Air travel pain points: stop charging fees, start making money!

Alaska offers a baggage product with an extra value.

Alaska offers a baggage product with an extra value.

Checking in baggage for free is already a major, multiple pain point in the flight experience as you have to suffer…

  • the check-in queue
  • the wait to get it back
  • the (very real) risk of not getting it on the belt and all the subsequent hassle.

Having to pay for it, on top of all the hassle, without getting some extra value, creates an unbearable pain (point) and generates negative value despite the apparent cash-flow. But having to force all your belongings into a 55x40x25 cm piece of hand baggage plus the stress of smuggling into the aircraft that extra computer bag also rests pleasure from travel while slowing down the boarding process.

As an airline, you should add value to an unloved process and make money with it instead of alienating customers by “taxing” them for a service that represents no positive value to them. Here are just a few ideas on how improve ancillary revenues by selling to customers what they really want, in this case, related to transporting their baggage:

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Ooops. What happened to the blog?

Sorry. At avionline we have been so extremely busy developing innovative business models and corporate intrapreneurship initiatives around our CEM/Value Generation Management that we had to cut back some of our other activities. But now we are back, ready to share and discuss new experiences!

Please stay tuned!

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Is Ryanair cheap? Let’s reverse–engineer the value proposition.

Ryanair OLeary clownAvionline’s Value Generation Management (VGM) methodology looks at opportunities to generate value for different customer segments at the different touch points along the service chain.

Typically, after creating this matrix, define weight variables, we obtain data from surveys and market intelligence and establish KPIs to get the thing rolling. At the end, you will know where customers are willing to pay more, where you are overinvesting into a product feature and, perhaps most importantly, the method will provide you with insight and ideas for innovation and other margin boosters. Continue reading

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The Golden Gap of Loyalty Programs: Why your best customers defect just when you start treating them well

I am traveling enough to exceed the principal elite tier thresholds of more than one global airline alliance. Currently, I am quite fine with my Iberia Plus Gold status (OneWorld Sapphire). But after reaching early in the year the status miles required to pass the next Gold renewal date, I still have plenty of flying ahead. Which takes me to the following dilemma:

Should I remain loyal to Oneworld to become a Platinum (Emerald) tier customer or should I start doing merits to become a Star Alliance or a Skyteam elite tier passenger and be able to reap benefits in two alliance ecosystems next year? Continue reading

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Your service: heartlessly perfect or perfectly heartless?

Perfect airlineBeing a frequent traveler implies a stressful lifestyle. We are living in an environment, in which things permanently go wrong. A thunderstorm, thick fog, a maintenance issue, a strike: zass – the trip that cost thousands of €/$ and days of quality time with our family has just been ruined. We have no control over it. We are one of hundreds, maybe thousands of passengers waiting equally eagerly for a solution. No Mega-diamond-Platinum-President’s Club status can help us.

Of course, we volunteer to give up our priority waiting list position on the last and only alternative flight that day for a mom traveling with four children (why do daddies traveling with a hoard of kids never receive the same sympathy? At least, I never do…). Continue reading

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The payment customer experience

One of the weakest links in the airline Customer Experience Itinerary chain is the payment experience. For sure it’s the one you do not want to mess up as payment is the most authentic moment of truth.

Actually, there are three perspectives to it, although most customers will perceive only two: the buyer’s and the seller’s one. If something goes wrong, the buyer will blame the seller.

But there is a third one (let’s consider all the potential providers as one): Continue reading

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My CEM Birthday Experience

Birthday cakeI am not going to reveal my actual birthday date, but I will share with you a very specific kind of customer experience: corporate birthday congratulation emails.

We all get spammed, but is there a worse moment to get meaningless emails burying the personal messages from people we really care about just on our birthday? Hardly…

Does that mean that companies should just stop sending out birthday greetings? Depends. Let’s see how a birthday can be used to tighten bonds with a customer rather than annoying him or her.

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Innovation: The airlines’ long march from cost to value centricity. The Latin American experience.

Innovation requires competitive pressure and a culture of cooperation to make it happen. In Latin America, many indicators, also from other industries, are suggesting that this is not yet happening. But, does this exempt Latin American (and other) airlines from creating value through innovation?

Latin American airlines have been among the star performers of the last decade. Double-digit economic growth rate in key economies, most notably Brazil, have helped to create regional champions like LAN, TAM, Avianca, Taca or Copa. LAN and TAM, Avianca and Taca merged, most major airlines joint an international alliance.

The Latin American airline industry left behind its shabby image and now has an impeccable safety record, a great product and a modernized fleet, which makes the aircraft of some US competitors look like flying museums. There is no doubt, the Latin American airline industry did their homework and created one of the most efficient players in the world.

But now the party is over. Economic and passenger traffic growth curves are flattening, yields are eroding and profits have given way to losses. Can innovation save the situation? Continue reading

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Hitit’s Crane Talk covers avionline’s CEM methodology for FFP

Hitit, one of the leading airline IT solutions vendors, considered avionline’s methodology to optimize the value proposition of  Frequent Flyer Programs  interesting enough to include it in their Crane Talk newsletter.

Click here to access it.

Feels good to see how leaders like USA Today and Hitit consider our thought leadership in the field of Customer Experience Management (CEM) – although we developed it a step further into Value Generation Management (VGM)  - as an industry reference.

Thank you, Hitit!

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Oh no, Iberia, you just screwed up again. Do you hate premium customers?

IB broken value proposition

Iberia just broke its basic value proposition for premium customers by introducing LCC-like fare unbundling, in the form of an extra charge for using credit cards. Click on the image to to visualize how absurd Iberia's desperation for short term cash has become.

UPDATE: Iberia just responded that they included this into their list of potential improvements. That’s a good first step! Hopefully the good intentions will become a reality soon. We’ll follow up within 30 days. Here is the original post:
I am trying to like Iberia. Really! But this time they badly slapped their best customers straight in the face by applying credit card fees also to their Iberia Plus Gold and Platinum members, even on big-ticket business class tickets. In one second all the trust built up over the last months with important service improvements has been ruined.

I am not here to lecture anybody on what to do with their businesses (at least not for free ;-) ), but this one is well worth a case study: it is the case of a legacy airline, so nervous from losses inflicted by low-cost competitors that it starts applying the LCC hassles also to their premium customers! Amazing.

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ourpax.com, featured by USA Today


ourpax.com featured by USA Today

ourpax.com featured by USA Today

It is an immense honor to see the last entry to this travel customer experience blog featured by USA Today. Click here or on the screenshot to have a look at it!

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FFPs: stop rewarding the wrong customer. Get the experience right!

Loyalty matrix

After the break you'll find a detailed description of this graph.

Traditional frequent traveler programs offer points/miles (a disguised discount) and elite status (disguised customer experience freebies) to incentivize repeat and higher value purchases. Does this still drive loyalty in times of Tripadvisor customer empowerment?

In general, discounts are little more than a public confession that the customer “doesn´t buy” a company´s value proposition. Look at really desirable products. Apple never discounts their iPads or iPhones because customers really want them, nearly at any price.

Let’s have a look at the customers to analyze the relationship between loyalty programs and customer experience management (CEM):

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