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CRM still has a long way to go

By Rutger-Jan van Spaandonk

I am writing this article somewhere over the middle of Africa, on flight 593 from Johannesburg to Amsterdam, operated by the venerable KLM Royal Dutch Airlines.

And, buckle up, dear reader: this promises to be an article in the stable of Meredith Clayton who writes a column on the last page of Upside (one of America’s premier monthly business and finance magazine dedicated to the business of technology), in which she routinely slates the nation’s airlines. I feel compelled to do the same.

Unexpectedly, due to a family emergency, I had to travel back to the Netherlands over the weekend. And, not wanting to compromise on quality and comfort, I chose to travel business class – as usual.

When it was time to take food orders, the purser told me in no uncertain way that she was short on the chicken dish, and that I was advised to take something else. I did not see how this could be my problem – first come first serve, right; and there was still chicken left! – but decided anyhow to comply with her request, and ordered beef. I was, to say the least, a little surprised.

Somewhat later, when I was asking one of the cabin attendants when she expected KLM to provide electricity in the cabin for laptop users (something readers of The Big Change are looking forward to), she somewhat scathingly replied that I should be happy to sit in such a big seat. I did not understand this answer, but left it for a while.

However, I kept mulling over it, and really started to get upset, and decided to ask her what she had meant. While first trying to weasel her way out of it, she finally admitted that I was an upgraded passenger, and did not deserve the same level of service as a fully paid-for customer!!!???

This example shows how far CRM still has to go.

Because I am a member of the highest tier of KLM’s frequent flyer programme, and have the not unsubstantial amount of 250 000 miles in my balance, it was not very difficult to change my full-fare business class ticket into a discount economy class ticket, and upgrade to business class again for 50 000 miles. Since that reduced the price of my journey by 75%, I was really chuffed, and glad that I had been loyal to KLM. Also, I silently thanked them for rewarding me so handsomely for my custom.

But the cabin staff quickly changed my opinion.

In order to get to 250 000 miles, a person living in South Africa has to take more than 22 return trips between Johannesburg and Amsterdam in business class, whereas a Dutch passenger has make to the same trip at least 17 times, but then in the opposite direction, also in business class (Yes, frequent flyer programmes are difficult to understand).

At the average ticket price of the last year, that means roughly R400 000 in fares for the South African, and more than €75,000 (equals R700,000) for the Dutchman! Add to that the fact that I am a gold card member of South African Airways and of American Airways, and a platinum card member of United Airlines, it is clear that I am a so-called ‘valued’ customer. Believe me, I am not trying to boast about my travels (it is sooner a reflection on the pathetic state of my life); I am trying to set the stage.

Now, why did all this not show up on the printout in the cabin? Clearly, information about my past movements on KLM should be known, as I religiously share with them information about other frequent flyer programmes that I am a member of via their surveys.

Instead of not giving me chicken, they should have celebrated my upgrade. Similar to the employee of the month concept, I should have received a hat and a celebration cake with 25 000 candles, and the whole crew singing a song for me – including the captain while the plane flies on autopilot. OK, I am exaggerating, but my point should be clear: cherish your most valued customers; make them feel special and loved. But never, ever, punish them for using your loyalty programme!

I don’t blame the cabin staff for their behaviour: it is after all an industry that sheds jobs faster than I can lose weight, and strict obedience to company policies is the surest way of survival. No, it is lack of a proper CRM system, or proper implementation or use thereof, which puts incorrect or incomplete information in the hands of frontline staff. That, coupled with short-term, knee-jerk policies in response to a global downturn in the industry, means that KLM has to work a little harder to remain my favourite airline.

Let this be a lesson to other companies that have bungled implementation of their CRM systems, or are not using it for what it was meant to accomplish: the attraction and retention of valued customers.

Rutger-Jan van Spaandonk is the founding director of FutureForesight Group, a boutique strategy consultancy. He can be reached via mailto:rj@futureforesight.com.

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The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

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