How Airlines Benefit From Relationship Marketing
Relationship marketing is used by airline carriers to gain a competitive advantage by developing and nurturing strong buying habits within its consumer base. Because there are numerous airlines competing for the same customers, effective relationship marketing not only increases customer loyalty, but it also improves market share, brand awareness and customer retention.
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Function
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Airlines all over the world use relationship marketing programs to strengthen their bond with customers and increase brand loyalty over time. Examples of how airlines build their brand using relationship marketing are frequent flier programs, elite membership perks, airport VIP lounges, first-class upgrades and strategic partnerships with other airline companies to increase passenger routes.
History
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Though the airline industry was created in the 1920s, it was not until after World War II that the airline industries begin to view relationship marketing as an important tool for competing against other airlines. After the passage of the Airline Deregulation Act of 1978, competition among the airlines for passengers increased significantly. Airline companies were soon recognized as leaders in developing relationship marketing tactics such as the reward point system, competitive ticket pricing and product differentiation.
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Advantages
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By implementing a successful relationship marketing plan, airlines better understand customer needs and wants. Airline companies use this information to quickly respond to and satisfy passenger requests and increase the potential for future sales. For instance, airlines use frequent flier programs to identify customers who spend significant money for travel. The information collected through these programs, which include hotel stays, car rentals and credit card usage, indicate the customers that are likely to spend the most money and boost airline profits.
Expert Insight
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An article written by Rutgers University professor, Barbara B. Sterns, and published in the Journal of Advertising mentions customer relationship marketing tactics used by Delta Airlines to foster brand loyalty within its consumer base. She cites Delta's efforts in training flight attendants to convey intimacy, concern and appreciation toward passengers to build relationships and overcome customer alienation.
Interesting Fact
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A University of Michigan study mentioned in the May 2009 CBC News article, "U.S. airlines post improvement in customer satisfaction survey" states that passenger satisfaction at the beginning of 2009 rose by 3.2%, the first increase in six years. Southwest Airlines scored the highest passenger satisfaction score in the survey, followed by Continental Airlines and Delta Airlines. An American Airlines employee quoted in the article attributes the improvement in customer satisfaction to American's "customer experience teams" stationed at airports and employee incentives for reaching customer service and operational targets.
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References
- Photo Credit yellow jet airliner image by Stephen Kirkby from Fotolia.com
