There is an interesting slideshow available about the customer experience at KLM. It's currently hosted on Slideshare.net:
http://www.slideshare.net/jvlasveld/...e-20100624-klm
Choice quotes:
A joint belief that our declining customer satisfaction figures will hamper future profitable growth
Okay, they noticed.
A belief that we need to protect our most valuable customer segments (10% of customers, >60% of profits), thereby protecting our core profits and shifting our customer mix to more profitable passengers
Profit maximization.
Totally understandable reason for a company but I can't help to wonder if KLM has understood that profit maximization and customer satisfaction are not necessarily diagonal but that this is often the case. If you concentrate on the Biz Class flyer and devaluate your Y product you get a large number of unhappy Y customers. If you now lower prices, you make a lot of these Y customers happy again because they got it cheap (compare RyanAir) and get some of them rather irritated because they didn't want to fly RyanAir but also didn't think your C tickets are a good value proposition.
A nice example of past performance at KLM is the current FB program: On C and F you get decent earnings and if you're travelling on Y, please go f### yourself, you are not part of the 10% of travellers who generate the 60+% of our earnings.
KLM Brand Positioning: Refreshingly Genuine
Genuinly Dutch, that they are.
In a market characterised by passengers who see air travel as duty not pleasure, and who tend to default to their national carrier, where service is at best servile and uninteresting, at worst (due to increasing technology) automated and cold.
Seems they have the current service described aptly. Interesting that they identify their customer base as mostly using the flag carrier which explains why tickets originating in Amsterdam are 3x as expensive as flights inbound to Amsterdam.
KLM claims that they are able to improve on the described experience due to their Dutch heritage.
We believe in…
- recognizing the person in the passenger
- acting with intelligence and pragmatism
- being memorably genuine
This sounds like a worthwhile direction to pursue. I am sceptical however if they will succeed. It is my understanding that the single person at KLM is not in a position to act pragmatically as they are hampered by processes put into place and even if willing are not able to "go the extra mile" for the customer.
customer segments identified
The passenger matrix is very interesting:
Only the minority (~40%) of their premium pax (~90% F/C) are members of any FFP.
90% of the frequent business pax however are FFP members and they travel in all classes. I guess that would be us. :-)
These premium pax are not considered price sensitive. I assume these are the 10% of passengers KLM identified as being responsible for the 60+% of their earnings. Not being price sensitive means no need for promotions or a better valued C product.
The business eco class of passengers are price sensitive and fly mostly in Y. Only about ~35% are FFP members for European travel and for intercontinental this number goes down to about ~21%.
The leisure traveller is price sensitive as well. 15% FFP for TAL, 34% for Intra-EU.
This matrix shows that KLM seperates their customers into two itinerary segments (Intercontinental vs. Intra-European), two market segments (Price sensitive vs. non Price sensitive) and two travel styles (Business vs. Leisure).
Based on that, the KLM customer mix consists of 75% business travellers. (Maybe I should start checking Business as a reason for my frequent flyer addiction :-)
KLM have identified three improvement areas/customer stories:
Ex Speed-iate: Getting you there… faster
Making travelling easier/faster. The usual: Mobile/Online Checkin, fast track lane here, priority line there, premium parking, minimum distance to walk, KLM cart to rush you to your connecting flight (YEAH!)
Person-to-Person customer experience
Improving communication: Rework of the customer communication, FlyingBlue Redesign (be scared!), improve FFP enrollment, better website to offer the information the customer seeks, language proficiency etc.
Packages in development...
Offer more packages to the customer, that means to offer more bookable added value, meaning additional revenue. The Economy Comfort package could be considered one of these examples.
Packages identified so far are:
- Express Package - "Minimize your time"
- Luxury Package - "Luxury Travel Experience"
- Refresh Package - "Arrive refreshed"
- Relax Package - "Make the journey part of the experience"
- Escort Package - "Take the stress out of travel"
This looks interesting but I fear a devaluation of the basic product in order to improve conversion ratio to these upgrade packages. This would decrease customer satisfaction immensely.
Near term initiatives kicked off
This looks really good. Easy but recognizable improvements.
- Consistently offer premium access for elites
- Allocate premium short haul flights close to the terminal - Less bus gates? How? The Fokker fleet often cannot pull up to a terminal bridge due to it's low height.
- Fix priority luggage arrival - Excellent. Fix it in your homebase first please. Up to 30min waiting time for intra-European luggage is horrible.
- Communicate office capabilities - Better advertisement of their Lounge biz areas.
- Easy access to tables, power outlets, and Internet while waiting at the gate - Who in their right mind is waiting at the gate? Most airports are not set up for that, the ambient noise is way too much, the gate lice are standing in the way etc. Go to the lounge, as a premium traveller you have access.
- One call center - One worldwide premium number. Trials starting in NL. - Uhoh. Premium number sounds like 0900. This sounds bad considering current waiting times. Please do offer regular local numbers as well.
- Birtday Recognition - A happy birthday card handed out by in-flight-crew. Ohhh, the fake personal touch. I like. Maybe AF could lean from that: http://www.flyertalk.com/forum/air-f...hday-cake.html
- Proactive and differentiated recovery for premiums - Buzzword error but a nice promise of better service for Premium passengers.
That is my analysis. Interesting changes to come, I am wondering however if KLM is able to pull this off.
Discuss. :-)