CRM in Travel USA 2008 SpecialThe current measures of points or miles give some indication of the frequency of use but are woefully inadequate to indicate value, according to Ron Kuhlmann, Vice President, Unisys Transportation.

Published: 05 Feb 2008

CRM in Travel USA 2008 Special
The current measures of points or miles give some indication of the frequency of use but are woefully inadequate to indicate value, according to Ron Kuhlmann, Vice President, Unisys Transportation.

"Two travelers might have the same number of miles and yet one has made 30 trips at the lowest fare and the other has made five trips in first class. At present, no airline system differentiates these users according to value and yet they represent very different customer categories," Kuhlmann told EyeforTravel.com's Ritesh Gupta.

Kuhlmann, one of the speakers during EyeforTravel's CRM in Travel USA 2008 conference being held in New Orleans, spoke about servicing high value customers and much more in an interview. Excerpts:

If loyalty strategy should grow out of a company's brand strategy, what do you think is critical in doing so, especially in the context of delivering brand promise to the consumer?

I would submit that a brand promise in travel, or any service industry, is quite different than it is in a goods market. Looking at airlines, there are only a very few that have a clear brand expectation. Some like Singapore, have set the bar very high and a bad experience there is likely to be highly unusual. Conversely, an airline like Southwest has achieved a market image by reproducing an expected experience time after time. They have consistently rated high in customer satisfaction, not because they offer lots of goodies, but rather because they generally exceed low customer expectations.

Unlike a car or refrigerator, which can be seen and touched, service products are the end result of advertising, word of mouth, and expectations. Air travelers are buying transport but few actually rate a flight on that basis; choosing to comment on the staff or bumpiness even when the transport commitment is satisfactorily completed. Consequently, even as a frequent traveler myself, I would be hard pressed to differentiate between the brands of say, United and American because each experience differs depending on the particulars of that journey.

Companies are leveraging customer communities that allow for interaction between customers as well as between the customer and the brand. Loyalty marketers are leveraging the Internet's ability to build virtual communities to create niche networks of customers who interact with each other through a platform facilitated by the brand. What's your viewpoint on the same?

The more prominent and important interface is on social computing networks that are independent of the companies. Looking at comments on Skytrax, one can find comments like "though I am a premier member, I was treated like dirt" (or some such comment). If I were that company, I would rush to find that person and correct the situation since others, reading the comment, will think "if that's how they treat their best customers, how will I fare?" These independent forums are the points where companies should be looking. A company sponsore spot is often viewed as an infomercial.

Which is the best way to service high-value customers in terms of preferential pricing, preferential seat availability, upgrade, downgrade etc? What kind of feedback do airlines or suppliers get when it comes to satisfaction level of their customers through such service?

No IT system currently in use provides that kind of value assessment. Consequently the ability to specifically tailor offers based on past performance is impossible. As long as each PNR is a sealed unit, staff can only service the customer according to the limits of the fare and conditions applicable to that transaction.

How can one measure the impact of providing an "experience" compared to simply providing a service? Does an experiential service really drive loyalty?

Service providers often get into trouble by trying to provide an experience, mainly because the components and definitions differ from person to person based on pre-conceived expectations. One lesson that has been very slowly learned by the legacy airlines is that while air travel is still an experience, it is often not a good one and differs markedly from the days when air travel was a unique experience available to relatively few folks.

When I stay in upscale hotels, I find that I often wonder where the value is as I generally just sleep in the room. Paying a high price for a name (and then having to pay for internet access) often leaves me pondering where the "magic" was.

From service perspective, how do you know if you are delivering the brand promise? How can you measure it?

If customers do not complain, you are probably meeting expectations and the brand promise has been kept. However, again, the perception of the promise may vary considerably among customers. Repeat business is another marker though in the case of corporate business, those repeats may be more due to policy than to loyalty.

What do you recommend when it comes to training employees to provide a distinct service, in keeping with your brand promise?

Be nice. Reading comment from users, the most common complaints usually concern staff and staff attitudes. Especially in the aviation sector, employees have taken a beating in terms of salary and benefits but I, as a customer, am not responsible for that. Sulking in the galley is not going generate any positive energy on my part and will affect my choice next time. If faced with a low fare with a smile or a low fare with a frown, I'll buy the smile.