Customer Experience Management (CEM) Keynote at the New York Loyalty Marketing and FFP Spring 2011 Conference, by Rainer Uphoff See also blog entry: http://ourpax.com/tools/from-crm-to-cem-monetizing-real-loyalty/ or http://ourpax.com

1. From CRM to CEM:
It’s all about
Customer
Experience
Rainer Uphoff
avionline consulting

2. THE BASIC LAWS OF LOYALTY
Loyalty is…
…paying more,
despite competitors’
discounts & freebies

3. THE BASIC LAWS OF LOYALTY
Loyalty is NOT…
…having no choice
…buying at a discount
…inertia

4. THE BASIC LAWS OF LOYALTY
Neither is loyalty…
…being loyal to
2 (3,4,…) parties
“Didn’t you get my email?”
AFTER CELEBRATING 30 YEARS OF FFP,
WHY ARE YOUR CUSTOMERS
CHEATING ON YOU MORE THAN EVER?

5. LET’STAKE A
LOOK AT
AVIATION
HISTORY

6. CUSTOMER EXPERIENCE LEADERSHIP
1930s – 1970s
Regulated Environment:
the pilot-CEO is King!

7. CUSTOMER EXPERIENCE LEADERSHIP
1970s – 2010s
Deregulation and Competition:
The CFO-CEO is King!

8. And then, something
happened:

9. KEY WORDS SLIDE

10. What can we do
when shaving
the skull is no
longer an
option?

11. CUSTOMER EXPERIENCE LEADERSHIP
The time of the
people-CEO
has come

12. THE COMMODITY THREAT
Is your
Loyalty Program
just another
commodity?

13. THE COMMODITY THREAT
LOYALTY is
KEY to SUCCESS:
A SATIFIED customer
is NOT more loyal…
…COMMODITIES ACTUALLY DO SATISFY!
BUT ONLY THE COST LEADER CAN MAKE MONEY

14. THE COMMODITY THREAT
There can be only
ONE cost leader
selling “the perfect
commodity”

15. THE COMMODITY THREAT
The rest needs to
DIFFERENTIATE and
create VALUE beyond
PRICE

16. IN THE “MATERIAL” WORLD WE RECOGNIZE
VALUE IMMEDIATELY. DO YOU PREFER…
This?
PRICE: or “that”?
≈9 $/€
VALUE:
!?!

17. THE COMMODITY THREAT
FTPs have come
of age
Loyalty has
become an
industry

18. THE COMMODITY
THREAT
Are there
wrinkles?
Outdated dogmas?
Byzantine rules?
Loss of focus on
adding VALUE?

19. THE COMMODITY THREAT
Let’s face it:
Many loyalty programs
have become a boring
commodity
or even a
hassle for your
“valued customer”

20. IMPROVABLE PRACTICE
The Premium tier
dilemma:
Save miles or status?

21. IMPROVABLE PRACTICE
Airlines treat
premium tier
customers like cattle
when travelling on a
cheap ticket.
S/he’s still the same
person!

22. IMPROVABLE PRACTICE
Airlines and hotels
frequently don’t
reward the decision
maker

23. IMPROVABLE PRACTICE
No reasonable
availability of award
tickets, unreasonable
fees
Ever heard of the
GOLDEN spot?

24. What about the
BLACK
spot?

26. UNDERSTAND WHAT CUSTOMERS VALUE

27. CUSTOMER EXPERIENCE LEADERSHIP
The time for CEM
integrated loyalty
marketing has come

28. THE COMMODITY THREAT
R
E
C
P O
O
Cost- G
I Premium
conscious N
N customers customers
I
T T
S I
O
N

29. CRM+CEM = MARRIAGE MADE IN HEAVEN
REASONS
C
FEELINGS
PRICE
C L OYALTY
MILES
R E H APINESS
FEATURES M ML OVE
AWARDS BUSINESS CONCIERGE BUSINESS

30. FTPS: THE REAL CHALLENGE
POINTS are a RECOGNITION
COMMODITY. generates “priceless
VALUE”.
A REWARDS oriented A RECOGNITION
program must oriented program
a) be cost leader must be a “mass
b) be generosity customization
leader to be leader” (technology
competitive and service)

31. IT’S ALL ABOUT CUSTOMER EXPERIENCE
LOYALTY CEM

32. CEM can help to…
…get all customer
relevant value
drivers into one
strategic
framework

33. CEM: single strategic/operational framework

34. Are FFPs up to what they
were created for?
¿Do they
improve the
customer-ROI?

35. Higher yield / pax
Additional Longer pax lifetime
business More customer referrals
Business
gained+saved
Better pax retention
Business Wallet share recovery
saved Recovered pax
Early warning sensors

36. ¿Do you have an integrated
financial-CEM/
CRM
STRATEGY?

37. Traditional segmented analysis of
pax value (income based)

38. CEM analysis (persona based)
CEM helps to make the loyalty marketing
investment more precise

39. LONG TERM PROFIT ANALYSIS
CEM acts on customer equity, creating
long term value.
'#$%
(#$%
)#$%
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)% (% '% &%
!)#$%
*+,-./-%0-1.+%670,-8+.%
!(#$% 9:74,;%
!'#$%
!&#$%
!"#$%

40. WHAT’S NEXT?
Do we need
some
PLASTIC
SURGERY to
consolidate
the beauty?

41. IT’S TIME TO INNOVATE!
Get Loyalty
Marketing deeply
routed in the
corporate strategy.
Get the corporate
strategy deeply
rooted in what
customers VALUE.
Know what
customers value.

42. CEM TOOLS:
VALUE GENERATING INNOVATION
Lucy García!
Eye surgeon @ 3 hospitals!
41 years, married, 3 children. !
Here mom lives with them.!
• 17 business trips/year !
(she pays: price sensitive)!
• 3 family trips/year!
Loves 2x1 offers for husband
Customer Journey ECG
or kids going with her!
Hates overnight trips!
Objectives,
scope &
Customer
segment
Hates checking in baggage!
!
journey type
Moments
of truth
Key
Key journey
Journey
stepsSteps
Great
+100
Custom
er
Satisfac
tion
Rating
-100
Poor
Levers for

43. 1. CEM FOR FTP USERS: AIRLINES, HOTELS,…
Use CEM to get the loyalty
marketing and FTP tied into the
core customer strategy.
Use CRM to provide CEM with
basic VoC

44. 2. CEM FOR FTP PROVIDERS/OPERATORS
Use CEM to find out
what customers
really VALUE
Help your customers
to de-commoditize
Integrate both
halves of the brain
into a single offering
Tribute to the
pioneers

45. 3. CEM FOR FTP IT PROVIDERS/DEVELOPERS
Help your customers to
innovate
Do the CEM homework to
create functions that
SUPPORT the intoduction
of new, higly valued
functions
Overheated buzzword,
but still important: SM

46. EXAMPLE: TENERIFE TOURISM INNOVATION LAB
iPad/Smartphone destination guides
¢ CRM triggers recommendations (+value, +ad $€)
¢ Location check-in/comments >> rewards

47. EXAMPLE: SMALL EUROPEAN CRS
“CEM built in”
Many small tweaks to enable operators to link CRM/
FFP with CEM based Value Drivers

48. ONE
MORE
TING

49. LAW PROPOSAL
Arquitects, lawyers, doctors and
FTP designers MUST use their
own product for at least year
Let employees get miles and
status with ID tickets!!!
• Managers will finally notice the
stupid rules
• Employees will finally understand
why customers buy crazy routes

50. THANK YOU!!
RAINER@UPHOFF.COM
BLOG: OURPAX.COM
RAINERUP
avionline consulting