Designing, developing and sustaining a successful CRM strategy

Angela Schwartz, VP & Head of Product Management & Strategy, Travelport, says a company’s ability to differentiate itself in the market will be determined by its ability to maximize the value of every customer interaction. Customer centricity slices across a number of key functional areas: marketing, sales, IT, distribution, operations and others.
 

Because of the complexity involved with all the functional areas, it is critical for the CEOs to endorse the concept and drive adoption across their leadership team.
 

“The best way to ensure accountability is to tie it to metrics and bonuses. This infers that you need a way to measure results and measure how senior leadership drives evangelism, execution and (most importantly) results through their individual organizations,” Schwartz told Ritesh Gupta of eyefortravel.com.
 

Implementing shared KPIs (key performance indicators) that are consistent and mutually supporting across the enterprise are one step towards breaking down organizational silos, said Schwartz, who is scheduled to speak at the EyeforTravel’s Customer Centric Strategies in Travel conference in Atlanta next Jan 26-27.
 

“I think that developing strategic, value-based customer segmentation and understanding who your core engaged customers are, is another important step in breaking down organisational silos. When the entire enterprise is aligned to a customer strategy, knows who the valuable customers are and how to engage them appropriately, and the enterprise is measured on how they perform against that customer strategy, then they will experience enterprise-wide strategic change,” Schwartz said.
 

Excerpts from the interview with Gupta:
 

Question: Which, according to you, are critical factors when it comes to working on a multi-dimensional CRM strategy to maximize long term customer engagement?
 

Schwartz: “I see the following as critical factors designing, developing and sustaining a successful CRM strategy:
The first is a customer-centric data warehouse – the existence of a 360o view of a customer with the ability to hone in on what information is relevant from all that you cultivate
Second, value-based customer segmentation – developing an understanding of who are your engaged, core customers and developing an enterprise strategy to engage them and cultivate other customers like them. Let’s look at a couple of examples:
Re airlines: Number of miles flown may not be your top customer segment! An airline’s top mileage customer segment could be government employees. However, government workers typically get deeply discounted tickets. So, there could be another segment which actually drives higher profitability.
Re hotels: Can you recognize and react when a high-value, premium member from a competitor is at your hotel? Do you respond differently because this customer could be a highly valuable convert for you if they have a better experience?
Third, two-way customer dialogue – (a) the ability to apply customer treatments consistently across channels that are aligned with the company’s brand promise, customer value, and customer needs; and (b) measure the performance of those customer treatments
In this industry, the easiest way to think about this is around how you proactively treat customers during an irregular operations (IROP) event. I think IROPs are the lowest hanging fruit for improving the customer experience when customer dissatisfaction is at its highest. Further, do you track “cumulative” collateral damage to your highest value customer segments and proactively “make it right” for them? To do that, you have to understand who your highest value segments are (and it may have nothing to do with number of miles flown or nights stayed!), understand what they’ve experienced across any touch-point, proactively operationalize through business rules how you treat them, and then ask them how the experience was – did they like it or not? Lastly, continuously improve your approach by incorporating the intelligence back into the operation execution. This is how you begin to differentiate amongst competitors.”
 

Question: A company like IBM says the inability to identify the customer at the point of sale and service leads to an inability to provide better service to the most-valuable customers. How do you assess the situation when it comes to making most of the customer-centric strategies in the travel industry?
 

Schwartz: “I think IBM is absolutely correct. At some level, there is a standard of service that is aligned to the company’s brand promise. But, there is a lot of competition for the customer’s attention and a company’s ability to differentiate itself in the market will be determined by its ability to maximize the value of every customer interaction. This means you need to know who that customer is and understand their value to your business. The travel industry is getting better at this, but there is still a mass-market approach to interacting with customers.
I think the Pareto rule (80/20 rule) applies here. A lot of investment is made in systems and software and processes that support customer interactions. The value from the CRM investment comes primarily through the customer insight generated. When you are engaged, you are involved, and being involved means that you need to understand something meaningful about the customer. This, I think, is customer insight.
The travel industry has certainly made some positive strides making my travel experience easier, but it can be spotty as to whether it translates into better service. In the last couple of years, I’ve seen some good improvements such as being compensated with extra miles for having to sit in the middle airline seat and free room upgrades. But, these are still mass market approaches for the most part. I would really like the airline to know that I only like lie-flat seats on International flights and bias my searches in that manner. Alternately, I’d like to see hoteliers recognise that I prefer corner rooms which are quiet. They are getting better at letting me tell them this, but I’m looking for insight at a level where they know this intuitively about me through predictive analytics and pattern recognition. The bottom line is that industry suppliers need to know when to take action, what the action should be, and the value the action creates for them. Conversely, they should know the cost of not taking action as well.
I think one thing we can’t ignore in this industry is the lack of integrated systems which is creating many of the challenges. You can have the best customer data warehouse, the best analytics and segmentation strategy and the finest tailored experiences but it all falls down when antiquated or fragmented systems cannot make best use of these things.”
 

Question: How do you think travel companies are today developing their CRM and loyalty program from the ground up based on integrating customer interactions— including social media—and delivering timely and relevant offers and communications that are appreciated by the customer?
 

Schwartz: “Travel companies are making incremental improvements but they are making those improvements discretely in each channel of interaction. I think they are just learning how to tap into social media to drive results. I continue to believe that “timely and relevant” offers primarily come from a travel supplier’s point of view rather than the customer’s point of view. The exciting thing is that travel suppliers have a rich amount of data about their customers. They know when and where they are going, how long they are staying, how much they are spending, etc. Harnessing this data to develop knowledge and insight about a customer’s value and needs means that travel suppliers have a unique opportunity to deliver truly differentiated experiences and make travel not just more convenient, but more enjoyable. For those struggling with the perception that they are competing in a commodity industry, customer centricity provides the secret weapon to break out from the pack and differentiate themselves.”