

Watch out for AA’s practical jokes on napkins


Ancillary revenues must

generate VALUE, not be a TAX


You LOVE to check-in your baggage and appreciate the value when being invited to pay for this beloved service, don’t you?


Fortunately, some airlines have changed their mindset already from thinking COST to thinking VALUE!


Repeat with me:

Don’t (only) think cost.

THINK VALUE!


Go back to the drawing board…

Deliver beyond your promises.


Let’s do it!

(The Customer Experience Journey starts in the WEB!)


First, get the basics right!

Hey guys, we’re in 2010 !

Quirks – WHAT?

C’mon – you can’t afford to do that!


Second, understand your customer+his/her preferences!

That’s smart.

NG pax prefer

chat over phone


Third, get your organisation ready.

Make the customer your strategic goal.

Gain support from the top.

Obtain buy-in from all stakeholders.


Without an adequate strategic alignment model, you will lose efficiency.

Environment

Strategy

Competencies

Organisation

Process

People

Structure

Culture

are executed by…

is supported by…

determines aligned…


Fourth: know your corporate silos.

Is maintenance as urgency driven as the gate agent?

Is marketing making promises that operations can’t keep?

Do you even analyse this?


Fifth: get the metrics right.

Do you know what to measure?

Do you use industry best practice metrics, such as the NPS?

Do you measure perception gaps?


Sixth: align the organisation

Do you have clear customer related targets?

Do you link these targets to the corporate motivation system?

Do you hire the right people and know how to find them?


Seventh, know and apply the tools

Voice of Customer

Customer Experience Journey Mapping

Service Design

Audits

…

Customer Experience Mapping

Scenario 1

« We have seen promotions. We need a lowcost flight for a weekend in Prague »

Scenario 2

« We have a business meeting in Lisbon on 02/11. »


Get Customer Experience Leadership

Are you using Customer Experience Management as a STRATEGIC

alignment tool?

Is the president / CEO your customer champion?

(BTW, he can be coached into the role…)


Nice, but

SHOW ME THE MONEY!

Show me the money!

Customer Excellence to strengthen the organization vs. the FIVE COMPTETITIVE FORCES:

1.  Customer negotiation power 2.  Provider negotiation power 3.  Threat of New Market Entrants 4.  Threat of substitutive products 5.  Rivalry among competitors

Show me the money!

Customer Experience Leadership is not “nice to have”.

Show me the money!

1.   Customer negotiation power Give value: customers will WANT to buy from you

2.   Provider negotiation power Grow, be reliable: providers will WANT to work with you

3.   Threat of New Market Entrants Differentiate by value: give new entrants a HARD TIME

4.   Threat of substitutive products Innovate to solve customers’ real needs: they’ll stay with you

5.   Rivalry among competitors If your business is built around “the customer”, you have NOTHING TO FEAR

Show me the money!

Customer-ROI is KING!

Are you able to recognise toxic profits?

Are you computing CEM value creation?

What about customer equity, brand equity, stockholder value?

Think long-term!

Show me the money!

Without CEM, brand credibility deteriorates and customer equity declines.

This destroys long term value while short term cash flow still remains positive.

!"#$%

!&#$%

!'#$%

!(#$%

!)#$%

#$%

)#$%

(#$%

'#$%

)% (% '% &%*+,-./-%0-1.+%2/3+.045/%

*+,-./-%0-1.+%670,-8+.%9:74,;%

Example: 5% yearly decline in brand credibility translates into slow cash flow reduction, but customer NPV disaster.

Show me the money!

And remember:

Ancillary Revenues must come from value you generated.

Otherwise you are charging a TAX.

Who loves the taxman?

Visit ourpax.com (not “theirpax.com”)


Any questions? Thank you!

Email: [email protected]

Skype: ruphoff Blog: www.ourpax.com

Twitter: rainerup

Airline Customer Experience Leadership, by Rainer Uphoff (Keynote at Worldticket's 2010 Copenhagen...

Business

Transcript of Airline Customer Experience Leadership, by Rainer Uphoff (Keynote at Worldticket's 2010 Copenhagen...