Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 Breakthrough Customer Service with a Revenue Management Twist Presentation to the AGIFORS Reservations and Yield Management Study Group Tom Svrcek, Ph.D.

Similar presentations


Presentation on theme: "1 Breakthrough Customer Service with a Revenue Management Twist Presentation to the AGIFORS Reservations and Yield Management Study Group Tom Svrcek, Ph.D."— Presentation transcript:

1 1 Breakthrough Customer Service with a Revenue Management Twist Presentation to the AGIFORS Reservations and Yield Management Study Group Tom Svrcek, Ph.D. SVP of Technology and Planning tsvrcek@flyindigo.com A Call to Action

2 2 Outline of Discussion Introduction to Indigo Indigo’s Client Notification System Revenue management applications Call to action

3 3 Indigo – An Introduction Wholly owned subsidiary of NewWorld Air Holdings, Inc. Organized to market, operate and distribute business jet aircraft in regular and frequent commercial service Flights operated as public charter operator under DOT Part 380 under FAR 135 Air Carrier certification Initial target – “ultra high yield” business travelers ($3.00 to $10.00 per RPM) who have already adopted the business jet as their preferred mode of air travel Penetrate market by offering charter capacity in select city pairs – thereby increasing utilization of aircraft, lowering hourly operating costs and making it possible to offer capacity at discounts to charter operators

4 4 (Full ownership Participants purchase jet outright Assume all costs (e.g. fuel, pilots, maint.) (Fractional programs Participants purchase shares (1/2,1/4,1/8) Pay monthly management and hourly fees (Charter flights Participants take no ownership stake in jet Pay per trip fees that cover asset and utilization risks taken by owner/operator Private Air Carrier (PAC) market is one of the fastest growing commercial aviation segments and is composed of three primary sectors Asset riskUtilization risk Overview of Competitive Landscape

5 5 Our Unique Value Proposition Offer the “public” jet service, eliminating the need for high-yield travelers to take an asset position in the aircraft Provide regular and frequent service between select city pairs through public charter aggregation of demand – reducing utilization risk by individual traveler Utilize less crowded general aviation terminals and/or airports located in many cases closer to residential areas and regional business centers Offer comfort, convenience and productivity of the corporate business jet without the typical entry price

6 6 Our Customer Service Challenge Level of service provided by competitors is high (e.g. complete flexibility of departure/return times, highest degree of industrial security) Benefits of general aviation infrastructure (local proximity, reduced congestion) come at risk of operational vulnerability – limited alternatives in the event of service interruptions Need to keep passengers well informed about service irregularities to generate success for service and create lasting customer loyalty

7 7 Our Customer Service Challenge Cost of notifying customers in a timely fashion via their preferred communication channel using traditional methods would be cost prohibitive Associated costs include at a minimum outsourcing/staffing a 24x7 “notification center” for outbound calls to customers

8 8 Solution: Client Notification Service Web-based, personalized notification service enabling the proactive notification of travel related events (flight delays, cancellations, waitlist clearing) Outbound service across multiple communication channels (telephone, mobile phone, pager, fax, email, etc.) Messages delivered simultaneously to all travelers and precisely how each wishes to be notified …True breakthrough in customer service

9 9 Outline of Discussion Introduction to Indigo Indigo’s Client Notification System Revenue management applications Call to action

10 10 Client Notification System Data stored on their servers

11 11 Contact Information

12 12 User Designed Preferences

13 13 Flight operations Delays the departure of the inbound aircraft’s next flight Flight operations Delays the departure of the inbound aircraft’s next flight Inbound flight is delayed due to weather Client Notification System Obtains “manifest” from the delayed flight to determine which passengers are affected and generates a message with “parameterized” information based on event type Client Notification System Obtains “manifest” from the delayed flight to determine which passengers are affected and generates a message with “parameterized” information based on event type Event Trigger: Flight Delay Example

14 14 From:Indigo Industry:Airline Type:Delay Parameter 1:Flight 123 Parameter 2:Chicago Parameter 3:New York Parameter 4:90 minutes Parameter 5:7:30 p.m. Parameter 6:9 passengers Unique identifiers ID #1 ID#4 … ID #2 ID#5 … ID #3 ID#6 … Message Indigo Flight 123 from Chicago to New York has been delayed by 90 minutes. The new estimated departure time is now 7:30 p.m. We apologize in advance for any inconvenience this delay may cause you. If you would like to change your travel plans please call us toll-free at 1-877-446-3446. Message to be created Event Trigger: Flight Delay Example

15 15 The Messaging Engine

16 16 Message created Indigo Flight 123 from Chicago to New York has been delayed by 90 minutes. The new estimated departure time is now 7:30 p.m. We apologize in advance for any inconvenience this delay may cause you. If you would like to change your travel plans please call us toll-free at 1-877- 446-3446. Telephone Mobile phone Pager Email Fax Message is delivered simultaneously to all appropriate users according to each’s preferred notification method The result is breakthrough customer service at a fraction of traditional costs One-to-Many Personalized Notification

17 17 Schedule changes Upgrade notification Flight dept./arrival info. Lost luggage tracking Frequent flier status The departure time for Flight 232 from Chicago to Boston on Friday, February 4th has been updated from 8:00 p.m. to 7:50 p.m. Please make a note of this change. Your upgrade on Flight 2201 from Chicago to Dallas-Fort Worth on Friday, April 21st at 6:00 a.m. has been confirmed. Your seat number is 3B. Your luggage from Flight 345 from Atlanta to Charlotte with ID# 1234567 has been located. To arrange a messenger, please call us toll-free at... The departure gate for flight Flight 1701 from Houston to Phoenix on Friday, February 4th has been changed to H11. The expected departure time remains 11:30 a.m. Congratulations! You have reached the highest status level in our frequent flier program. As a way of saying thank you for your continued loyalty, we will be sending you two first class upgrades good anywhere on our system... EventSample messages Other Scheduled Airline Applications

18 18 Outline of Discussion Introduction to Indigo Indigo’s Client Notification System Revenue management applications Call to action

19 19 Summary Once adopted by a critical mass of travelers, new preferences can be added to further improve the level and type of information flow between airline and traveler A “flight switching incentive” is one feature that could be added to encourage travelers, under certain circumstances, to switch flights voluntarily in exchange for voucher compensation By using profile information and varying incentive levels, airlines can proactively manage such events as aircraft down gauging, oversold flights and ad hoc group requests The result should be lower recommendation costs per passenger and improved customer loyalty

20 20 Description Included in the Travel Related Preferences section of the user’s profile Allows traveler to identify their threshold compensation to switch to a different flight As with other events, allows traveler to specify how he/she wishes to be notified New product can be incorporated seamlessly into a traveler’s existing messaging preference profile Travel Related Preferences Flight switching incentive Notify me if switching incentive is at least Method 1 Method 2 … Mobile1Office1 $100 New Preference Introduction New

21 21 Event Trigger Smaller aircraft re-assigned when bookings already exceed capacity of new aircraft Or, D 3 optimal solution is not feasible due to excess bookings on one flight Message created The aircraft originally assigned to American Airlines Flight 123 departing from Chicago to New York at 7:00 p.m. has been replaced by one with fewer seats. We are currently in the process of trying to re-accommodate passengers on other flights. If you would consider moving to a different flight, we are offering an incentive of $50. Please call us toll-free at 1-800-843-3000 to rebook your itinerary. You are one of 10 passengers who are receiving this message. Aircraft Downgauge Example

22 22 Event Trigger Group request is received for a flight having just less than the required AU level needed to accept the request (e.g. 50 with AU of 45) Message created An opportunity for you to switch airline flights and receive voucher compensation has been created. You are currently booked on United Airlines Flight 123 departing from Chicago to New York at 7:00 p.m. on Friday, April 21st. If you would consider moving to a different flight, we are offering an incentive of $200. Please call us toll-free at 1-800-241-6522 within the next 5 minutes if you are interested in rebooking your itinerary. You are one of 10 passengers who are receiving this message. ””” = 50 but AU(Groups) = 45 Ad Hoc Group Request Example

23 23 Event Trigger Flight is in an “over- oversold” situation Possible causes Overaggressive sales reps, airport agents, etc. trying to accommodate their “best customers” Higher than expected consolidator sales Special event not anticipated by rev. management system Message created - (Conservative) Continental Airlines Flight 123 departing from Chicago to Newark on March 4th at 6:00 p.m. is in an oversold situation. There are seats available on flights departing at departing at 7:30, 8:00 and 10:00 p.m. If you would consider moving to a different flight, we are offering a voucher incentive of $100. Please call us toll-free at 1-800-525-0280 if you wish to be placed on the waitlist. Your name will called at the departure gate for your original flight if we need to re- accommodate you. You are one of 10 passengers who are receiving this message Message created - (Conservative) Continental Airlines Flight 123 departing from Chicago to Newark on March 4th at 6:00 p.m. is in an oversold situation. There are seats available on flights departing at departing at 7:30, 8:00 and 10:00 p.m. If you would consider moving to a different flight, we are offering a voucher incentive of $100. Please call us toll-free at 1-800-525-0280 if you wish to be placed on the waitlist. Your name will called at the departure gate for your original flight if we need to re- accommodate you. You are one of 10 passengers who are receiving this message Ted Botimer Revisited: Overbookings for Sale

24 24 Message created - (Aggressive) Continental Airlines Flight 123 departing from Chicago to New York on March 4th at 6:00 p.m. is in an oversold situation. There are seats available on flights departing at departing at 7:30, 8:00 and 10:00 p.m. If you would consider moving to a different flight, we are offering a voucher incentive of $100. Please call us toll-free at 1-800-525-0280 if you wish to be rebook your itinerary now and collect your voucher. You are one of 10 passengers who are receiving this message Choice between conservative and aggressive management may depend on Degree to which “booked” exceeds capacity or target AU (possibly fare class specific) Cost tradeoff between voluntary DBs at the gate and going out with empty seats Overbookings for Sale

25 25 1. Event trigger Request comes in for a high fare (though still capacity controlled) bucket that has already sold out. 2. Switching opportunity Contact currently booked passengers with designated switching thresholds to see if any are willing to move to another flight, thus opening up the higher fare class AU. 3. Description of decision to be made Is the incremental revenue the airline receives from being able to accept the higher fare passenger greater than the cost of finding someone to switch and paying their threshold compensation. Factors to consider Intangible benefit of increased customer satisfaction of both the high fare passenger and the passenger who elects to switch Incremental revenue of greater “high fare” acceptance, though must be considered on a “net” basis, including the recapture rate of the high fare passenger Costs associated with –System development –Notification –Incremental inbound calls made by interested “switchers” Logical Extreme -Notification Based RM

26 26 Ingoing Hypotheses Creation of a reverse auction among travelers willing to switch for voucher compensation will lower average cost of re-accommodation per passenger as well as carrier’s overall expenditure on denied boarding Proactive notification will reduce the overall volume of complaints related to lack of information, leading to a decrease in overall customer service costs while increasing loyalty For major US carriers, estimated savings related to fewer DBs and fewer complaints could be in the millions of dollars annually

27 27 Outline of Discussion Introduction to Indigo Indigo’s Client Notification System Revenue management applications Call to action

28 28 Summary Long term success of the Client Notification Service is contingent upon attracting a large community of travelers A large user community benefits both message creators (increased chance of finding travelers willing to switch flights) and end users (convenience of maintaining a single profile) The larger the community, the more likely other message creators (credit cards, rental cars et al.) will be inclined to define events and notification Client Notification Service offers new venue to service customers and encourage loyalty

29 29 Profile for AA Profile for Indigo Profile for CO Profile for NW Costs of maintaining multiple profiles Slower consumer adoption due to increased “hassle” of creating and more importantly maintaining multiple profiles Data reliability issues if user does not update all profiles in the event of a change in his/her contact information Highest level of customer service comes from the single profile model Consumer Benefits to a Single Profile

30 30 Airline Hotel Credit Cards Rental car Suspicious activity on your card Two-day rental is overdue You have cleared waitlist for March 4th Benefits to traveler As community grows, more message creators are likely to adopt the service Travelers can then enjoy as much (or as little) information flow as they desire In each case, user gets to define how he/she wants to receive content Service Improves with Scale and Scope

31 31 Leapfrog competition Increased FF adoption Leapfrog competition Accelerated web traffic Additional Benefits of Adoption Non – FF members who want to benefit from notification are more likely to join – particularly if they are “seamlessly linked” Once profile is built, users return to site to –Modify contact information and preferences –Learn about new event-driven services Increased traffic increases the likelihood of online bookings click-throughs to service partners etc.


Download ppt "1 Breakthrough Customer Service with a Revenue Management Twist Presentation to the AGIFORS Reservations and Yield Management Study Group Tom Svrcek, Ph.D."

Similar presentations


Ads by Google