Greater Noida, NCR Delhi

Customer relationship management

Project on
Aviation sector









Guided By: Submitted By:
(Prof. Anurupa Singh) Abhik Biswas
Faraz Khan
Kapil Dev Agrawal
Pratibha Yadav
Rahul Pandey
Shubham Sharma




IILM Graduate School of Management
16, Knowledge Park II, Greater Noida-201 306
NCR Delhi


ACKNOWLEGDEMENT
It is our privilege to take the opportunity to thanks all those
who have directly or indirectly helped us in the completion of
this present Project work.
We are delighted to thanks Prof. Anurupa Singh for her able
guidance, constructive criticism and generous help throughout
project. We would also like to express our appreciation for
the encouragement and direct assistance, excellent
cooperation, valuable suggestion and help given by her at
every step of our project.
Words fail to express our humble gratitude and profound
regards to our Parents for their affectionate encouragement
and blessing which always being a source of inspiration for me
without which, it could not have been possible to achieve the
objective.












Introduction

In the 1980s, airlines introduced frequent-flyer programs to increase the loyalty of
their customers, thereby pioneering a new approach to marketing that has come to
be known, more broadly, as customer relationship management. Today, CRM
programs are used in a wide variety of industries to identify and retain valuable
customers, to encourage fickle ones to spend more, and to cut the cost of serving
those who are less valuable. But the pioneers have failed to keep pace with CRM
innovationto their detriment.
In the competitive travel industry, customer satisfaction no longer guarantees
customer loyalty. Deregulation, increased parity of products, the availability of new
and diverse direct distribution channels, industry alliances, and many other factors
have combined to force operators in the Airline industry to focus on new
differentiators in order to maintain current and develop greater market share. In
response to this new environment, travel providers are undertaking initiatives
centred on identifying, developing and retaining high-value customers, under the
overall banner of customer relationship management or CRM.
A major purpose of this paper is to provide a managerially useful, end-to-end view
of the CRM process for airline Industry. The basic perspective is taken is from
customer needs and what do managers need to know about their customers and
how that information is used to develop a complete Airline CRM perspective.
























CRM?

First of all, it must be understood that at its core, CRM is more than just a set of
technologies: it is a process. This fact will be of significant importance to Information
Technology (IT) professionals who will be asked to support CRM with information
and applications. Furthermore, it is intended to be a repeatable process to ensure
ongoing, continually improving, and consistent results. Simply stated, CRM
comprises the acquisition and deployment of knowledge about customers to enable
a airline to sell more of their product and service more efficiently (Flanagan and
Sadie,1998).
Customer Relationship Management (CRM) is the disciplined application of
customer information to build customer relationships through:
Continually refining insights into customer needs, habits, and economics
Developing targeted and tailored value propositions based on those inputs
Strategically focusing business resources on activities that build long-term
customer and
economic value.
A successful CRM strategy cannot be implemented by simply installing and
integrating a software package and will not happen over night. Changes must occur
at all levels including policies and processes, front of house customer service,
employee training, marketing, systems and information management; all aspects of
the business must be reshaped to be customer driven.
To be effective, the CRM process needs to be integrated end-to-end across
marketing, sales, and customer service. A good CRM program needs to:
Identify customer success factors
Create a customer-based culture
Adopt customer-based measures
Develop an end-to-end process to serve customers
Recommend what questions to ask to help a customer solve a problem
Recommend what to tell a customer with a complaint about a purchase
Track all aspects of selling to customers and prospects as well as customer support.

When setting up a CRM segment for a company it might first want to identify what
profile aspects it feels are relevant to its business, such as what information it needs
to serve its customers, the customer's past financial history, the effects of the CRM
segment and what information is not useful. Being able to eliminate unwanted
information can be a large aspect of implementing CRM systems. When designing a
CRM's structure, a company may want to consider keeping more extensive
information on their primary customers and keeping less extensive details on the
low-margin clients.





Key Elements of CRM Architecture.
e-CRM
Today, more and more airlines are using the Internet to implement e-business
applications and CRM strategy. These applications can be very resource intensive. e-
CRM is interest intensified in managing customer relationship through the Internet,
and many airlines approached this as a separate project to their e-business strategy.
What differentiates airlines in today's hyper-competitive and demand-driven
markets is their ability to address their customers' preferences and priorities. This
means more than simply knowing and understanding their customers better than
their competitors do. It means strategically implementing this customer knowledge
in every area of the airline, from the highest management level to all the employees
who come into direct contact with customers.
Establishing and strengthening long-term relationships with airline's customers is
the key to success. It's the focus of a well-structured and coordinated process of
customer relationship management.
e-CRM involves far more than automating processes in sales, marketing, and service
and then increasing the efficiency of these processes. It involves conducting
interactions with customers on a more informed basis and individually tailoring
them to customers' needs






Airline CRM

We defined what we mean by CRM, now its the time to more focus on Airline CRM.
In this section we define a sample model of Airline electronic CRM and elaborate
what we expect from it. We all know that airline's success depends heavily on its
ability to intelligently manage sales, marketing, and service processes and to draw
mutual advantages from understanding of airline's customers. To help airline
maximize the strategic value of customer centric initiatives, Airline e-CRM model
provides a comprehensive analytical solution, it can contribute toward improving
the way that measure and optimize airline's relationships with customers. Airline e-
CRM model can be conceptualized as a system that is made up of components,
linkages amongst the components, and dynamics that takes advantage of the
properties of the Internet and relationship to make money. It takes advantage of the
properties of the Internet in the way it builds each of the components-value, scope,
revenue sources, pricing, connected activities, implementation, capabilities,
sustainability and crafts the linkages among these components. It is what,
preferably, enables an airline to have a sustainable competitive advantage. It
includes three components (subsystem): Web Base Airline-Passenger Interaction
subsystem; Airline Data Warehouse subsystem; and Airline e-CRM operation
subsystem.

Airline e-CRM model is 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. At the heart of this offering is the CRM Foundation,
which includes the CRM data model, starter set of CRM queries, reports and
analysis, sample data, a demonstration prototype, data utilities and scripts, and
comprehensive documentation that covers implementation guidelines, business
perspective and analysis guidelines, system components, data model descriptions,
and use and customization guidelines.
Since managing customer interactions is a vital piece of the e-CRM puzzle, planning
and implementing a Multi-Channel Interaction Management solution with the other
subsystems and enterprise solutions is crucial. Management is the foundation for
evolving customer service into customer satisfaction by tying together all customer
data - no matter where it is located within the enterprise. Making this information
easily and quickly accessible to the customer management process, and ensuring
each customer is handled in the most efficient and effective way possible is the
ultimate result of a well-defined and deployed strategy and solution.

Airline CRM model also:
Provides an understanding of customer behaviour 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

CRM Architecture for Airlines



The CRM Architecture tell us four stages of implementation of CRM in Aviation sector
Touch points and Channels: The are various point were the information and complains are
gathered these points are also use for sending feed back to customer these points are
connected through various Multi-Channel Connectivity.
CRM Application: After gathering information from touch point these data are transfer to
CRM application software such as Loyalty Administration, Sales Automation, Campaign
Management and others.
Core Airline System: Then these information the further transfer to Core Airline System
through Application integration.
Reporting and Analytics: Then information then stored and processed in Data Warehouse
and various Analytical and Reporting @ Analysis model are used.



















Advantages to install CRM in Airlines

A vexing question for a number of airlines is how much value does customer
relationship management, or CRM, really deliver to the bottom line and how does an
airline go about getting
it? While this question remains unanswered, many skeptical senior managers will
continue to pay
lip service the strategic importance of a customer-centric perspective and will
continue with business as usual. Applied Technologies Group's investigation of 17
world-class airlines has clear indicated that significant revenue improvements of 0.9
and 2.4% are achievable .
This 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, this accounts for approximately 0.05% of
revenues.
Advantages from implementation of CRM strategy with Interaction Management
include
Planning and implementing business processes across airlines and CRM
applications ensures customers are handled in the most efficient and effective
fashion from the beginning to the end of the interaction based on their real-
time value to airlines.
Implementing CRM applications may simultaneously lower the cost of
design, implementation, installation, training, ownership and administration.
It also reduces the risk of re-engineering systems at a later date.
Consistent and dynamic processes are built up-front for the customer. This
forces the airline to consider each element in the process design including the
network, switch, multi-media management, and the CRM - ensuring
streamlined processes are in place before the customer makes contact.
Influence and enhance intelligent call routing by leveraging the data gathered
from the switch (ANI, DNIS, Caller ID), caller, and CRM applications.
Create and leverage detailed statistics/metrics and cradle-to-grave reports.
Real-time access to historical customer information allows support staff to
know who your customer is, why the customer is calling, what's been done,
what needs to be done, and respond in the most efficient, expedient manner
possible.
There are many benefits to be gained for airlines and airline passengers, firstly,
passengers could book and check in through internet 24 hours, 7 days a week, at
any time, any where. Secondly, airlines could reduce sales cost. American Southwest
Airlines CEO, Gary Kelly said the Web site is playing a major role in mitigating the
rise in unit costs affected by high fuel prices. It's 10 times cheaper to deliver to
customers through the online service than through a travel agent, Kelly said, and
costs 5 times less than using Southwest's own reservation staff. The booking cost per
passenger online is "well under $1," said Kelly, and is scaling down even further. He
said Internet use by passengers was helping the carrier keep fares at low discount
levels. (Aviation Week & Space Technology/March 6, 2000, p38).

Massive investment in both business-to-business (B2B) and business-to-customer
(B2C) information systems is expected to translate into important cost savings in
procurement, sales, billing and other support activities. The airline's fully automatic
ordering system, for example, should reduce order processing costs by 90%,
according to Chairman/CEO Jorgen Weber of Lufthansa Aviation Group. (Aviation
Week & Space Technology/May 15, 2000, p40).

Customers enjoy personal treatment, together with appropriate advice on getting the
best out of their purchases. The airline may also put customers in touch with others
with whom they have similarities, for example by inviting them to meetings.

For the airlines implementing CRM, it becomes possible to single out customers who
are profitable, gaining an understanding of their preferences to improve retention
and increase the volumes sold. These valuable customers can become advocates for
the airline and its products. Finally, CRM helps an airline to build loyalty. Because it
is a marketing truism that it costs five times more to generate new customers than it
does to retain existing ones, that is a compelling argument.

With e-CRM, airlines can increase sales and customer loyalty. This strategy can
improve sales effectiveness, bring higher value to all of airline's key business
relationships, help airline to understand what each client relationship is truly worth,
develop and reinforce a consistent experience for customers, improve management
effectiveness, improve tactical and strategic planning, respond faster to competitive
challenges, use critical resources more efficiently, and reduce administrative burdens
and overall cost.




Now we will discuss about the CRM process followed by JET Airways to get the
advantages as mentioned above:-














Mercator have the best of the worlds as well as a unique collective customer loyalty
management and IT experience, They are part of the Emirates Group one of the
worlds leaders in travel and aviation.

The customers benefit from the increased recognition and rewards that they
deserve,
whilst the airlines benefit from the innovative ideas which help the airlines to drive
down costs, streamline processes and boost profits ---- That is what the main
purpose of Mercator.

Frequent flyers now have a bewildering choice of options when making their travel
arrangements. They are presented with an increasingly diverse choice from
competitors who would be more than happy to lure away the most frequent
travellers. This means that every airline company have to work harder than ever to
keep hold of their most valuable customers. Loyalty has undoubtedly become the
key weapon in the battle to secure the maximum possible revenue and competitive
advantage and that is why the CLM process (CRIS) developed by Mercator is
followed by Jet Airlines co. So before we start about the main process we should
know what is CRIS.

CRIS (CUSTOMER RELATIONSHIP INFORMATION SYSTEM) is a single
comprehensive customer repository for members and prospects (non-members)
capturing details of their interaction with the Loyalty Programme along with their
Profile information. An on-line enrolment form facilitates the entry of customer
enrolments directly into the System while a customer call is being answered.
CRIS also captures enrolments through various channels like:
Web enrolments
Batch enrolments using data files from various sources
Enrolment Mask messages on the reservations system.

For a single customer, several addresses can be captured. Customer profiles
can be created and maintained through preferences meals, drinks, hobbies,
lifestyle, and language. CRIS features an extremely flexible customer profile set-
up.


Allows airlines to flexibly design and continually evolve their their frequent
flyer programmed
Empowers the marketing unit to deliver highly effective and targeted
campaigns at segments of the FFP or at partner groups (both airline and non-
airline), through a powerful rules engine
Provides a comprehensive database of PNR records, which are used for
automatic updating of FFP data and service recovery
Delivers easy integration and Internet access to customers and staff for
enrolment, redemption and an integrated view of the customer. APIs support
call centers, reservations, check-in and personalized customer services
enabling CRM at all touch points
A user friendly GUI gives call center staff features which increase
productivity such as:
1) A member information dashboard
2) A list of tasks assigned to the staff
3) User defined My Favorites giving quick access to various
functions
Provides the highest functional coverage for member and customer
management, programme management, partner management and fulfillment
handling
Tracks, monitors and processes complaints through an integrate service
recovery module
Uses the Internet for connectivity thereby reducing operational costs
Proactively helps to solve issues before they become problems

Customer Information Management :-
Concise and enhanced customer information view
Customer related alerts highlighted
Customer contact history
Multiple members in one session can be queried

Rules Engine :- CRIS has a powerful interface to define the rules for various
promotions, member qualifications and tier change

Three types of rules can be defined in CRIS:
Promotional-------- Promotional rules are triggered by member earning
activities; useful for marketing promotion campaigns. The miles earned are
recorded as bonus miles and a special "miles to dollar" rate can be associated.
Special cases of "member get member" and corporate bonus rules can be set
Conditional------- Conditional rules are used to indicate member qualification
into the programme. Multiple conditional rules can be set up in the system
Tier change------- Tier change rules are used to upgrade, downgrade or retain
members across tiers

Rewards driven by the business include promotions such as cash plus miles or
discount on awards. The rules engine can be set up to define the reward promotion
based upon various selection criteria.
The prerequisites for the application of these rules can be set based upon the
following criteria, thus enhancing the power of the rules engine:

Member profile details such as tier, territory or country
History transactions (e.g. the completion of a number of similar transactions)
Activity details such as flight number or sector
Special Criteria, a tool that allows the writing of a query including any
member attribute from the database

Administration
The CRIS administration module facilitates easy one-time set-up and
maintenance of reference data such as customer types, activity types,
enrolment methods, and tiers
CRIS uses Oracle's scheduling feature to execute off-line jobs such as tier
upgrades, card fulfilment and welcome letter mailing
CRIS maintains letter templates used for communications by the call centre
agents
CRIS security can be maintained at group and user levels. Access to different
modules can be restricted at both levels
The CRIS rules engine is defined and controlled at the administration level
The System Query Builder module gives an administrator further access to
the various data elements stored in the database

Enrolments
CRIS acts as a single repository for the various types of defined customers
together with their profile information across different channels
Customers can be enrolled in a number of ways:
Over the web
Online by a customer services agent while talking to the customer
Batch enrolments through uploading of data files
Through the reservation system interface
CRIS is flexible in defining the customer profile set-up

Tier Management

CRIS supports multiple user-defined tiers
Tier change criteria are configured into the system. Changes occur
automatically when the necessary criteria are met and the appropriate
fulfillment procedure is triggered
Tier change criteria can be configured for individual markets

Mileage Accrual

Miles can be earned as tier miles, miles or bonus miles.
Tier miles are used to move members across tiers
Miles are earned to claim various member rewards
Bonus miles can be awarded on marketing campaigns driven by
member profile, activity attributes and historic trends
Miles can be automatically credited to the members account:

Via the PNR repository
Through text file uploads for partner activities

The expiry period for miles can be configured into the system as per the
requirements, e.g. with oldest miles being burned first
Retrospective claims can also be handled in CRIS. For example:

A passenger fails to show his FFP membership card at check-in. On
his return he calls the service centre to claim his miles. The call centre
agent is able to verify the flown travel by checking the customer data
on the PNR repository. Once verified the miles are immediately
credited to the member's account.

Mileage Redemption

Miles can be redeemed in real time for flights on the host carrier through the
reservation system interface, thereby streamlining processes and removing
the need for manual intervention
Members can redeem multiple activities in one transaction. For example, a
flight, hotel accommodation and car hire
Cancellations are also managed in CRIS with options to specify cancellation
charges or percentage of miles returned to the members account
The system supports flexible zonal mapping to compute redemption miles
required for rewards
Administration charges are managed, such as rush delivery and cancellation
fees

Family Programme

CRIS supports the management of a family programme. One member is
nominated as the head and any number of family members can be supported
Each named person is a full FFP member, earning miles with a percentage of
those miles being posted to the head's account

Travel Coordinator

CRIS supports account management through a customers nominated travel
coordinator. This travel coordinator can operate the account on behalf of the
customer

Corporate Programme

CRIS comprehensively manages corporate accounts where normal
"earn" and "burn" policies apply
Special bonus schemes can be configured to individual client specifications
Supports the creation and management of frequent flyer programmes for
children
Partner Programme
FFP members are able to accrue and redeem miles against various
organisations with whom the host airline has agreements
Partner contracts are defined in the system and an exchange rate set for each
partner
A comprehensive partner data exchange module supports partner accrual
and redemption activities
Member activities are uploaded to CRIS and validated prior to posting the
miles in the member's account
Billing reports are automatically generated
Double dipping check feature attempts to prevent miles accrual on multiple
programmes for the same travel

Customer Affairs and Service Audit (CASA)

CASA, an optional module of CRIS, monitors and logs all incoming and
outgoing customer communication. Should a customer complain or
compliment, CASA manages the process. It categorises the complaint and
then generates an acknowledgement using a customised or standard
template letter. The CASA module also facilitates workflow management for
investigation and service audits
Compensation profiles can be defined against the complaint categories

PNR Database
CRIS provides a comprehensive database of PNR records, which can be used
for:
Automatic updating of FFP data
Automatic accrual
Verification of retro claims
Confirmation of actual travel
Personal preferences of FFP members can be automatically included in the
PNR e.g. meal requirements, preferred seating
Reports can be generated on the travel patterns of each passenger



CRIS Messenger

CRIS can be parameterized to send valuable information to members. For
example, a member may want to know if there is any change in their flight
schedule, or the airline may wish to send promotional messages upon
qualification to a higher tier. This can be achieved through automatically
sending them an SMS message or e-mail, either on an ad-hoc basis or as a
broadcast

Interfacing
CRIS is based on the Oracle platform, an open architecture which can easily
interface with external systems on diverse platforms using APIs. The multiple
platforms include Microsoft and Java technologies and mainframe
applications
Examples of applications interfacing with CRIS include reservations
systems, websites, computer-telephony integration (CTI) solutions and
interactive voice response (IVR) systems

Technical Architecture

CRIS has been developed using state-of-the-art, open and scalable technology:
Oracle database 9i
Developer 2000 (Oracle Forms, Oracle Reports)
Any Oracle-based reporting tool, such as Business Objects
Runs on UNIX/Windows NT/Windows 2000
Oracle Web Server (Optional)
CITRIX (Optional)
MQ Series (Optional)
CRIS uses stored procedures to support real time access by an Internet
application. Some examples are enrolment, change of personal details,
viewing of future bookings, registering for campaigns, mini-statements and
detailed statements. CRIS also contains procedures that can be used by an
airline reservation system to provide real time data exchange. These
procedures support the upload of customer profiles to the reservations system
and interactive entries for real time redemption.
Developments
CRIS will become fully web-enabled through the development of its front end
in .NET
A data warehousing facility will allow users to extract any information in the
database and analyse it in any way to best suit the needs of their business
A bulletin board will allow the easy dissemination of information to users
upon log-in.