Achieving Great Customer Experiences for Airlines. Really???

Almost no-one (other than for the kids customer segment) look forward to the flying experience. Much of a traveler’s experience is outside of an airline’s control and unfortunately for airlines, customers take their experience across the entire travel lifecycle into account while rating their airline experience. And most of it is never pleasant. Poor airport experiences, increased government security measures, long security check queues and the surrounding businesses that accompany travel may detrimentally affect a travelers’ experience.

Therefore achieving complete customer experience in the Airlines space is still a near-fantasy. Forrester’s assessment on customer experience quality scores airlines at an average of 66 with the industry being ranked 8^th overall.

Figure: Ranges of Customer Experience Quality within and across 13 Industries Customer Experience Maturity Defined (A Forrester Report)

To aggravate the problem further, airlines today are struggling with margins and the profit airlines make today on a flight seat is only about 2.5 USD.  Airline costs have escalated and with increased competition amongst themselves, customers found it easy to switch loyalty in case a fare was being delivered at a compelling enough discounted price point. In this Wall Street article, it takes about 100 passengers on a flight to just cover its costs.

Does that mean that the situation is hopeless? No and actually, there is much an airline can do. Firstly, they be able to assure a traveler almost never undergoes a negative customer experience while flying with them. And when that rare moment does happen, the airline company needs to acknowledge the service exception and respond pre-emptively, even before the customer becomes aware of the situation. For example, if a flight delay causes baggage to be left behind on a connecting leg, proactive communication and compensation must be delivered immediately.

Secondly, airlines need to deliver relevant personalized messages to their customers across all touch-points. Customers want to be reached out to but only with relevant messaging. A leading European airline company has a 66% click-through rate of email communication sent to its customers. Of this, 99% respond to these offers positively. For an airline to be able to replicate such success, they must have a complete and unified view of the customer first.

Thirdly, airline companies need to re-invent their loyalty programs such that they help airline companies maximize their profits from their best set of customers. Airlines were the first to introduce full-scale loyalty programs with only one objective: acknowledge and reward their best (read as profitable) customers so that they could ensure better profitably.  Somewhere along the way, these programs lost their effectiveness. In the US, it is only of recent that airline companies are moving from a mile based frequent flier based program to a revenue base program or a hybrid program, to ensure they reward their high value customers better. Loyalty programs also need to extend themselves onto the entire travel ecosystem such as hotels, car rentals, spas and even local transportation. About 18 billion USD worth of loyalty points expire due to non-redemption every year, which means that customers aren’t as engaged to the loyalty programs as much. It is imperative therefore that airline companies understand that loyalty programs are not an end in itself but only serve as a foundation to achieve that elusive long lasting customer loyalty.

The figure below summarizes all this best. Achieving customer loyalty, personalization and creating an unified customer 360 view are imperative towards attaining the goal of exceptional customer experience. Today, 76% of organizations are declaring to have or embark on a formalized customer experience program.

Figure: TCS Commissioned Forrester survey results stating drivers for Customer Experience Programs

Security and the Cloud: A Microsoft Study, A Gartner Report and how PRISM can Help Cloud Adoption

A reason commonly cited against cloud adoption has been security and there are enough statistics to suggest that about 50% of customers who were unwilling to move to the cloud had stated data security as a reason.

However, per a Microsoft study, the reality is quite different for those who have already adopted the cloud. The other advantages (such as greater service availability, lower cost and quicker time to market) were rather obvious but even data security has improved upon movement to the cloud (at least true for small and medium enterprises). To put it simply, the cloud has offered better security features that would otherwise have been very expensive to implement on premise and that security systems always stayed up to date is ensured as well.  This was an observation in the Microsoft cloud trust study (http://www.microsoft.com/en-us/news/download/presskits/security/docs/TwCJune13UK.pdf) that stated that 91 percent of SMBs who have moved to the cloud have mentioned that the security of their organization had been positively impacted as a result of cloud adoption.

However, Gartner had something a little different to say altogether in its news release in the last week, where it stated: “through 2015, 80 percent of IT procurement professionals will remain dissatisfied with SaaS contract language and protections that relate to security“. 

See http://www.gartner.com/newsroom/id/2567015 for the full press release. This report mentions that terms on data recovery and data integrity should be as clear as possible and stated upfront in the contracts that are signed, which are really not the case currently. 

On another note, in the backdrop of the PRISM revelations, security on the cloud has become a much more discussed point (the volume of these conversations have got a lot louder). However, unlike what conventional thinking would like us to believe, this actually is leading to a huge opportunity for markets where cloud adoption hasn't taken off yet really, such as Europe for example.  Local on-site clouds in various non-US localities could start taking off and even nationalistic clouds in non-US geographies could become a real possibility. European providers (who don’t come under US jurisdiction) could start to take on the likes of Amazon. Simon Wardley, an UK based researcher for the CSC had actually this to say: “Do I like Prism .. yes and god bless America and the NSA for handing this golden opportunity to us.” His blog goes on to state how this was going to benefit cloud adoption in Europe:  http://blog.gardeviance.org/2013/06/on-prism.html.

Cloud adoption is inevitable eventually but the verdict on security on the cloud is still to be seen. However, we don't have to wait for very long to see how this will turn out and according to me the PRISM episode is not only going to help speed up the addressing of security concerns but also will impact the adoption of the cloud positively. 

Internet Surveillance: How much Power is 'too much' Power?

I read Digital Fortress only recently and it’s almost remarkable that the timing of this coincided with the NSA scandal that is making front-page news globally. The ethical conundrum that was presented in the book is still as relevant in the World as we see it today (it is still the core of various science fiction stories out there) and there will always be supporters of this argument on either side: you know that you need to cross some line to fix some wrongs but when do you know you have crossed a line that you shouldn't have? When do you know you have ‘too much’ power?

I don’t think that this is about the striking of balance between privacy rights and national security as its being made out to be. Hell, consumer privacy died a long while ago (once we created our social media profiles and became active users online) and in this case it’s only the US government that is potentially breaching user privacy. That should be the least of our worries. In fact, I would be more worried about the amount of consumer data that a private corporation like a Google or a Facebook has. In fact Ashley Mayer’s tweet at the end of the Google keynote at its recently held IO conference that has since become famous had this to say:

Of course, in the Middle East, people have been jailed for saying things that the Government didn't want them to say and we know that there is a certain level of internet censorship in countries such as China and India, but for the rest of the western World, the internet is still a free forum as we know it. So according to me, for the most part of, we should be more worried about the power the private organizations have today and that it’s not about the breach of privacy anymore but the ability of these organizations to influence our lives and control our behavior in a way that works best for these organizations.

Coming back to my initial line of thinking: the moot point is not about the current US government’s ability to snooping in on our online activities but the potential power that this ability could give to someone who could misuse it for private gain. For example, if an autocratic power somehow got control of the PRISM program today, they could do the actual harm that we are all afraid of today.  However, at the very same time, if the US government is to be believed, the PRISM web traffic surveillance program has contributed in helping prevent more than 45 potential terrorist attacks (with at least 10 of them in the US). So therefore this program has been a force for good. However, this power in the wrong hands could wreak havoc and therefore the question still remains: you had to cross a line to fix some wrongs but when do you know that you have crossed a line you shouldn't have? When do you know you have ‘too much’ power? The verdict is still out there. All I know is that the Internet must be protected from being controlled, irrespective of whether it’s a government or a large corporation and that is what exactly Internet pioneer Sir Tim Berners-Lee also has to say. 

FOMO and our Addiction to Technology

Fear Of Missing Out (FOMO) as an acronym for a social disorder has been around since 1985. However, this received a lot more attention in the last few years given the advent of the Internet and social networking that has allowed us to be connected and be recognized in ways much easier than before.

To want to feel noticed and subsequently feel important is a natural human tendency. In a way its gives us feedback on our behavior and tells us what we should do to become more recognized. However, not all of us use it to re-enforce even our own definitions of good behavior. More often than not, FOMO is the root cause of our addiction to technology and we don't even know it (look at this Mashable.com article to see if you fall into one of these categories of social sickness addictions). Hell, even the media is addicted to social media.
 

I have a close friend who has over 850 'friends' on Facebook and a similar number of LinkedIn contacts. When asked, my friend remembers to have made any sort of personal interaction with only about 50 of her friends over the span of the last one year. However, she at least checks her Facebook updates about 5 times every day not just to see how many may have posted a like or a comment on a social event she was part of but more to see what every one else has been up to.

Its not just social media that we are addicted to, its also all the devices that have become so ubiquitous in our daily lives today.  Last year, the average US household spent close to $444 on Apple products (which was almost double the amount in the previous year) and if Apple rolls out its own HDTV, then analysts predict that this number could double by 2015. 444 in both relative and absolute terms is a large number and it amounts to almost 1% of the median US household per capita income. And there are many more devices out there than that of Apple, which means that the average US household is spending much than this amount on technology and devices every year. A lot of people I know don't buy an Apple device because they really need it but because everyone else seems to have it.

I don't think its all bad and that the World will be ending anytime soon (read: I am not one of those suffering from depression that the 2012 event didn't happen). In fact, I am strong believer in that the World is getting better everyday. There is little doubt that social media, technology and the Internet have revolutionized business and allowed that exponential growth to happen so much quickly.  See this inspirational talk from Peter Diamandis, Chairman & CEO, X Prize Foundation who tells us all about the good things we can expect.

While the World becomes a better place everyday, I still think that some of us need to step back a little with our social media, Internet and technology obsession. Like Eric Schmidt said about the Internet: "The Internet is the first thing that humanity has built that humanity doesn't understand, the largest experiment in anarchy that we have ever had.” Therefore, we need to give ourselves a pause and let it play it out for a bit. In the meanwhile, we can all connect to the real world and make some more real connections like calling that 51st friend on our Facebook friend list.

Inspiring Use of Technology Towards Social Impact@Crunchies 2012

This year's winners at the Crunchies actually surprised a whole bunch of people: Google+ won in the best social application category, Nest beat iPad 2 and Twitter beat a whole lot of other nominees to win in the biggest social impact category (inspiring revolutions, anybody?!). But this debate on-who-should-have-won is not what I want to write about today. In fact, I specifically wanted to highlight the inspiring models that some of the other nominees in the biggest social impact category are pursuing.

Charity: water, the runner-up in this category, had a simple and powerful premise. There are 1 billion people across the planet today without access to clean water. Simply sign-up on the website and donate via credit card. The credit card's company fees and all other operating expenses are sponsored and therefore the donation directly contributes to a water project 100%. Till date, they have funded over 6000 projects impacting over 2 and a half million people, and have raised over $40 million. Charity: water has used technology to make the entire process of fund-raising. allocation and tracking efficient and transparent. For instance, you can track via GPS, every single project that has been given funding towards a water project; you get a report for where your money has gone and very importantly, Charity: water verifies the amount of funding that is actually required by the implementing local partner via technology. For more information on Charity: water see: http://www.charitywater.org

Khan Academy, another nominee, has an equally simple premise. Its website provides one with free micro-lecture and tutorials that have been hosted on Youtube across a wide variety of subjects. You as a teacher, can even sign-up an entire class and track your student's progress to the minutest of detail. This non-profit has significant backing from the Bill and Melinda Gates Foundation and airs no advertisements on its videos or website. How it uses technology is extremely interesting: it has adaptive learning exercises and generates problems randomly. It has powerful statistical reporting and keeps track of what you have been learning, what you have learnt so far and what you been struggling on so that you can focus on it even more: features that are not available in most traditional classrooms even. For more information on the Khan Academy see: http://www.khanacademy.org

But perhaps, Kickstarter, yet another nominee, sounds the most disruptive of them all. This is an online crowdfunding website for funding projects where donors can directly choose creative projects to fund. The project owners need to ask for a minimum amount of funding and set a date by when the need to raise the funds by. If within this time, the funds aren't raised, then all the money raised in that project is returned to the donors. Also the project owner retains 100% control and ownership of their projects. There is no guarantee that people that post projects will deliver on their projects or even use the money to do their projects and Kickstarter advises sponsors to use their own judgment on supporting projects. However, this model has been working successfully so far and donors get special benefits from the project owners depending on the amount of donation being made. For more information see: http://www.kickstarter.com

For all full list of this year's winners and nominees, see http://techcrunch.com/2012/01/31/crunchies-dropbox/ 

Facebook AND Google. Not Facebook v/s Google!

Google and Facebook are arguably two of the world’s most influential web companies. Per Alexia’s traffic ranking, Google.com comes first followed by Facebook. Both companies also seem to have similar manifestoes and vision. Per Facebook’, it empowers people to share and make the world a more open and connected place. On the other hand, Google’s founders have always maintained that Google’s philosophy was to make the world’s information more accessible and better organized so that users could get exactly what they searched for. Unfortunately, both these web giants don’t seem to be playing well to each other and for whatever it’s worth, millions of consumers like you and I lose out the most. I mean if Facebook and Google were really true to both their philosophies, wouldn’t they have found a way to co-operate with each other to make the search for and the access to information more effective and better?

Google and Facebook weren’t always at war with one another. Most company insiders claim that Google’s launch of OpenSocial and getting other social networks committed to it in 2007 was the trigger point. Facebook also spurned an investment offer from Google also in 2007 about a week before the OpenSocial announcement and went ahead with a Microsoft investment in it for USD 240 million (technically speaking Microsoft may have actually outbid Google). And then of course everything went downhill from there on. 

It’s unfortunate because I see so many areas where Facebook and Google could have co-operated better to the benefit of its consumers. For one, Facebook’s integration into the Android platform is much below par if compared with its integration into the Apple iPhone platform. In fact, if you went back 3 years, Facebook had decided on not dedicating even a single resource for working on an application for the Android platform despite Google offering to loan a programmer to Facebook for this very purpose.  Another area where I would have loved to see
more collaboration is on my ability to see, track and interact with my Gmail contacts on Facebook and vice-versa without requiring the export of contacts from one platform to another. That way I could get to leverage the power of both platforms while using only of them. And that’s true for most of Google’s other platforms such as Youtube, Picassa and more importantly Google documents. Also I would have liked for Google maps integration with Facebook places. Upon posting a location update on Facebook, I would like for it to tell me what places my friends have found interesting in this location before and use Google maps to help me navigate to these places of possible interest. 

There’s a lot that’s also possible between these two players as far as social search is concerned. Google Plus already incorporates search results from my friend’s blogs. If we could also incorporate results from my friend’s Facebook content onto here then I could actually find out more information that may be actually relevant to me. Today about 150 million people visit a Facebook page from a Google search result. But the search on and indexing of Facebook pages is restricted to only a small set of pages. 

In summary, I feel that this isn’t a winner takes all game like its being made out to be. Facebook is great at social and Google is great at search. If we can see some more collaboration between the two, we would be substantially increasing the value of the pie for everyone and the end consumers like you and I would be greatest winners.

Social CRM - Analyst Studies

This is the first in a 2-part series on social CRM. These discourses (if I may dare to call them that) mirror the presentations I have been making at my workplace on this topic. In this part, I will focus on defining it, elaborating its importance, how it fits into an organization’s overall CRM roadmap strategy, its related industry trends and the key issues & challenges faced during social CRM adoption. In part 2, I will attempt to do a product and talk in detail on various use cases that have been successfully implemented by the industry in general in this area.

Social CRM has become such a popular buzzword today and in a way its popularity has lead to an overall misunderstanding and misuse of the concept. Various definitions of the concept exist. Forrester and Gartner have simply expanded the traditional definition of CRM (business processes supporting sales, marketing and customer service) to include the concepts of collaboration and communities to come up with their definitions on the social CRM. The one that is most popular and most commonly referred to today is the one by Paul Greenberg: social CRM is the company’s response to the customer’s ownership of the conversation.

This graphic by the Chess Media Group nicely represents the circle of social CRM evolution (though it has more detail on the listening aspect than on targeting and analysis aspects).

The importance of social CRM is often highlighted using the following: improved customer service, new market segment exploration, improved communication efficiency, improved customer targeting, decreased sales & service cost and increased R&D and innovation. Various statistics have been citied to draw attention to this concept:

1. 30% of Google search results on the world's top 20 brands provide links to Social Media on the 1st page*
2. The internet accounts for only 10% of total sales, but Social Networks influence > 40% of all offline sales*
3. 85% of the students currently enrolled in U.S. colleges and universities have profile pages on Facebook*
4. By 2012, spending on social software to help sales, marketing and customer service processes will exceed $1 billion worldwide**

References: *HBS Social Media Report, Edelman Customer Index Report
                      **Gartner - Social CRM: The Next Generation of Customer Innovation. March 30-April 1, 2011

Strengthening relationships with customers, enhancing brand awareness and establishing interactive relationships with customers were given as the top 3 reasons by CxOs for investing in social media in Gartner survey conducted this year.

If one were to study the use of social CRM within the larger CRM operating framework, then there has been various innovation use cases put to good use. Within marketing, Ford Fiesta has my top vote (see http://media.ford.com/article_display.cfm?article_id=30158) and the MyStarbucks idea finishes as a close second (http://mystarbucksidea.force.com/). Drugstore.com has won several awards for its use of social media towards delivering customer service (http://www.rightnow.com/blog/client-success/taking-home-the-gold). As a social CRM, e-commerce social shopping application Groupon is an easy winner and doesn’t even need explaining. There are many other examples of companies having deployed social media successfully. A bigger list is here, courtesy a Gartner study (Google them to find out more):

Social CRM is not without its list of challenges. Most organizations do not have a social CRM strategy or definition in place and nor have they defined the metrics about current social CRM capabilities that would service as a baseline for improvement. Secondly, there is inherent difficulty in establishing a social CRM strategy in the face of fierce hype from industry magazines and software and service vendors. Expectations for social CRM today clearly exceed the measurable benefits. In Gartner’s technology hype cycle report last year (for sales force automation), social CRM is expected at least 5-10 years away from mainstream adoption and per their study is in a phase of inflated expectations. Thirdly, poor organizational readiness for self-service has emerged as the biggest stumbling block in the increasing drive toward a more cost-effective self-service offering. While there are those who are ready to use social media as a business strategy, they have simply not changed enough themselves to be actually in a position to best use it. Fourthly, most organizations have 3 or more social CRM initiatives running in parallel, often only loosely coordinated. There is no dominant trend as to which department within an enterprise will eventually run a social CRM program. Today that department is definitely for sure not the IT department. There are other technological limitations as well. For one, language complexity and content sources can be an obstacle. Social conversations are often unstructured and include text, images, videos, emails, blogs, tweets and other types of data types that are not part of a database. Separating noise from an authentic social signal, a critical aspect to helping a company better understand their clients is also a challenge today and this can get past the listening tools as well. Seamlessness is yet another issue. Social consumers channel hop during conversations, and companies need to be able to efficiently and effectively follow their conversation and pick up where they left off. Deep integration with the web and with contact center experiences is required to pull this off.

Despite all the challenges and issues around it, social CRM is here to stay. Large investments are unneeded to begin social CRM unlike its enterprise CRM counterpart; social CRM applications are installed and used by organizations of all sizes, including companies with only five employees, though social CRM by itself can’t be a company’s entire CRM strategy. A huge adoption has already taken place these industries: high tech, media, consumer goods and retail. This is particularly true for the NA geography. The next wave is in the telecommunications, education, banking, insurance, pharmaceuticals and automotive industries.

More on the products and use cases in the next fortnight's blog.