Page 1: What is CRM?

• CRM is defined as “A comprehensive strategy and process of

acquiring ,retaining and patnering with selective customers to create
superior value for the company as well as the customers”

• CRM is more than just a set of technologies: it is a process.

• Providing customers with a good experience however and whenever

they choose to contact you.

• A management approach that enables organisations to identify, attract

and increase retention of profitable customers, by managing
relationships with them.

Page 2: Why CRM?

• Competition is fierce;

• The economics of customer retention are unequivocal;

• Technology allows airlines to do this more effectively and profitably

today.

• CRM applies regardless of the channel to the customer.

• To help manage customer relationships.

• Provides long-term returns for customer focused businesses

Page 3: Understanding Customer Relationship Management (CRM)?

• CRM is a business philosophy supported by open lines

of communication and feedback for mutual benefits of both buying and selling
organisations.

• Its a “learning relationship”, with the customers.

• The seller works to maximize the value of the relationship for the customer’s
benefit.
• CRM provides selling organisations with the platform to obtain a competitive
advantage.
Pge4; Determinants of CRM

o Understand customer needs and problems;

o Meet their commitments;

o Provide superior after sales support;

o Make sure that the customer is always told the truth (must be honest); and

o Have a passionate interest in establishing and retaining a long-term

relationship (e.g., have long-term perspective).

Page5; Managing Customer Relationships

A. Initiating the relationship

Gather and study pre-call information;

Identify buying influences;

Plan the initial sales call;

Demonstrate an understanding of the customer’s needs;

Identify opportunities to build a relationship; and

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B. Developing the relationship

Select an appropriate offering;

Link the solutions with the customer’s needs;

Discuss customer concerns;

Summarize the solution to confirm benefits; and

Secure commitment.

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C. Enhancing the relationship
 Assess customer satisfaction;

Take action to ensure satisfaction;

Maintain open, two-way communication; and

Work to add value and enhance mutual opportunities.

Page8: Summary

CRM is a new business philosophy based on trust and value;

The core function of CRM is the value creation process;

Customer relationships develop over time;

The role of global salespeople in the process is that of both

relationship builders and relationship promoters; and

The basic premise of CRM is to offer superior value to

customers in an effort to turn prospects into
customers, customers into loyal customers, and
loyal customers into partners.

PAGE 9: Airline Industry

• Few inventions have changed how people live and experience the world as much
as the invention of the 10airplane.
• The Airline Industry encompasses a single aircraft conveying cargo articles and
mail to different places to the numerous aircrafts carrying passengers to the
different parts of the world.
• During both World Wars, government subsidies and demands for new airplanes
vastly improved techniques for their design and construction.
• Airlines remain a large and growing industry.
Pg 10
 • It facilitates economic growth, world trade, international investment and
tourism.
• Worldwide, IATA, International Air Transport Association, forecasts
international air travel to grow by an average 6.6% a year to the end of
the decade and over 5% a year from 2000 to 2010.
• Airlines are having to invest heavily in the quality of service that they
offer, both on the ground and in the air.
• The airline industry has proceeded along the path towards globalization
and consolidation.

Page11: The airline industry can be separated into four categories :

• International - 130+ seat planes that have the ability to take passengers just
about anywhere in the world. Companies in this category typically have annual
revenue of $1 billion or more.
• National - Usually these airlines seat 100-1 50 people and have revenues between
$100 million and $1 billion.
• Regional - Companies with revenues less than $100 million that focus on short-
haul flights.
• Cargo - These are airlines generally transport goods.

(PLZ FIND egs. OF EACH OF THE CATEGORY)

Page11:

TOP TEN AIRLINE GROUPS BY REVENUE (2009)

Rank Airline 2009 Revenues Change in $

1 Lufthansa Group $31.0bn -15.0%

2 Air France-KLM $29.7bn -14.7

3 Emirates $28.1bn 23.6

4 Fedex $21.6bn -3.6%

5 AMR Corp $19.9bn -16.2%

6 Japan Airlines* $16.4bn -19.5%

7 United Airlines $16.4bn -19.1%

8 ANA Group $13.2bn -4.3%

9 British Airways $12.8bn -14.8%

10 Continental Airlines $12.6bn -17.4%

Notes: Based on latest full year figures except Japan Airline where financial
year figures unavailable. Figures used are based on combination of last
four available quarters running to Dec 2009. For how to get the full Top
150 and analysis, go to flightglobal.com/datasets

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WORLD AIRLINE NET PROFITS 1989-2006

Page12: Crm’s contribution in the airline industry.

 • Within turbulent, highly competitive marketplace, airlines are finding it
increasingly important to respond and are responding both quickly and
effectively to changing patterns of customer demand.
• The opportunities are in managing customer relationships, controlling
costs and applying customer profitability to the entire business.
• The shareholders would see an investment in their only real source of e,
the customer, and the meaningful profits that result.
• Relationship marketing revenu is emerging as the core marketing activity
.
for businesses operating in fiercely competitive environments
• Airlines have frequent flyer programs to reward loyal customers.
• Airlines adopt CRM strategies for managing and nurturing a
company’s interactions with customers, clients and sales prospects.
• The overall goals are to find, attract, and win new clients, nurture and
retain those the company already has.
• Airlines recognize the importance of effective customer management in
establishing long-term competitive advantage.
• For full-service airlines, CRM is an essential component of their
corporate strategy—the means of differentiating themselves from
competitors in the eyes of the customer.
• Airlines are recognizing CRM as a long-term investment.

Page 13: THE TWO MARKET LEADERS OF THE AIRLINE INDUSTRY.

• LUFTHANSA AIRLINES

• EMIRATES AIRLINES
Page 14:LUFTHANSA AIRLINES

1. Company History
o 1926 : Created by Weimar government
o 1931 : Had established most comprehensive air route network in Europe
o 1935 : Expanded to the USSR and China
o Early 1940’s : Led coup against Nazi leadership
o 1954 : Allies allowed the recapitalization of Duetsche Lufthansa
2. Relative Current Situations
o Operates more than 500 aircraft from hubs in Frankfurt, Munich, andZurich
o Services approximately 250 destinations
o Acquired full ownership of SWISS
o Acquiring significant stakes in other airlines
3. Strengths: Lufthansa
o Global Operations
o Largest Star Alliance Member
o IT Division
o Strategic ability to predict future trends
4. Weaknesses: Lufthansa
o Largest Star Alliance Member
o Development of low cost airline structure
5. Opportunities: Lufthansa
o Encourage Growth of Star Alliance
o Increase Ownership Stakes in Different markets
o Use IT Division to Develop Operational Stakeholder Relationships
o Expand presence in growing market
6. Threats: Lufthansa
o Other Alliances
o Low Cost Providers
o Alternative Travel Options for Short Distances
Page 15: LUFTHANSA’s CRM STRATERGY