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Application of e- CRM to the airline industry

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  • 1. Application of e-CRM to the Airline Industry
    Presented By
  • 2. Introduction
    In turbulent, highly competitive marketplace-important to respond quickly and effectively to changing patterns of customer demand
    Who are airlines' customers and what are their needs and aspirations?
    The opportunities are in managing customer relationships, controlling costs and applying customer profitability to the entire business
  • 3. Key Elements Of CRM
    Key Elements of CRM Architecture (Source: META Group)
  • 4. E-CRM
    e-CRM is interest intensified in managing customer relationship through the Internet
    In hyper-competitive and demand-driven markets -ability to address their customers' preferences and priorities.
    Strategically implementing this customer knowledge, from the highest management level to all the employees
  • 5. The benefit of application CRM
  • 6. Revenue Benefit
    The revenue increase comes from three areas:
    Re-attracting defected customers, which accounts for between 0.1 and 0.3% of revenues;
    Increasing the share of a customer's travel wallet, which accounts for 0.3 and 1.2% of revenues;
    Acquiring new customers, which accounts for approximately 0.05% of revenues.
  • 7. Cost Benefit
    Associated with these revenues are costs, but these only amount to between 0.3 and 0.6% of the existing cost base:
    The marginal additional flights needed as incentives estimated to be between 0.2 and 0.4% of costs;
    Additional CRM initiatives amounting to between 0.2 and 0.5% of costs.
    Savings in costs due to more efficient and targeted running of the existing CRM program, providing a reduction of 0.1 to 0.3% of costs;
  • 8. Web self-service solutions
    Three basic steps involved in establishing effective customer relationship management using the Web:
    Capture customer information,
    Build a customer database and
    Create personalized communication.
  • 9. Benefits for the customer
    The E-mail was responded to immediately, with personalized, valuable information.
    Web self-service allowed customer to take immediate action to resolve issue.
    Personalization enabled promotion tailored to customer profile - enhancing one-to-one marketing.
    The "callback" option was easy to use, enabling the customer to quickly request live support.
    The intelligent interaction routing engine immediately connected the customer to the right CSR.
    The customer information provided by Apropos and the CRM application enabled the CSR to provide efficient, personalized service.
  • 10. Airline e-CRM System Model
  • 11. e-CRM System Model cntd…
    Airline e-CRM model – A system that is made up of components, linkages amongst the components, and dynamics-that takes advantage of the properties of the Internet to make money
    It includes three components (subsystem): Web Basec Airline-Passenger Interaction subsystem; Airline Data Warehouse subsystem; Airline e-CRM operation subsystem.
    An asset-based solution that includes best-of-breed components to build an e-CRM infrastructure and enable any-channel, any-time communication with customers
  • 12. e-CRM System Model cntd…
    Airline e-CRM model also:
    Provides an understanding of customer behavior and enables airlines to measure results of marketing and merchandising changes.
    Supports more effective promotions through integration of data between marketing and merchandising users.
    Provides a single view of customers across the enterprise and across contact points.
    Gives airlines the ability to respond more dynamically and quickly to market demands.
  • 13. References
    An NCR Business White paper (1999). "Customer Relationship Management for Airlines".Available online
    Binggeli, U., Pommes, C., Granville, G., and Gupta, S. (2002). Flying High with airline CRM. McKinsey & Company Whitepaper.
    Bradshaw, D. and Brash. C. (2000). Surviving in the e-Business world How to personalise customer relationships for increased profitability.
    "E-commerce, Alliances spark Lufthansa Uptern", (2000) Aviation Week & Space Technology, May 15, p40.