Sunday, March 06, 2005

Implementing CRM in Travel

Over the last 3-5 years a great deal has been written about CRM and related technology. In fact to some extent the term CRM has simply become another buzz word that lacks a consistent definition. Are opt-in email campaigns that target specific pre-defined preferences an example of CRM? How about the concept of "my trip" folders for online travel reservations. Both of these are customer facing activities, but in reality, CRM is much more than database marketing or personalized Web capabilities. Successful CRM means delivering differentiated service to a company's best customers. The recent flap about AA removing pillows from their flights has been used by some pundits as a poor example of CRM practice. In reality it is not about general amenities such as pillows, but specific services given to recognize the value of good customers. This concept does raise some interesting social issues. Do suppliers ever want to show preferential treatment to one class of travelers vs another? I believe the answer is yes, but not to the detriment of the other consumer. In fact this has already been happening for some time as better customers get the upgrades, and first selection of meal selections (at least in FC) on most airlines. The overriding goal of CRM initiatives must be treating good customers consistently at every touch point. As airlines embrace new low cost, next generation distribution platforms, an opportunity arises in using new technology to better target a suppliers' best customers. Travelers need to be rewarded not only for their patronage, but the overall value (including how they booked their reservation) they bring the supplier. Rewarding travelers with tangible amenities for direct bookings is one important way to apply CRM techniques to drive lower distribution costs.

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