Customer Relationship Management in United Airline
United Airlines is a major United States airline with headquarters in Chicago, Illinois. The company offers airline services to most parts of the world including gateways to Europe, Australia, Asia, Africa, Latin America and the Middle East with one-stop or non-stop service from almost everywhere in the US (United Continental Holdings, 2010). The airline has an industry-leading loyalty program, which offers its customers more opportunities for earning and redeeming miles worldwide. The customers can use the miles for air travel, to book stays at brand name resorts and hotels and to shop for a wide variety of rental cars such as SUV and convertibles. Customers also benefit from deals and offers such as special offers, promotional certificates, vacation packages, RSS subscription, Veterans Advantage discount, e-mail subscriptions and United Specials (United Airlines, 2013). Generally, the customers are able to enjoy lower airline travel costs for using the company services. United Airline considers the overall customer experience in purchasing when considering customer value. The Airline has a sophisticated customer care program-“Make Amends” program-, which helps to resolve customer travel issues proactively. This helps in easing customer concerns and making them feel more comfortable. The program thus helps in incorporating customer value into the service equation. In case of a customer disservice, flight attendants and frontline employees with access to the system retrieve information on the customer history and value to the airline. The airline has also put in place technologies for allowing it to determine customer value.
The sources of value are not the same for all the customers. The company high-value frequent flyers benefit more than other customers do, for instance, in the event of flight cancellation they benefit from differentiated and special services (Boland, Morrison & O’Neill, 2002). The company has segmented its customer base into five segments’ (1K, Premier Gold, Premier Platinum, Premium Silver and all others- and created separate programs (for instance, preferential access to seats, upgrade eligibility) for each (Lilien, 2013). This segmentation help in guiding investment decision and driving greater insight into the high value customer needs. The company is able to understand the profitability of every customer and by assessing customer value to the company as well as their key needs; United Airline is able to determine ways of migrating the lower-value customers to higher-value segments. The customers are satisfied with the company services evidenced by the growing number of new customers and continued increase of the company revenues. According to the American Customer Satisfaction Index (2012) United Airline customer satisfaction rose from 60%-62%. Nonetheless, this index is still low as Jet Blue was at the top of the airline industry with a score of 81%. The loyalty of the organization customers is high. Segmentation has ensured that the company understands the different customer segments as well as the needs of every segment. Identifying the different customer needs has helped the airline to develop service based on those needs. In addition, it has enabled the company to provide services and promotions, which are aimed at only the segments that will respond positively to them. This has led to the high customer loyalty.
United airlines operate a loyalty program-points program as a CRM strategy. The programs provide the company with cumulative economic incentives to the people who buy the brand. The data obtained from the customers helps the company to establish a dialogue instrumental in attracting, retaining, and developing them as customers. The company CRM strategy also includes a non-member database and improvement of the customer experience on the day of their flight (Dransfield & Needham, 2005). The company also has a system which helps in identifying trends in passenger flight destination to be able to effectively plan and coordinate flight routes, increasing effectiveness in managing booking and allowing more targeted promotions. The company has successfully implemented its CRM Strategy. The company overall strategies concerning customer acquisition, retention and development entail being well positioned as a carrier through identification of customer needs to ensure that the company develops services based on their needs. The company seeks to develop service strategies, which meet the needs of a wide range of customers.