Customer Care at Air France

Customer Care at Air France

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WELCOME TO CLUB 2000: DELIVERING CUSTOMER CARE THE AIR FRANCE-KLM WAY

PROBLEM:
Dr. Jaeger is not just any Air France traveler – he is a privileged member of the airline’s most elite loyalty program: Club 2000. By virtue of this membership, he is to expect the utmost in superior service quality standards from Air France. But after a horrible experience with the airline that left him “standing in the rain,” literally, he is not only incensed from his travels gone awry, but even more from the inferior service encounters he faces after the fact. After several months of frustrating, useless attempts to secure compensation for his lost luggage, and after having been ignored and given the “run-around” by many Air France service employees, Dr. Jaeger is obviously no longer an Air France customer. Yet the question remains: Who is responsible, and what should be done?

ISSUES / ANALYSIS:
Based on the Inséad case study, the following are some of the problem areas which are contaminating the Air France-KLM customers’ vision of “best service” and which need to be addressed:

1) Leadership: A company’s philosophy is undoubtedly shaped by its leaders. Sincere leaders who lead with integrity truly inspire employees to do the same. Thus, in order for a leader to come across as genuine or “authentic,” that leader needs to lead his/her organization with purpose, meaning and personal values which are not only communicated verbally, but also communicated through the leader’s own actions. The authentic leader needs to “walk the talk.” With this value-driven leadership also comes the ability to build enduring relationships with people – first, with his/her own employees and, secondly, with his/her customers. Unfortunately, Jean-Cyril Spinetta’s (CEO, Air France) behavior in the case study is not an exemplary model of leadership. If Spinetta will not respect and respond to his best customers, then why should his employees?

2) Corporate Culture: It is no secret that with regard to Air France’s marketing efforts, service-related issues have historically been underemphasized, most notably those dealing with service quality. In this area, Air France’s endeavors have noticeably lagged behind those of other comparable traditional airlines. What Air France has been slow to realize is that, due to the deregulation of the airline industry in Europe, their battle for competitive advantage can longer be fought on either price (because price moves are too easily copied) nor on “loyalty” based on company legacy, since these levers will no longer be enough to keep customers coming back.

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What should be obvious is that, in this new environment where all airline companies now have comparable fares and matching frequent flyer programs, the airline with the better (or the best) perceived service will draw passengers from other carriers.

3) National Culture: Unlike the United States, France is not particularly well-known for its focus on customer service. Certainly some of this has to do with its national history and the fact that, even today, the class system in France is far from dead. One could make a strong argument that customer service in France may be viewed as a lessening of oneself to become subservient in a given context. This seems to be an indication of a cultural-specific issue, since service in the United States, for example, tends to be regarded more often as a service of “equals”: a salesperson or customer representative tends to act as a partner in a transaction, neither currying favor (although friendliness is always appreciated), nor pushing the customer (hopefully) into decisions s/he does not want to make.

4) Consistency of Competence: “Perhaps more than anything, a successful program depends on competent and consistent execution.” The problem that is apparent from Dr. Jaeger’s dilemma is that there is no consistency of competent behavior from one airline to the other, and neither is taking accountability for the issue. True, KLM does respond to Dr. Jaeger’s plea rather rapidly, but they still do not take any responsibility to the point of action, and instead send him right back to Air France, whose response (or lack thereof) is simply unacceptable from a customer service point of view. The bottom line is that, for the customer, Air France-KLM appears as one company, but even with a (supposed) synergistic alliance, they are still functioning and behaving as two distinct entities, a confusing situation indeed. With respect to the competent and consistent execution of Club 2000, all it takes is one negative experience for an elite customer to be turned off “for good” and to never consider that airline’s service again.

RECOMMENDATIONS:
Based on Dr. Jaeger’s very negative service encounters with Air France, the following recommendations are suggested in order to address the poor service quality issues of the airline:

1) DELIVER ON YOUR PROMISE: When a loyalty program promises to reward customers with special treatment, it must ensure that the services provided through these special arrangements are actually delivered. If we examine Exhibits 1 & 2, it is easy to see that there is a distinct gap between service delivery of Club 2000 and the external communications about the service delivery to customers. This error must be corrected, and can only be done so from the “top-down” – the senior leaders of Air France and KLM must first instill in their employees the values they practice themselves everyday (which employees witness everyday). Secondly, they must convey those values via external communications to their customers. Finally, they must effectively deliver on those promises made to their customers, in order to build confidence and trust, tow key drivers of customer satisfaction and loyalty.

2) IMPROVE SERVICE RECOVERY: The phenomenon of “service recovery” is actually an interesting paradox: First customers are dissatisfied; then they experience a high level of excellent service recovery; then they may ultimately be even more satisfied and more likely to repurchase the product and/or service again. Therefore, some ways Air France can try to cultivate better service recovery standards are by acting quickly to customer complaints; providing adequate explanations for mishaps; treating its customers fairly; cultivating relationships with its customers; learning from failed service experiences and lost customers; learning from recovery experiences; trying to “fail-safe” the service; and finally, encouraging customer feedback and tracking complaints.

3) SERVICE EMPLOYEES ARE THE BRAND. An airline customer who lives in a small town with a tiny airport, for example, has a reduced set of options in airline travel. This customer will be more tolerant of the service performance of the carriers in the town because few alternatives exist. S/he will accept the scheduling and lower levels of service more than the customer in a big city who has myriad flights and airlines to choose from. The customer’s perception that other service alternatives exist accordingly raises the customer’s level of “acceptable” service expectation, and also narrows the sphere of the customer’s tolerance level. Every time a customer comes into contact with an enervating Air France employee, that encounter tarnishes the company and brand image in the customer’s mind. Therefore, in order to revolutionize the way its employees interact with customers, Air France should motivate employees through defined performance rewards based on customer feedback and metrics. In an economy that has been carved out of a socialized (as opposed to capitalized) system, the only way to motivate employees in the case of Air France is through well-designed pay-for-performance systems.

4) ALLY YOUR COMPANY PRACTICES, NOT JUST YOUR COMPANY: Dr. Jaeger’s perceptions of disparity in the service provision between the two allied airlines, Air France and KLM, are also evident from the case. Much research has focused on the service quality of individual airlines. Similarly, there is also considerable literature that examines appropriate measures to be taken in case of a service failure by a particular airline. Regardless, it is evident that the issue of service failure and recovery can occur with a partner of the airline with which a traveler has a close relationship. Consequently, this has important implications for individual airlines, especially those which have established in the past a reputation for high standards of quality and service, such as KLM. If a service failure on an airline is not resolved to the satisfaction of a customer, it may adversely affect not only the airline responsible for the service failure but also, inadvertently, the partner airline as well, by means of association through the alliance. Such potential drawbacks of an alliance membership could seriously damage the alliance between Air France and KLM and needs to absolutely be remedied. And at the end of the day, both companies are indeed responsible for Dr. Jaeger’s extreme customer dissatisfaction.
This poses severe problems for Air France-KLM, an airline provider which may not even understand what service quality features are important to its customers. As we have learned, good service has little to do with what the airline provider believes; rather, it depends solely on the beliefs of the individual customer. Customer satisfaction can occur only when the customer’s perceived experience either matches or exceeds the customer’s expectations. However, customer loyalty (leading to repeat business) occurs only when the perceived experience can be considered excellent, as in a level far exceeding merely good service. Thus, what are some of the typical underlying factors that could form perceptions of service quality for Air France-KLM?

• Reliability: Flights to promised destinations depart and arrive on schedule

• Responsiveness: Prompt and speedy system for customer complaints, in-flight baggage handling and baggage insurance/guarantees on lost luggage

• Assurance: Trusted airline name; good safety record; employees who are not only competent, but go “above and beyond” the call of service and duty

• Empathy: Employees who understand the special individual customer needs and anticipate their customer needs

• Tangibles: Modern, new aircraft; attractive ticketing counters; convenient baggage area; neat, professional staff uniforms

The success in turning Air France around from a bureaucratic institution – that at one time regarded itself as superior in doing the public a favor by allowing them to fly on its planes – to a customer responsive and world-class service provider should be dependent on the actions of both corporate CEO’s, both Spinetta and van Wijk, in designing excellent service quality standards for Air France-KLM, as one entity (even if they choose to maintain their distinct identities). Their leadership by example should literally set the example for the entire corporate culture and, hence, propel these two airlines to a new level of success.

CONCLUSION:
It is difficult enough for any airline customer to evaluate and discern the subtle differences in service quality and make objective appraisals, but ignoring the customer’s (especially elite customer’s) appeal is beyond the zone of bad service quality – it is simply intolerable. Toward this end, Air France must keep close watch on its best (if not all) customers, assessing the importance and performance of each customer contact. It is essential that service quality measures be customer-driven, as there could be a disparity between senior managerial thought and practice versus customers’ actual expectations. By carefully listening to and responding to customers, Air France can identify critical areas of service that need immediate managerial action, as well as those that can be promoted on differentiating features.
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