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Airlines

How Your “Customer Lifetime Value” Affects How the Airline Treats You

How Your “Customer Lifetime Value” Affects How the Airline Treats You
Jackie Reddy

While individual travelers may think that they’re more than numbers to their airlines, this may not always be the case. Carriers often give passengers a “customer lifetime value” or CLV score, a metric which is then used to gauge the future profitability of a customer’s relationship with a company.

Individual passengers may like to think that they are more than numbers to the airlines they patronize, but it turns out that this may not be the case, The Economist reports.

As with many other businesses, carriers give individuals a “customer lifetime value” or CLV score. This metric is used to essentially predict how profitable a customer could be to an operator throughout the length of an individual’s relationship with a particular company.

Airlines and carriers then utilize these scores to help inform their future interactions with their customers.

“When it comes to flying, a CLV score takes into account information such as how frequently a customer makes complaints and how often they are affected by flight delays and lost luggage. Companies do not perceive much value in retaining the business of customers who complain all the time, so regular whiners get bad scores,” it explains.

“Conversely, frequent flyers in business class who rarely moan get some of the best. Sometimes these scores are transmitted to flight attendants, many of whom are now issued with handheld digital devices on which they can read about passengers. Cabin crew can use this information to wish flyers a happy birthday or decide whether they are worth compensating for inconveniences such as a spilled coffee or broken screens,” the outlet adds.

There is, however, a flip-side to these CLV scores that goes well beyond projected profits and potential loss. To some passengers – as well as some carriers – there are concerns over the monitoring, collection and sharing of personal data.

Offering his comments on the use of CLV scores for good or bad, John Slater, senior vice president of inflight services at United Airlines, told The Wall Street Journal, “There’s a point where you don’t want to make people feel like, ‘Gee they know everything about me and they’re tracking everything I do’”.

[Image Source: Wikimedia Commons]

View Comments (5)

5 Comments

  1. dhensler

    November 17, 2018 at 2:15 am

    We are all being watched.

  2. Great_circle

    November 17, 2018 at 4:00 am

    Is one’s CLV score with an airline of any influence with other airlines within the same alliance?

  3. sdsearch

    November 17, 2018 at 11:42 am

    But what if the complaining customer buys expensive tickets, while the never-complaining customers buys only the cheapest tickets (or flies using miles when tickets would be expensive)? Does the latter still get the better score?

  4. htb

    November 17, 2018 at 8:58 pm

    I think it’s a very slippery slope from punishing people who complain to not getting real feedback from concerned customers anymore.
    I also don’t think it’s justified to base compensation for failed service upon how the customer is being rated. If your advertised entertainment system fails just pay a predefined compensation.

  5. Cathay Dragon 666

    November 19, 2018 at 7:16 am

    Wow, so genuine concerns and feedbacks are discouraged, they only want sheeps with the attitude of shut up and sit down, and be grateful when we throw you a bone?

    Heh.

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