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Capturing value from customer-centric sales and services

The experience of traveling has changed. It's become a process that many passengers regard with a decidedly negative attitude. Carriers have aggressively increased load factors, added baggage surcharges and reduced staff in order to improve their overall profitability. While this has made the industry as a whole more efficient, crowding, overbooking and pervasive delays erode passengers' perception of service quality, making the airline industry 42nd out of 44 in customer satisfaction. 1

Customers demand better treatment. If your airline answers the call, you'll find yourselves with more loyal customers.

The executive Report from the IBM Center for Applied Insights, Capturing value from customer-centric sales and services (PDF,1.64MB), reveals the economic value of applying data and analytics technologies to transform your transportation systems and provide a better passenger experience. Based on extensive industry research, if you make investments to better understand your customer; improve services and deliver them more effectively; and leverage real-time data that can empower the traveler, your airline can anticipate sizable returns.

Customer-centric sales and services: A competency outcome map
The journey to customer-centric transportation sales and services, depicted below, is a set of building blocks that enables delivery of a better travel experience. With each step, the airline becomes more customer-focused.

Chart: Value vs Maturity over time. Source: IBM Center for Applied Insights.

Using an illustrative organization, we demonstrate a model that quantifies the economic impact of a customer-centric strategy for your airline. This work reveals how developing the foundational competencies to create a 360 degree view of your passenger positions your airline for exponential returns once you begin to offer services that enhance the customer's trip. Using our model, we can demonstrate the benefit to your airline based on your own data.

The direction for the future is clear. Continued focus on operational savings and load maximization is not the best way to win customers. Likewise, adding alternative revenue fees such as baggage surcharges will only serve to alienate your customer base. Airlines need to shift the focus to your passengers's experience and make the trip better―not just more profitable―in order to create loyal customers who want to fly with you. Providing the right product and services to the right customers at the right moment is the new destination.

1. International Air Transport Association Statistics.
2. Buchanan, Richard, IBM Business Rules Lead Architect. Presentation notes from IBM ILOG® La Gaude "Smarter Decisions for a Smarter Planet" event. November 26, 2009.
3. "Air Canada: Extending customer self-service beyond the airport." IBM smarter planet case study.