Air Transport World

CRM is back: building customer databases is the key, but budget cuts and complicated systems have delayed this relatively easy task. (IT - Customer Service).(customer relationship management)

Many people promote customer relationship management as a strategic necessity if airlines want to obtain and retain loyal travelers. But matching the hype of one-to-one marketing with the reality is taking longer than expected (ATW, 7/99, p. 35). Forrester Research travel analyst Henry Harteveldt declares, "If anyone says he's doing CRM, he's lying through his teeth. There won't be true CRM for 18-24 months. And being first does not mean being successful."

Budget reductions are one reason for the delay. Trip Davis, head of TRX, suggests that before the economic downturn "CRM was a top three priority," but it dropped during the crisis. "Now it's back to the top three." Northwest Airlines VP-Distribution/E-commerce Al Lenza tells ATW: "We did scale back some but we're still making progress." American Airlines laid off its CRM staff after Sept. l1 but started rehiring earlier this year. However, some carriers, such as Delta Air Lines, kept pushing, hard.

The CRM slowdown mimics the slowdown in business travel. The question is whether the renewed CRM efforts will produce a return by loyal passengers, who have chosen price over loyalty. For example, corporate participants in a recent Business Travel Coalition/Unisys survey said they reduced air travel spending 16.5% last year and 75% of respondents vowed to make some reductions permanent.

But Harteveldt argues that CRM is more than just catering to the best customers. "The challenge is managing customer expectations. What should occur every day is that the best customers get the best experiences but that the rest should not have lousy experiences."

Building customer databases is key to CRM and should be the easiest part for airlines, given their vast loyalty programs. …

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