After decades of initiatives about “customer centric organisations” (the 1980s), “loyalty and CRM” (the 1990s) and “customer experience management” (the 2000s), business leaders are discovering with dismay that the customer of the 2010s is less loyal than ever.
It’s just the logical consequence of the brutal commoditization of the airline business. All (well… most) airlines are basically offering the same thing: transporting loads of people from A to B using the same type of aircraft aircraft, the same airports and even the same handling agents…
Satisfying a customer no longer guarantees his loyalty as competitors satisfy his or her needs equally.
Does this mean that only the cheapest survive?
No way! Sure, costs are key to remain competitive, but only one can be “the cheapest” in a given market. Luckily, all the others have no need to be another Ryanair.
However, it is amazing to watch to which extent these companies are losing opportunities to create new value propositions for customers. Commoditizing yourself is a formula for disaster unless you are the real cost leader!
We are experiencing the second revolution of the airline industry: the first happened after its deregulations starting in the 1970s. With the arrival of true competition, the age of “pilot-CEOs” ended, giving way to a new reality, dominated by “financial CEOs”.
But now, as the low-cost-revolution hardly permits any new turns of the (cost) screw (in mature aviation markets), the age of the “customer CEO” has come. Airlines, hotels, etc. are now dealing with well informed and publicly articulate customers, looking for “memorable experiences” at a fair price.
The time of the “people-CEO” has come. It’s a new breed of leaders genuinely concerned about serving customers, employees and, that’s new, the communities the airline is operating to. Reputation is about genuine leadership, not PR stunts orchestrated by external consultants!
Only Southwest Airline has been able to combine both revolutions consistently during now nearly 40 years – any doubts about ROI?
Of course, costs (driver of second generation airlines’ competitiveness) as well as operational and technical excellence (which made first generation airlines stand apart) will continue to be basic components of any successful airline – we will always want to fly cheap and safely. But in the new generation airlines the corporate power core will shift invariably to the “people” side of the business. This includes service innovators.
Today, airlines must be able to create new value-driven propositions for which customers will be happy to pay for, and this requires applying down-to-earth tools and techniques to re-design the customer experience.
However, the real challenge is to develop a new, people centred leadership style in your organisation.
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