Airlines to Institute "Know Your Flyer" Programs

[R.A. Hettinga]

 From the database-marketing-as-deep-proctology dept...

'It's okay, Mr. Gilmore, we just wanna *know* you. ;-)'


"Several times a week, to enter a TV studio say, or to board a plane,  
I have to produce a tiny picture of my face."  -- Christopher Hitchens


Cheers,
RAH
Looking around for his "Suspected Terrorist" button.

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<http://online.wsj.com/article/SB123785242956819529.html?mod=djemseat#printMode 
 >

The Wall Street Journal
		
THE MIDDLE SEAT
MARCH 23, 2009, 10:34 P.M. ET
Your Airline Wants to Get to Know You
By SCOTT MCCARTNEY

An airline loses your bag or cancels your flight because of a  
mechanical problem. The next time you show up at the airport, an agent  
personally apologizes and offers a free pass to an airport lounge for  
your troubles.

Don't laugh. Someday it may happen at U.S. airlines.

Airlines are getting closer to rolling out new technology that tells  
airport agents your ticket-buying and travel history, flags key  
customers to flight attendants and instructs them to offer  
personalized apologies, or sends you sales targeted to your vacation  
patterns.

High-end hotels have long tracked customer information, right down to  
pillow preferences or history of complaints and bad experiences, and  
online retailers pitch products based on your buying history. But  
airlines have done very little in the field of "customer relationship  
management," known as CRM.

Airlines acknowledge they will never be the Ritz, but they are hoping  
to put such practices to use -- to the benefit of fliers. Several  
airlines, as well as suppliers of CRM systems, say airlines view  
better customer-related technology as crucial to retaining important  
customers in a declining economy and differentiating themselves from  
competitors.

One small initiative already in use: After boarding, Alaska Airlines  
flight attendants deliver favorite drinks to elite-level customers  
when they are sitting in coach, thanking them by name for their  
business. "The point is not the cocktail. The point is the recognition  
and thanks for your business," said Steve Jarvis, vice president of  
sales and customer experience for Alaska, a unit of Alaska Air Group  
Inc.

Airlines say they have been slow to adopt customer-friendly services  
because they have multiple old computer systems that don't share  
information well.
At airports today, airline agents can call up a traveler's itinerary  
and frequent-flier status. But information about past complaints,  
delays, baggage problems, canceled flights or missed connections isn't  
available. Neither is, in most cases, how much money you spend with  
the airline.

Airlines are using new systems to better calculate the value of each  
customer -- how much you spend per miles flown each year, for example.  
But they haven't yet found ways to customize service at ticket  
counters and gates based on that information.

"You can be the most-frequent flier and when you are with your family  
and sitting in the back of the airplane, there's no recognition," said  
Tom Klein, president of Sabre Travel Network and Sabre Airline  
Solutions, divisions of Sabre Holdings Corp. "It's a service  
consistency problem."

Poor relations between labor and management have also made some  
carriers hesitant to ask employees to change their interactions with  
customers. Airline officials and technology executives say putting  
fancy online tools in the hands of jaded employees can be a recipe for  
failure.

New technology -- such as self-service kiosks, electronic boarding  
passes on handheld devices and automatic flight-alert systems -- aims  
to help customers circumvent employees and cut labor costs.

Airlines have long tried to reward their best customers through perks  
tied to frequent-flier programs. Top-level fliers receive upgrades,  
priority boarding and sometimes access to special security lines.

But to many travelers, those benefits have become impersonal and  
widely available.

Cam Marston, a frequent flier who has elite status on Delta Air Lines  
Inc., AMR Corp.'s American Airlines and US Airways Group Inc., was  
amazed when he flew Alaska a few times and noticed the beverage  
delivery in coach to top customers. (Alaska prints elite-level fliers'  
drink preferences on manifests given to flight attendants.)

"It really made an impression," Mr. Marston said. "With the technology  
available today, it would seem easy to do to add personalized  
service. ... I think there is huge opportunity."

But even simple steps like that are challenging for airlines. Alaska  
wants to do more with CRM, Mr. Jarvis said, and is working to improve  
target marketing to customers and offer more personalized service. The  
first is easier than the second, he said.

"It's a high priority and we're getting there," said Mr. Jarvis. "We'd  
like front-line employees to know we lost your bag last time you flew,  
but it's just in different data sources right now." Alaska has at  
least six different data systems housing customer information.

Some major airlines say they have spent years trying to get different  
computer systems to work together. Most say they have CRM projects in  
the works, and a few hope to roll out innovations out this year.

Some international airlines already give their best customers white- 
glove treatment using CRM systems and simple good business. British  
Airways, Lufthansa and Air France all have special services for first- 
class and top-level travelers at key hubs, and employees who track  
personal information and preferences.

"I truly don't see airlines ever getting to the level of say, Ritz- 
Carlton, but that's not what our customers tell us they want," said  
Kerry Hester, a US Airways vice president responsible for customer  
service planning. "Customers say they want a convenient, hassle-free  
experience rather than high-touch service, but there are definitely  
things we can do."

Airlines tailor email sales alerts to customers based on past  
destinations or hometown airports, and some even try to track travel  
patterns, such as whether you take a ski trip every February, and then  
marketing ski trips to you.

But they have lagged behind other industries -- such as book, movie or  
music sellers -- in developing truly personalized marketing. Airlines  
are considering ways to collect more information from customers to  
better pitch to them.

"I might have said some of the same things five years ago on what we  
are trying to get done. We're still getting the hang of better email  
marketing," said Mark Bergsrud, senior vice president of marketing  
programs at Continental Airlines Inc., considered an industry leader  
in mining customer data.

Much of the airline CRM effort is focused first on improving responses  
to customers when things go wrong, from sending email alerts when bags  
aren't loaded on the right plane (so a customer doesn't wait at a  
baggage carousel for a bag that won't show up) to instantly rebooking  
customers when flights are canceled or connections missed.

Rebooking is a complicated area fraught with customer frustration.  
Often travelers have trouble getting information out of airlines, so  
road warriors blitz different contact points, calling the airline  
while waiting in an airport line and simultaneously emailing with a  
travel agent.

If airlines could electronically send rebooking options to customers,  
especially their most valuable customers, or allow self-service  
rebooking at kiosks, customer satisfaction might improve.

What's more, airlines hope to better dole out available seats to  
customers based on their predicaments, and not just their status.  
Currently elite-level fliers, full-fare passengers and sometimes  
travelers with international connections get priority for seats on  
other flights. But with more data, a customer who had a flight  
canceled three days earlier could also get priority.

Sabre's Mr. Klein thinks CRM may help airlines figure out which  
services will excite customers. Some services may simply add cost  
without much reward for the airline. But others may be so highly  
prized that customers would even pay extra for them.

"I think you'll see a lot of experimentation," he said.