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TERM PAPER

Topic – CRM STRATEGY

SUBMITTED TO: SUBMITTED BY

Mr.Rajan Ghirdhar

Dheeraj Valecha

Sec. 1805

Roll no. A27Reg. no. 10803031



Customer RelationshipManagement In

AIRWAYS



Acknowledgement

We are indebted to our Prof. Jagruti Trivedi to give us this project and make us

work on it. She pointed out to us the important information. Due to this we have not

only learned but also got the exact meaning of it. We have performed intellectual

debts to numerous websites and surveys have referred.



Introduction

Customer Relationship Management (CRM) consists of the processes a company usesto track and organize its contacts withits current and prospective customers.The work of CRM involves focusing on service-automated processes, information gathering and processing, and integration and automating various customer-serving processes in acompany. CRM software is used to support these processes; information about customer and customer interactions can be entered, stored and accessed by employees in differentcompany departments. Typical CRM goals are to improve service provided tocustomers, and to use customer contact information for targeted marketing.While the term CRM generally refers to software based approach to handlingcustomer relationships, most CRM software vendor’s stress that asuccessful.



CRM software in India.

Airline

CRM is the process of managing detailed information about individual customers andcarefully managing all customer “touch points” to customer loyalty.



What is e-CRM?

Today, more and more airlines are using the Internet to implement e-businessapplications and CRM strategy. These applications can be very resource

intensive. E-CRM is interest intensified in managing customer relationship throughthe Internet, and many airlines approached this as a separate project totheir e-business strategy. What differentiates airlines in today's hyper-competitive anddemand-driven markets is their ability to address their customers' preferences and priorities.This means more than simply knowing and understanding their customers better than their competitors do. It means strategically implementing this customer knowledge in every area of the airline,from the highest management level to allthe employees who come into direct contact with customers.Establishing and strengthening long-term relationships with airline's customers isthe key to success. It's the focus of a well-structured and coordinated processof customer relationship management. E-CRM involves far more than automating

processes in sales, marketing, and service and then increasing the efficiency of these processes. It involves conducting interactions with customers on a moreinformed basis and individually tailoring them to customers' needs.

Other CRM Activities

Rapid Rewards program for all passengers that make all their reservations online.

Incentives include lower rates, express boarding passes, and in-flight bonuses likefree snacks & drinks.

Business Rapid Rewards for Business travelers.

Special services to senior citizens.

There are three primary reasons why CRM has taken hold as rapidly as it has:1. Competition is fierce;

2. The economics of customer retention are unequivocal;

3. Technology allows airlines to do this more effectively and profitably today.There areonly three ways to increase the profitability of a customer base; acquire more customers,optimize the value of existing customers, or retain the right customers longer. All of these benefits must be achieved with lower costs. As the economic climate continues to become more competitive, the fight over customers intensifies. Of the three choices

above, acquiring new customers is the most expensive. Research shows that acquiring anew customer costs 5 to 10 times more than retaining an existing one. Studies also showthat loyal customers will buy more over their lifetime and are willing to pay a premiumfor doing business with someone they like and trust. Therefore, while organizations willclearly continue looking for new customers, once acquired, they now know that it isworth a significant investment to keep them. CRM is a way to do that.



This revenue increase comes from three areas:1.Re-attracting defected customers, which accounts for between 0.1 and 0.3% of revenues;2.Increasing the share of a customer's travel wallet, which accounts for 0.3 and 1.2% of revenues;

3.Acquiring new customers, which accounts for approximately 0.05% of revenues. Naturally, associated with these revenues are costs, but these only amount to between 0.3 and 0.6% of the existing cost base:

1.The marginal additional flights needed as incentives estimated to be between 0.2 and0.4% of costs;2.Additional CRM initiatives amounting to between 0.2 and 0.5% of costs.Savings incosts due to more efficient and targeted running of the existing CRM program, providinga reduction of 0.1 to 0.3% of costs;

As stated above, the bottom line impact of CRM is significant, but varies according to the

airline implementing the initiatives. The range estimates are:1.For a large airline: $100-$250 million per year;2.For a midsize airline: $25-$60 million per year;3.For a smaller airline: $15-$50 million per year.

There are many benefits to be gained for airlines and airline passengers, firstly, passengers could book and check in through internet 24 hours, 7 days a week, at anytime, any where. Secondly, airlines could reduce sales cost. American Southwest AirlinesCEO, Gary Kelly said the Web site is playing a major role in mitigating the rise in unitcosts affected by high fuel prices. It's 10 times cheaper to deliver to customers throughthe online service than through a travel agent, Kelly said, and costs 5 times less thanusing Southwest's own reservation staff. The booking cost per passenger online is "wellunder $1," said Kelly, and is scaling down even further. He said Internet use by passengers was helping the carrier keep fares at low discount levels. (Aviation Week &Space Technology/March 6, 2000, p38). Massive investment in both business-tobusiness(B2B) and business-to-customer(B2C) information systems is expected to translate intoimportant cost savings in procurement, sales, billing and other support activities. Theairline's fully automatic ordering system, for example, should reduce order-processingcosts by 90%, according to Chairman/CEO Juergen Weber of Lufthansa Aviation Group.(Aviation Week & Space Technology/May 15, 2000, p40). Specific benefits toimplementing a CRMstrategy with Interaction Management include:Planning and implementing business processes across airlines and CRM applicationsensures customers are handled in the most efficient and effective fashion from the beginning to the end of the interaction based on their real-time value to airlines.Implementing CRM applications may simultaneously lower the cost of design,implementation, installation, training, ownership and administration. It also reduces therisk of re-engineering systems at a later date. Consistent and dynamic processes are built up-front for the customer. This forces the airline to consider each element in the process design including the network, switch, multi-media management, and the CRM – ensuring streamlined processes are in place before the customer makes contact. Influence



and enhance intelligent call routing by leveraging the data gathered from the switch(ANI, DNIS, Caller ID), caller, and CRM applications. Create and leverage detailedstatistics/metrics and cradle-to-grave reports. Real-time access to historical customer information allows support staff to know who your customer is, why the customer iscalling, what's been done, what needs to be done, and respond in the most efficient,

expedient manner possible. Benefits for the customer The E-mail was responded toimmediately, with personalized, valuable information. Web self-service allowedcustomer to take immediate action to resolve issue. Personalization enabled promotiontailored to customer profile – enhancing one-to-one marketing.The "callback" option waseasy to use, enabling the customer to quickly requestlive support. The intelligent interaction routing engineimmediately connected thecustomer to the right CSR.



Jet Airways wins customer loyalty award

A customer loyalty award recognises the comfort of Jet Airways' flights to India anddomestic services.

By Southall Travel -Friday, January 29, 2010 09:00 PM

Flights to India with Jet Airways allow passengers to enjoy the services of anaward-winning aviation operator.

The airline currently has 89 aircraft operating from 61 destinations, both in the domesticmarket and offering flights to India from overseas.

Nikos Kardassis, chief executive officer of Jet Airways, says: "We have alwaysendeavoured to delight our guests with our world-class product and customer service, both in the air and on the ground."

Those efforts have now been rewarded with the news that Jet Airways has secured itsthird consecutive victory in the Loyalty Awards.

In 2008, 2009 and now 2010, the airline took the accolade of Customer and BrandLoyalty, defeating the competition from other leading airlines each time.

Other titles taken by the operator over the years include the Freddie award for Program of the Year and the TTG Travel Asia accolade for Best Domestic Airline, which it won in2005.

Jet Airways adds Accor and Langham to loyalty scheme

India’s largest frequent-flyer programme, Jet Airways’ Jet Privilege, has extended its points partnerships to Accor Hotels and Langham Hotels International.

JetPrivilege members can now earn points for two or more nights at different brands belonging to Accor Hotels, the world’s largest hotel chain, with brands grouped into threetiers.

Members staying in the first rung (Sofitel, Pullman or MGallery hotels) will earn 500JPMiles per qualifying stay, while those at Grand Mercure, Novotel and Mercure Hotels

earn 250 points. The deal also extends to the Ibis brand in Asia, where stays will net 150JPMiles.

Until September 30, members staying for at least two nights in one of the three categoriescan earn quadruple, triple and double JPMiles respectively.

http://www.southalltravel.co.uk/India/






The Langham tie-up sees members earning 500 JPMiles for a stay of one to three nightsand 750 JPMiles for a stay of three nights or more. In another launch promotion, stays atLangham properties before September 30, will earn double points.

JetPrivilege members in India, Singapore, Hongkong, Thailand and Malaysia subscribing

to theWall Street Journal

can also earn points for one-year (1,200 points) or two-year subscriptions (2,000 points) as well as enjoying a subscription discount. Of up to 51 percent.

Jet Airways wins Customer & Brand loyalty Award

Jet Airways, India’s premier international airline, has won the coveted Customer andBrand Loyalty award in the Commercial Airlines Sector (Domestic), at the secondLoyalty Awards.

The award was received by Mr. Rahul Kucheria, General Manager – Relationship

Marketing, Jet Airways in the presence of industry stalwarts from the telecom, banking,insurance and IT sectors, among others, at the Taj Lands End, Mumbai on January 29,2009.

This was the airline’s second consecutive victory at the Loyalty awards, having previously won the award in the same category in 2008.

The Loyalty Awards are the outcome of a combination of Consumer Research undertakenin six Indian cities, as well as nominations received from organisations. These Awardsare governed by a carefully selected jury who, on the basis of the above two findings,decide the final Award Winners in each award category.

Commenting on the honour, Mr. Wolfgang Prock-Schauer, CEO, Jet Airways said, “AtJet Airways, we have always strived to build long-term relationships with our customers, beyond mere commercial transactions. This relentless focus on the customer has helpedgenerate tremendous goodwill and loyalty for the Jet Airways brand, in both Indian andforeign skies.”

About Jet Airways:

Jet Airways currently operates a fleet of 87 aircraft, which includes 10 Boeing 777-300ER aircraft, 12 Airbus A330-200 aircraft, 51 classic and next generation Boeing 737-400/700/800/900 aircraft and 14 modern ATR 72-500 turboprop aircraft. With an average

fleet age of 4.48 years, the airline has one of the youngest aircraft fleet in the world.

Flights to 63 destinations span the length and breadth of India and beyond, including New York (both JFK and Newark), Toronto, Brussels, London (Heathrow), Hong Kong,Singapore, Kuala Lumpur, Colombo, Bangkok, Kathmandu, Dhaka, Kuwait, Bahrain,Muscat, Doha, Abu Dhabi and Dubai. The airline will continue to connect existinginternational destinations with additional gateway points across its network in the future.



Jet Airways currently operates over 370 flights daily.

About JetLite:

JetLite is a wholly owned subsidiary of Jet Airways India Ltd. and was acquired by JetAirways in April 2007. Positioned as an all-economy airline, JetLite promises to offer

value for money fares. JetLite currently operates a fleet of 24 aircraft, which includes 17Boeing 737 series and 7 Canadian Regional Jets 200 Series. The airline flies to 26domestic destinations and 2 international destinations (Kathmandu and Colombo),currently operating a 110 flights a day, on average.

Jet Airways, with the acquisition of JetLite, today has a combined fleet strength of 111aircraft and operates over 480 flights daily.

The customer information provided byb Apropos and the CRM application enabled theCSR to provide efficient, personalized service. (Prete, 2001) Customers enjoy personaltreatment, together with appropriate advice on getting the best out of their purchases.The airline may also put customers in touch with others with whom they havesimilarities, for example by inviting them to meetings. For the airlines implementingCRM, it becomes possible to single out customers who are profitable, gaining anunderstanding of their preferences to improve retention and increase the volumes sold.These valuable customers can become advocates for the airline and its products. Finally,CRM helps an airline to build loyalty. Because it is a marketing truism that it costs fivetimes more to generate new customers than it does to retain existing ones, that is a

compelling argument. With e-CRM, airlines can increase sales and customer loyalty. Thisstrategy can improve sales effectiveness, bring higher value to all of airline's key businessrelationships, help airline to understand what each client relationship is truly worth,develop and reinforce a consistent experience for customers, improve managementeffectiveness, improve tactical and strategic planning, respond faster to competitivechallenges, use critical resources more efficiently, and reduce administrative burdens andoverall cost. Four steps to e-CRM success E-CRM is a business strategy that shouldguide airlines to increased profitability by creating customer loyalty. In order toimplement a true e-CRM strategy, airlines must have a vision and look at CRM as oneholistic project - whether implemented all at once, or through a phased approach.First, an airline must commit to focus on the customer and create a complete vision that

fosters a true customercentric organization. Once a clear vision is in place, developing astrategy and establishing goals are the next steps toward effectively deploying e-CRM.The entire plan must align the airline's strategy, goals, and technology in order to achievethe objectives of the e-CRM project. Airlines that make strategic e-CRM investments andalign processes, strategies, and technology around customers are in a better position todeliver a seamless, high-quality customer experience across all channels. (Prete,2001)



1. Airlines have a clear overall strategy to vachieve enterprise-wide acceptance of acustomer-focused culture. Without clear direction, resources are likely to be misdirectedand return on investment sacrificed. Underpinning this must be senior managementsponsorship of the complete culture, process and business change needed to successfullyre-focus a business on its customers rather than its products.

2.Airlines have maximized value from their investment in technology to achieve thesought after 'single view' of each customer. Being customercentric is not just abouttechnology,however any airline considering using on-line channels to reach its customers

knows it needs a clear vision of what it wants the technology to do. It isessential to have a coherent strategy for unifying multiple customer contactchannels but ultimately, success lies in ensuring that the online customer experience is relevant, personalized,and supported with excellent customer service, support and fulfillment. Donebadly, e-business provides an open door for mass customer defection.3.Airlines have united people andtechnology for outstanding performance. It is essential to havestaff able to proactively connect with the data and create and sustain an



appropriate relationship with the customer. Achieving this empathyrequires defining new customerfocused, technology-enabled behaviorsand delivering these through teamwork and aligning reward recognition withcustomer delivery. Without proper staff training and motivation, companieswill fall at the last hurdle.4.Airlines use an accepted method of

measuring success to justify initial and ongoing investment in customer-focusedinitiatives. They need to develop appraisal systems for enterprisecustomer management, which identify all likely costs (including people,technology and process change) and benefits before any investment is made.The creation of robust measurement methods will be key to achieving boardlevelsupport.

The joy of flying

Jet Airways is India’s leading private airlines.

It boasts of a market share of about 29%.

Jet operates with a relatively young fleet of Boeing 737 jets and ATR72turboprops.

Started international operations in March 2004 between Chennai – Colombo.

It carries about 7 million passengers a year.

Special Offers

Offering free tickets

Concessional fares for students

Corporate deal offers

Jetlite surprises

What are the problem areas

CRM investments are largely driven by the competition rather than the needs of the airline’s most valuable customers.

Few airlines truly exploit CRM analytics to segment their customers based onvalue rather than miles flown.



Destruction of Competitive advantage…

In a bid to imitate first-movers and provide customers with similar services,airlines have effectively eliminated any competitive differentiation provided by

CRM initiatives. Execution of an airline’s CRM strategy is often inefficient as well, with no clear

vision or direction; competing departments often set separate goals.

• Moving Forward

• Develop a vision

• Focus on customer value

• Empower the employee

• Set targets and success metrics

• Address customer needs throughout the lifecycle

Threats within the company

Employees may not have the tools to provide consistent levels of service acrossall customer touch points.

Employees may not have the service mentality necessary for a CRM program to

be truly beneficial to both the customer and the airline.

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